Evers pens letter to Hogan regarding possible changes to Foxconn contract

Gov. Tony Evers wrote departing WEDC Chair and CEO Mark Hogan he hopes they’ll “work in unison” to meet the needs of taxpayers and Foxconn as possible changes to the company’s incentive package are considered.

Evers sent the letter to Hogan Monday after visiting the site of the plant in Racine County last month, his first time at the project. It reflects some of his past comments that the deal may need to be changed after the Taiwanese company scaled back initial plans to build large flat screens.

Those past comments prompted blowback from GOP lawmakers who suggested the guv was trying to undermine the deal.

In the letter, Evers wrote his administration is “committed to supporting Foxconn’s success in Wisconsin to bring manufacturing jobs to an area of the state that has struggled for many years.” He also again said the company approached the state earlier this year about revisiting the agreement.

A Foxconn spokesman said the company was aware of the letter but didn’t have an immediate comment.

“Because the project has evolved substantially from what was originally proposed, evaluated, and contracted for, it is necessary to review the revised aspects of the project and evaluate how changes can most fairly benefit both the company and our state,” Evers wrote. “Proposed modifications to the Foxconn agreement or terms for a new agreement should be thoroughly and thoughtfully reviewed and assessed by the WEDC and my Administration.”

As the company’s initial plans for the site have changed, it has repeatedly said it remained committed to its original promise of 13,000 jobs and an investment of up to $10 billion. Both were targets in the deal signed with the Walker administration.

WEDC spokesman David Callender said the agency forwarded Evers’ letter to the full board. He said WEDC, the guv’s office and DOA have “routine discussions” with Foxconn. He also noted it is not uncommon for WEDC to amend contracts with companies during the lifetime of the deal. But he said the agency otherwise doesn’t comment on talks with a company before something would be presented to the board.

Evers offered no specifics in his letter on possible changes but noted the company’s plans “reflect a substantially smaller footprint, less capital investment, and fewer manufacturing workers than its original plans.” Foxconn originally proposed what’s known as a Generation 10.5 facility capable of manufacturing screens the size of a garage door. It now plans a Generation 6 facility, which products LCD screens for TVs, cell phones and other devices.

Evers wrote those who backed the “unprecedented incentive package” justified it with the company’s pledge to create the larger facility and bring manufacturing jobs to Racine County. But he wrote those plans have now changed.

Last year, Foxconn fell short of the minimum number of employees required to qualify for tax credits related to job creation under the state’s nearly $3 billion incentive package. The company has said it plans to begin production in the fourth quarter of 2020, and local officials have said Foxconn indicated it plans to have 1,500 employees for the initial phase of manufacturing.

Under its contract with the state, the company would need a minimum of 1,820 employees at the end of 2020 to qualify for tax credits tied to job creation. To qualify for the maximum tax credits under the contract, it would need 5,200 employees at the end of that year.

In the letter, Evers also praised Hogan, who announced he will leave the agency sometime this fall.

“As you prepare for your departure from the WEDC this fall, you can be proud of the agency’s work and the committed team you built,” Evers wrote. “I look forward to our work together in your remaining weeks at the WEDC and appreciate the professionalism and dedication with which you have approached this role.”

During the December extraordinary session, Republicans stripped the guv of the power to appoint the WEDC secretary and CEO until Sept. 1.

Hogan hasn’t specified a date for his departure but has said he had planned to leave this fall even if Gov. Scott Walker had won re-election.

Read the letter here.

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