Web Extra: Foxconn dealmakers confident about company


MIKE: BREAKEVEN POINT OF 2043. WHEN PEOPLE HEARD THAT, THERE WERE QUESTIONS RAISED. SPEAK TO THE PEOPLE OF WISCONSIN. HOW IS THAT A GOOD DEAL WHEN WE DON’T BREAK EVEN ON THIS UNTIL 2043? SEC. NEITZEL: YOU HAVE TO STEP BACK AND LOOK AT THE BIGGER PICTURE HERE. WERE TALKING ABOUT 13,000 HIGH-PAYING, FAMILY SUPPORTING JOBS IN WISCONSIN. THAT IS AN AVERAGE SALARY OF JUST SHY OF $54,000. THAT IS JUST THE DIRECT JOBS WERE TALKING ABOUT. THEN, WE WILL HAVE THE INDIRECT AND INDUCED JOBS ACROSS THE WHOLE STATE. YOU WILL HAVE A SUPPLY CHAIN. THIS IS CREATING A WHOLE NEW HIGH-TECH MANUFACTURING ECOSYSTEM IN THE STATE OF WISCONSIN THAT NOT ONLY HASN’T EXISTED IN THE STATE OF WISCONSIN, IT HASN’T EXISTED IN THE UNITED STATES. THERE WILL BE BENEFITS BEYOND WHAT WAS JUST IN THAT REPORT THAT ARE HARD TO QUANTIFY USING HISTORIC MODELS. WHEN YOU WERE LOOKING AT SOMETHING OF THIS MAGNITUDE THAT IS SO TRANSFORMATIVE, CREATING AN ECOSYSTEM FOR HIGH-TECH MANUFACTURING RIGHT HERE IN WISCONSIN. MIKE: SECRETARY HOGAN, HE SAID 13,000 JOBS. PRESIDENT TRUMP SAID 3000 JOBS. WITH THE POTENTIAL. THERE ARE PEOPLE IN THE STATE LEGISLATURE WHO ARE A BIT CONCERNED ABOUT JUST EXACTLY HOW MANY JOBS WILL BE CREATED AND BY WHEN. IS THERE LANGUAGE IN THE LEGISLATION OR THE DEAL THAT SAYS X NUMBER OF JOBS WILL BE CREATED BY THIS DATE? THEREFORE, YOU GET STATE TAXPAYER DOLLARS. SEC. HOGAN: THERE’S NOTHING IN THE LEGISLATURE. WE ARE CURRENTLY NEGOTIATING THE CONTRACT WITH THE COMPANY. OUR UNDERSTANDING WITH THE COMPANY IS $10 BILLION INVESTMENT IN THE STATE OF WISCONSIN, 13,000 JOBS AND WE WILL PROVIDE $2.85 MILLION IN TAX CREDITS TO THE COMPANY. MIKE: WILL THERE BE AT SOME POINT ANY LANGUAGE THAT WILL SPELL OUT JOB CREATION GOALS SEC. HOGAN: YES. IN ANY CONTRACTS WE SIGN WITH AN ENTERPRISE, THERE ARE GUIDEPOSTS. HOW ARE THEY GOING TO EMPLOY PEOPLE OVER A PERIOD OF TIME? SEC. NEITZEL: THE COMPANY HAS TO INVEST DOLLARS OR HIGHER EMPLOYEES BEFORE THEY GET A DIME OF STATE INCENTIVE MONEY. IT IS A PAY AS THEY GROW , PERFORMANCE-BASED INCENTIVE. MIKE: ARE YOU CONCERNED AT ALL ABOUT WHO MIGHT BE WORKING THER PEOPLE IN THE LEGISLATURE HAVE SAID WE WOULD LIKE TO SEE LANGUAGE THAT WOULD GIVE PREFERENCE TO WISCONSIN VENDORS. SEC. NEITZEL: WE HAVE SEEN THEY ARE VERY COMMITTED TO BEING IN WISCONSIN. THEY ARE VERY COMMITTED TO BEING PART OF THE WISCONSIN BUSINESS COMMUNITY. THEY WANT TO MAKE THIS ECOSYSTEM GOOD FOR THE WHOLE STATE. WE’VE ALREADY SEEN THAT WHERE THEY’VE ENTERED INTO A MEMORANDUM OF UNDERSTANDING WITH ROCKWELL RIGHT HERE IN MILWAUKEE AND GINSENG GROWERS IN THE NORTH-CENTRAL PART OF THE STATE. THEY ARE LOOKING TO BE AN INTEGRAL PART OF WISCONSIN’S BUSINESS COMMUNITY. MIKE: ARE THERE GUARANTEES OR DO YOU EXPECT THERE WILL BEGIN TO THE GUARANTEES — THERE WILL BE GUARANTEES TO USE A PERCENTAGE OF WISCONSIN WORKERS WHO WOULD BE EMPLOYED? SEC. NEITZEL: THERE ARE GOING TO BE — IF YOU LOOK AT OTHER LARGE EMPLOYERS IN THE AREA, USUALLY 95% OF THOSE EMPLOYEES LIVE IN WISCONSIN. AGAIN, WE ARE VERY COMMITTED, THE COMPANY IS VERY COMMITTED TO MAKING SURE THAT THERE’S WORK FOR ALL WISCONSIN COMPANIES, LOOKING AT THE SUPPLY CHAIN AND CONSTRUCTION AND EMPLOYMENT AFTER THE PLANT IS UP AND RUNNING. SEC. HOGAN: THE REASON FOXCONN IS COMING TO THE STATE OF WISCONSIN ARE ALL THE THINGS THE PRO-BUSINESS LEGISLATION HAS PASSED OVER THE PAST 6-70 YEARS. — 6-7 YEARS. WE WOULDN’T BE ON THAT LIST OF SITE SELECTORS LOOKING IN WISCONSIN AS A POSSIBLE LOCATION. TO ANSWER YOUR QUESTION ABOUT LANGUAGE IN THE LEGISLATION OR THE CONTRACT, THAT WOULD RUN COUNTER TO THE PRO-BUSINESS POLICIES THAT HAVE BEEN INCORPORATED IN THE STATE. MIKE: DO YOU THINK YOU WOULD BE PROTECTING TAXPAYERS BY INSISTING ON THAT LANGUAGE? SEC. HOGAN: PEOPLE THAT WORK IN THE STATE OF WISCONSIN PAY TAXES TO THE STATE OF WISCONSIN. SOME THINK ILLINOIS RESIDENTS DON’T PAY TAXES IN WISCONSIN. THAT’S NOT TRUE. WE WANT THEM TO LIVE IN WISCONSIN, BUT WHEN YOU ARE TALKING ABOUT 10,000 CONSTRUCTION JOBS, WE HAVE T RECRUIT FROM OUTSIDE OF WISCONSIN. OUR INTENT IS TO HAVE THOSE PEOPLE WORK AND LIVE IN WISCONSIN. MIKE: SECRETARY NEITZEL, WHAT DO YOU SAY TO CRITICS OF THE DEAL WHO WORRY ABOUT THE ENVIRONMENT A ? THEY SAY WE ARE GIVING FOXCONN PREFERENTIAL TREATMENT. SEC. NEITZEL: THAT IS A MISNOMER. MIKE: IN WHAT SENSE? SEC. NEITZEL: THEY WILL STILL HAVE TO MEET EVERY REQUIREMENT FOR AIR, WATER, HAZARDOUS WASTE AND SOLID WASTE. WE ARE STREAMLINING SOME OF THE UPFRONT PAPERWORK. MIKE: LIKE THE ENVIRONMENT WILL AL IMPACT STATEMENT. SEC. NEITZEL: CORRECT. BUT THAT DOESN’T EXEMPT THEM FROM HAVING TO MEET ALL THE ENVIRONMENT OBLIGATIONS IN THE STATUTE. ON THE WETLANDS ISSUE, THEY WILL STILL BE SUBJECT TO FEDERAL WETLANDS REGULATION. ON THE STATE WETLANDS, IF THERE’S ANY WETLANDS THAT HAVE TO BE FILLED IN, THEY HAVE TO REPLACE THOSE ANY RATIO OF TWO — AT A RATIO OF TWO ACRES FOR EVERY ONE THAT IS FILLED IN, WHICH IS HIGHER THAN THE CURRENT LAW WHICH SAYS 1.2 TO ONE. MIKE: WE TALK ABOUT THE TAX INCENTIVES, HOW THIS WORKS. IN 2024, THE STATE IS PAYING FOXCONN $312 MILLION BID THOSE . THOSE ARE BIG NUMBERS. IS THAT TRULY STATE TAXPAYER DOLLARS? HELP US BETTER UNDERSTAND WHAT WERE TALKING ABOUT. MARK: WHAT WILL HAPPEN IS NOT A DOLLAR OF TAXPAYER MONEY GOES OUT BEFORE THE COMPANY SPENDS MONEY. THEY WILL START THE PROCESS OF HIRING PEOPLE AND BUILDING THE PLANT. AT THE END OF EACH YEAR, THEY WILL SUBMIT THE INFORMATION ON THE WAGES PAID IN THE CAPITAL EXPENDITURES INCURRE MIKE: LET ME ASK A QUESTION YOU HEAR OFTEN WITH FOXCONN. THEY SAY PROMISES HAVE BEEN MADE BEFORE BUT HAVEN’T BEEN KEPT. YOU HEAR ABOUT HARRISBURG, PENNSYLVANIA. OVERSEAS. YOU HEAR THAT, THAT THEY FAIL TO KEEP PROMISES. WHAT IS YOUR RESPONSE TO THAT? SEC. NEITZEL: WE ASKED THEM THAT QUESTION DIRECTLY. THAT IS PART OF OUR DUE DILIGENCE ON BEHALF OF TAXPAYERS IN WISCONSIN. WHAT THE SITUATION WAS IN PENNSYLVANIA WAS THRE WAS A CHANGE IN ADMINISTRATION IN PENNSYLVANIA. THERE WAS A DESIRE TO MAYBE GET A DIFFERENT DEAL THAN WHAT WAS NEGOTIATED. WHAT HAVE BEEN IN BRAZIL, YOU HAD THE PRESIDENT THERE WHO WAS ULTIMATELY IMPEACHED. THAT BUSINESS CLIMATE CHANGE ALSO. IT GOES BACK TO WHAT SECRETARY HOGAN SAID. WE’VE HAD SIX SOLID YEARS OF IMPROVED BUSINESS CLIMATE. SITE SELECTOR MAGAZINE RANKED US ONE OF THE TOP STATES IN THE COUNTRY. IT IS THAT CONTINUITY AND THAT CONSISTENCY OF PURPOSE THAT THE STATE HAS. WE ARE NOT WORRIED AT ALL ABOUT THAT. MIKE: YOU DON’T THINK THAT IS SOMETHING THAT THEY COULD WALK AWAY FROM? SEC. NEITZEL: IF YOU’VE SEEN THE COMMITMENT WE’VE SEEN ON BEHALF OF THE COMPANY COMMIT THEY’VE HAD A NUMBER OF HIGH-LEVEL EXECUTIVES HERE FOR LONG PERIODS OF TIME. THEY’VE ALREADY MADE A COMMITMENT TO BEING HEREIN WISCONSIN. I REFERENCED THE MOU’S THEY’VE THEY ARE ALREADY TALKING TO A NUMBER OF BUSINESSES ABOUT RELATIONSHIPS THEY CAN HAVE. WE FEEL THEY ARE EXTREMELY COMMITTED TO BEING HERE IN WISCONSIN. MIKE: YOU WANT TO ADDRESS THAT? SEC. HOGAN: ABSOLUTELY. I’VE BEEN INVOLVED SINCE THE FIRST MEETING IN THE WHITE HOUSE ON APRIL 28. WITHIN A WEEK, THERE WERE PEOPLE COMING FROM FOXCONN TO WISCONSIN. TWO WEEKS AFTER THAT DATE, THEY HAD 35 PEOPLE IN THE STATE WORKING WITH OUR LOCAL ECONOMIC DEVELOPMENT. EVERY STEP OF THE WAY, THEY HAVE COMMITTED A TIME AND PEOPLE AND RESOURCES TO LOOKING AT WISCONSIN AS THE PLACE THEY WANT TO BE. MIKE: THIS IS A COMPLEX DEAL. IT WILL BE FINALIZED BY SEPTEMBER 30. THE GOVERNOR WOULD LIKE TO HAVE THIS DONE BY LABOR DAY. WHY THE URGENCY? SEC. NEITZEL: THE COMPANY WANTS TO GET MANUFACTURING IN WISCONSIN IN NORTH AMERICA AS SOON AS POSSIBLE. WE ARE TRYING TO ACCOMMODATE A SCHEDULE THAT GOES ON INTERNATIONAL BUSINESS TIMETABLES. THE COMPANY WANTS TO PUT 13,000 JOBS IN WISCONSIN. AN AVERAGE OF $54,000 PLUS BENEFITS. WHY WOULD WE WAIT? WE HAVE HAD A VERY TRANSPARENT PROCESS. WE’VE BEEN TALKING WITH THE LEADERSHIP IN BOTH HOUSES ON BOTH SIDES OF THE AISLE SINCE JUNE. WE’VE BEEN FULLY OPEN WITH WHAT’S IN THE PACKAGE AND WHAT’S IN THE MOU. THEY WANT TO GET GOING SO WE WANT TO BE GOING. THIS TRANSFORMATION AND DEAL — SO THIS TRANSFORMATIONAL DEAL CAN START IMPACTING THE CITIZENS OF WISCONSIN. MIKE: YOU WOULD LIKE TO SEE BOTH THE ASSEMBLY AND THE SENATE VOTE ON THIS? SEC. NEITZEL: WE WOULD LIKE TO GET EVERYTHING WRAPPED UP BY THE END OF SEPTEMBER. WE NEED THE LEGISLATION BEFORE WE CAN SIGN THE FINAL CONTRACT. SOMETIME AROUND LABOR DAY WOULD BE A GREAT TIME PERIOD. MIKE: YOU MET WITH THE REPUBLICAN CAUCUS THE OTHER DAY. THERE HAVE BEEN SOME PEOPLE WHO’VE HAD QUESTIONS ABOUT THE DEAL. SEC. HOGAN: THERE WERE GREAT QUESTIONS, VERY GOOD SUPPORT IN THE MEETING. SENATOR FITZGERALD WAS QUOTED COMING OUT OF THE MEETING SAYING IT WAS AN OUTSTANDING TWO HOURS. MIKE: LET ME WALK THROUGH ONE OTHER PART OF THIS DEAL. WE TALK ABOUT THE TAX INCENTIVES, HOW THIS WORKS. THE FISCAL BUREAU SAYS IN 2024, THE STATE IS PAYING FOXCONN $312 MILLION BID THOSE ARE BIG . THOSE ARE BIG NUMBERS. IS THAT TRULY STATE TAXPAYER DOLLARS? HELP US BETTER UNDERSTAND WHAT WE ARE TALKING ABOUT. MARK: WHAT WILL HAPPEN IS NOT A DOLLAR OF TAXPAYER MONEY GOES OUT BEFORE THE COMPANY SPENDS MONEY. THEY WILL START THE PROCESS OF HIRING PEOPLE AND BUILDING THE PLANT. AT THE END OF EACH YEAR, THEY WILL SUBMIT THE INFORMATION ON THE WAGES PAID AND THE CAPITAL EXPENDITURES INCURRED. WE WILL VERIFY THAT INFORMATION AND CERTIFY IT AND GIVE THEM A CERTIFICATION THAT THEY TURN OVER TO THE DEPARTMENT OF REVENUE FOR EITHER CREDITING AGAINST THEIR TAXES OR THEY WILL RECEIVE A REFUNDABLE CREDIT. MIKE: I MENTIONED THIS BREAKEVEN POINT OF 2043. THAT DOES DEPEND ON A LOT OF THINGS GOING RIGHT. 13,000 JOBS BEING CREATED. ALL OF THIS IS TIED TOGETHER. THIS IS A TERRIBLY FAST-PACED WORLD WE LIVE IN. DO YOU HAVE CONCERNS THAT THE AMOUNT OF JOBS WE ARE TALKING ABOUT RIGHT NOW COULD IN FACT BE MANY FEWER BECAUSE OF THE RAPID CHANGES IN TECHNOLOGY? SEC. NEITZEL: I THINK IT WILL BE JUST THE OPPOSITE. IN OUR DISCUSSIONS WITH THE COMPANY, I THINK THIS WILL BRING MORE OPPORTUNITY TO WISCONSIN. WE HAVE SEEN IT WITH OTHER WISCONSIN COMPANIES. ONCE THEY ARE HERE AND THEY’VE MADE A COMMITMENT, WHEN THEY ARE LOOKING TO EXPAND THE LINE OR EXPAND A BUSINESS OPPORTUNITY, THEY WILL LOOK TO DO IT HERE IN WISCONSIN. THE NUMBERS IN THE FISCAL BUREAU REPORT ARE FAIRLY CONSERVATIVE. I DON’T THINK THAT CURRENT MODEL CAN ACCURATELY CAPTURE JUST HOW TRANSFORMATIONAL THIS ECOSYSTEM, THIS HIGH-TECH MANUFACTURING ECOSYSTEM — IT’S MORE THAN JUST A MANUFACTURING PLANT. THAT’S THE ONE THING I WOULD LIKE TO LEAVE YOU AND THE VIEWERS WITH. THIS IS A HIGH-TECH MANUFACTURING ECOSYSTEM. IT IS NOT GOING TO SEND OUT RIPPLES IN ECONOMIC BENEFIT, IT WILL SEND OUT WAVES. AS FAR AS THE BREAKEVEN, JUST LAST WEEK, THE STATE OF WISCONSIN WAS UPGRADED — OUR BOND RATING WAS UPGRADED. THEY WERE FULLY AWARE OF THIS DEAL. THAT IS A DISINTERESTED THIRD PARTY OBSERVER — THEY KNEW ABOUT THIS DEAL AND WE GOT AN UPGRADE. MIKE: YOU Y BOTH HEARD THIS. YOU’VE BEEN BUSY DOING WHAT YOU DO, PUTTING THE FINISHING TOUCHES ON THIS DEAL. I’M SURE YOU’VE READ SOME OF THE CRITICISM. WISCONSIN HAS GIVEN AWAY THE STORE ON THIS DEAL. COULD YOU HAVE DRIVEN A HARDER BARGAIN IN THE NEGOTIATIONS WITH FOXCONN? SEC. HOGAN: NO. I DON’T BELIEVE SO. WE DIDN’T MEET THE NUMBER THEY ASK FOR. WHEN WE LOOK AT IT, EVERY STEP OF THE WAY — SCOTT AND I HAVE BEEN INVOLVED IN THIS FROM DAY ONE. WE WANT A GOOD DEAL FOR THE STATE OF WISCONSIN. ULTIMATELY, WHEN WE LOOKED AT IT AND LOOK AT THE CAPITAL EXPENDITURES AND ALL THE OTHER THINGS THAT GO WITH IT THAT YOU CANNOT QUANTIFY, WE TRUL CONSIDER IT TODAY AND SAY THIS IS A GOOD DEAL FOR THE STATE OF WISCONSIN. THERE’S AN INCREDIBLE COMMITMENT ON THE PART OF THE COMPANY AND THE OPPORTUNITY FOR THE STATE OF WISCONSIN IS LIMITLESS. SEC. NEITZEL: OUR OBJECTIVE WAS TO GET A GOOD DEAL FOR THE STATE OF WISCONSIN. WE GOT A GOOD DEAL FOR THE TAXPAYERS OF WISCONSIN THAT WILL BRING 13,000 HIGH-PAYING JOBS TO WISCONSIN AND CREATE ECONOMIC BENEFIT ACROSS THE STATE IN THRE FOR YEARS TO COME. MIKE: IT APPEARS THERE’S A GOOD CHANCE OF IT PASSING IN THE SENATE. WHAT WOULD BE THE MESSAGE IF FOR SOME REASON THIS DEAL GOT BOGGED DOWN AND DIDN’T HAPPEN? SEC. HOGAN: IT’S NOT GOING TO HAPPEN. I COME WITH 40 YEARS OF BANKER EXPERIENCE. I DON’T ALWAYS LOOK AT THINGS ON THE POSITIVE SIDE, BUT I DON’T SEE THAT HAPPENING. EVERY STEP OF THE WACOM EVERY CONVERSATION WE’VE HAD, PEOPLE ARE VERY POSITIVE ABOUT THIS. THEY WANT TO DO THE RIGHT THING FOR WISCONSIN. IT WILL GET THROUGH THE ASSEMBLY IN THE SENATE BECAUSE THEY WANT THE RIGHT THING TO HAPPEN FOR WISCONSIN. SEC. NEITZEL: ABSOLUTELY. MIKE: SECRETARY NEITZEL AND SECRETARY MARK HOGAN, THANK YOU

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