Is Foxconn Getting Too Sweet A Deal In Wisconsin?

Taiwanese electronics giant Foxconn says it will build its first major U.S. manufacturing plant in Wisconsin. Wisconsin offered Foxconn up to $3 billion to locate there.

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The Taiwanese electronics giant Foxconn is coming to the U.S. The company announced yesterday that it plans to build a factory in Wisconsin. The state will offer Foxconn as much as $3 billion in tax breaks and subsidies. Foxconn has long had an enormous presence in China, where its factories produce all things electronic from iPhones and iPads to PlayStations and computers. As Wisconsin Public Radio's Shawn Johnson reports, some people wonder whether Foxconn will thrive in a state where manufacturing is more about motors and machines.

SHAWN JOHNSON, BYLINE: Modesty was in short supply at the White House news conference where the Foxconn deal was announced yesterday. President Trump said the plant in southeast Wisconsin would be state-of-the-art and create thousands of jobs.

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PRESIDENT DONALD TRUMP: And I mean American jobs. That's what we want.

JOHNSON: Wisconsin Governor Scott Walker said the plant itself would be enormous.

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SCOTT WALKER: Now, think about that. That would be three times the size of the U.S. Pentagon. Or for those of us who are Packer fans, that's big enough to put 11 Lambeau Fields inside of that space.

JOHNSON: While Wisconsin's manufacturing workforce runs deep, it mostly builds parts, motors and machines like Harley-Davidson motorcycles, not electronics. It lost thousands of manufacturing jobs last year even as the state's unemployment rate neared record lows. The governor and White House officials say the world's largest electronics maker will invest $10 billion in the proposed plant. Low estimates are for 3,000 jobs, a number that administration officials say could grow to 13,000.

But Foxconn has in the past made job promises that don't materialize. It pledged hundreds of jobs and a high-tech factory in Pennsylvania in 2013, but the factory was never built. Einar Tangen, a Beijing-based Chinese economics expert, is skeptical of the promised jobs. He says Foxconn is pushing hard to automate more factories.

EINAR TANGEN: I would find it hard to believe that he would have those kind of numbers there. I can see a highly automated factory being staffed at as low levels as possible.

JOHNSON: Tangen is among those struggling to understand how states like Wisconsin can afford to offer such massive incentives. The state tax breaks alone would work out to about $230,000 dollars for every job created. But Tangen says a $3 billion tax break is not unusual for a company the size of Foxconn.

TANGEN: I'm not surprised at the number. Actually, I think it's a little lower than I was expecting.

JOHNSON: At Madison Area Technical College, about an hour and a half's drive from where the Foxconn plant would be built, students are mixed on whether it would be a good investment for the state. Aurey Leslie (ph) is a business student here and is OK with how much the state is spending for Foxconn as long as it creates the promised jobs. Could he see himself building TV screens?

AUREY LESLIE: To be, you know, realistic about it, job is a job. You know, if you have a family, man, you really don't have - you know, you can't be choicy. You know, if it helps pays the bills, you have to take it.

JOHNSON: Analysts who closely follow Foxconn see it wasn't just tax breaks that brought this plant to this state. They say it's not coincidental that the sites being considered are in House Speaker Paul Ryan's congressional district and in a swing state that helped Donald Trump win the presidency. For NPR News, I'm Shawn Johnson in Madison.

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