Sep 19, 201712:28 PMInside Wisconsin
with Tom Still
After the vote: Behind the scenes work on Foxconn just beginning
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[Yesterday, Gov. Scott Walker signed] legislation endorsing the framework of an incentive package for the Foxconn Technology Group, which is poised to make a $10-billion investment in the state.
Now, the real works begins.
That’s not intended to diminish the long hours of debate and study devoted to the Foxconn bill by lawmakers since it was first revealed in early summer. Rather, it’s to acknowledge if ever there was a case of the devil lurking in the details of a deal, this is it.
Passed this month by the Assembly, 64–31, and the Senate, 20–13, the process now returns to state negotiators to finish writing the terms of the incentive package. That will take the form of a contract that will outline the more precise terms of how, when, and if Foxconn will be compensated for investing up to $10 billion in capital over time and hiring up to 13,000 direct employees.
It will look much like a bank underwriting process, in which provisions are outlined to provide incentives for Foxconn to perform as announced while limiting the state of Wisconsin’s risk through repayment “clawbacks” or payment thresholds for meeting job creation targets.
An amendment passed by the Senate and embraced by the Assembly would require the Wisconsin Economic Development Corp. to “establish job creation thresholds” for Foxconn that must be met before incentives could be paid, even in partial form.
While that amendment didn’t set specific job ranges — state negotiators will work on that in coming weeks — it helps to address concerns that Foxconn would fall short of its predicted 13,000 jobs and still get the bulk of an estimated $3 billion in state incentives.
It leaves the state in a better position to negotiate with Foxconn over retroactive tax incentives for job creation. Foxconn is the world’s largest contract manufacturer of electronics and the fourth-largest information technology company by overall revenues, a status the company didn’t obtain by having a team of weak negotiators.
In addition to the state contract talks, work is underway to solve what some people predict is the biggest problem of all — finding enough skilled workers for Foxconn in an already tough labor market.