Wisconsin Hopes Foxconn Will Make It A Digital Hub, But Skepticism Abounds

Jun 28, 2018
Originally published on June 28, 2018 6:53 am

President Trump travels to Wisconsin on Thursday, for the groundbreaking of an enormous Foxconn electronics plant that state officials hope will help turn the region into the next Silicon Valley.

But the $10 billion plant faces continuing skepticism over the nearly $4 billion package of incentives that state and local officials paid out to lure the Taiwan-based company to the area a half hour south of Milwaukee.

Foxconn has promised to hire 13,000 employees at the plant, which will make liquid-crystal-display screens for televisions and computers, and state officials say that should lead to hiring by other companies.

"This is a significant impact that will ripple across the state," says Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce.

"This really starts to identify Wisconsin and the metro Milwaukee area as home to a new digital technology that's not being manufactured in the United States, so we see significant follow-on investment and the ability to develop a new digital economy," Sheehy says.

Trump has held up the new plant as emblematic of the kind of manufacturing revival he envisions for the country as a whole. He has also taken credit for the deal.

"Frankly, they weren't going to come to this country. I hate to say it, if I didn't get elected, they wouldn't be in this country. They would not have done this in this country. I think you know that very well," he said at the White House in February.

But critics say Foxconn has sometimes made similar jobs promises in places such as Brazil, without following through, and they question the estimated $3.7 billion in incentives paid.

A 2017 report from the non-partisan Wisconsin Legislative Fiscal Bureau said the state's investment may not begin to pay off until 2043.

"It's the largest taxpayer subsidy of a foreign corporation in U.S. history by a state, and I think a lot of people in Wisconsin are skeptical about this kind of economic development in general," says Gordon Hintz, Democratic leader of the state assembly.

A Marquette University Law School survey found considerable skepticism, even among Republicans, about whether the plant was worth what it would cost the state.

"A large majority, two to one, think whatever Foxconn may be doing positively for the Milwaukee area is not something that's going to carry over into their area," says Charles Franklin, the survey's director.

Gov. Scott Walker, who is running for a third term, hopes the plant will answer critics who say Wisconsin's growth has lagged behind the country as a whole.

"Absolutely it's worth it," he told Fox Business Network last year. "This is transformational. These LCD displays will be made in America for the very first time, right here in the state of Wisconsin."

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DAVID GREENE, HOST:

President Trump is going to be in Wisconsin today to attend the groundbreaking for a giant new Foxconn factory. This is the Taiwan-based firm that is Apple's biggest supplier. They make screens for iPhones. Foxconn has said it will bring some 13,000 jobs to Wisconsin. Here's NPR's Jim Zarroli.

JIM ZARROLI, BYLINE: Lots of cities and towns want to become the next Silicon Valley. Wisconsin hopes the $10 billion Foxconn plant will be its chance. Tim Sheehy heads the Metro Milwaukee Chamber of Commerce.

TIMOTHY SHEEHY: This will be an investment by the fourth largest technology company - making the largest foreign direct investment in U.S. history.

ZARROLI: To President Trump, the plant is a visible sign of the manufacturing revival he envisions. Here he was last August.

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PRESIDENT DONALD TRUMP: You saw last week - Foxconn. They make the Apple iPhones. They make all of the - desktop. They make - they're the biggest in the world. They're coming into Wisconsin with an unbelievable plant.

ZARROLI: But it wasn't just rising business confidence that lured Foxconn to Wisconsin. State and local officials offered nearly $4 billion in incentives to the company. Gordon Hintz is the Democratic leader of the state Assembly.

GORDON HINTZ: It's the largest taxpayer subsidy of a foreign corporation in U.S. history by a state, and I think a lot of people in Wisconsin are skeptical about this kind of economic development in general.

ZARROLI: Hintz says it will take many years before the state's investment pays off, and serious questions exist about how many jobs will be created. Foxconn has made similar jobs promises in places such as Brazil that didn't pan out. A recent Marquette Law School poll indicated that most voters, even among Republicans, are skeptical about the plan. That's a perception that Governor Scott Walker is hoping to change. Walker is running for re-election and battling criticism that the state's growth has lagged. Last year, he went on Fox Business News to sell the Foxconn plant.

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SCOTT WALKER: Absolutely it's worth it. This is transformational. These LCD displays will be made in America for the very first time right here in the state of Wisconsin.

ZARROLI: Today Walker will stand alongside President Trump at the groundbreaking. The meeting could be awkward. The state is home to the beloved company Harley-Davidson, and Walker even rode a Harley during his brief campaign for president in 2016.

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UNIDENTIFIED REPORTER: Wisconsin Governor Scott Walker is touring New Hampshire today by motorcycle - on his Harley-Davidson right there.

ZARROLI: This week Trump threatened Harley-Davidson. He did so after the company announced it was shifting some production overseas because of Trump's escalating trade battles with Europe. Again, Assembly leader Hintz.

HINTZ: My hope is that Governor Walker will talk to, you know, President Trump and tell him that his, you know, overall economic policy is having a destructive effect on Wisconsin industries.

ZARROLI: But on a day when both Walker and Trump are eager to celebrate an economic victory, whatever differences exist between them are unlikely to be made public. Jim Zarroli, NPR News.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.