A day after Gov. Tony Evers announced he wants to renegotiate the state's contract with Foxconn, Northwoods state Sen. Tom Tiffany (R-Hazelhurst) said the governor is shutting the door to business growth around the state.
Tiffany said he worries Evers' intention to back out of the state's contract with the Taiwanese company could signal the state might walk away from its commitments to other businesses with similar contracts.
Under the contract, Foxconn could receive close to $3 billion in job creation and investment subsidies after it hits specified contractual targets. The company pledged to create 13,000 jobs.
"Gov. Evers' statement that he does not intend to honor the contract with Foxconn causes me great concern," Tiffany said. "My district is about as far away from Foxconn as it gets, yet I have several successful businesses throughout the 12th Senate District that have negotiated similar contracts."
Tiffany questioned whether the state could or would now reconsider other contracts.
"Is Gov. Evers setting a precedent that jeopardizes all contracts and loans previously negotiated by the state?" Tiffany asked. "Are the businesses in my district that have entered into contracts with the state in jeopardy as a result of this? Should companies like Kimberly Clark be concerned?"
Tiffany said he also worried about what impact the governor's announcement might have on businesses considering relocating to Wisconsin.
"For the past eight years, Wisconsin was open for business, and legislative Republicans worked to foster a climate where companies wanted to expand and bring jobs here," he said. "Businesses, not just in Wisconsin, but all across the country are watching to see if Wisconsin is still open for business."
Last Wednesday, speaking to reporters in Madison, Evers said Foxconn's pledge to create 13,000 jobs was an "unrealistic expectation," given the company's acknowledged plans to scale back its original manufacturing footprint, and he wanted the contract renegotiated.
"Clearly the deal that was struck is no longer in play and so we will be working with individuals at Foxconn and of course with the Wisconsin Economic Development Corporation to figure out how a new set of parameters should be negotiated," the Milwaukee Journal Sentinel reported Evers as telling reporters.
After the governor's remarks, Foxconn issued a statement reiterating its plans to build in the state.
"Foxconn's commitment to job creation in Wisconsin remains long term and will span over the length of the Wisconsin Economic Development Corporation contract and beyond," the company stated.
On the Left, One Wisconsin Now applauded the governor's announcement.
"Gov. Evers's call to re-open the Foxconn deal in light of Foxconn's backsliding on their Wisconsin jobs and investment promises shows he's looking out first and foremost for Wisconsin," said One Wisconsin Now executive director Analiese Eicher. "Meanwhile Republican legislative leaders Robin Vos and Scott Fitzgerald, who along with Scott Walker, conspired to put us on the hook for the largest state subsidy to a foreign corporation in history are more interested in trying to cover their political backsides."
Both Vos and Fitzgerald underscored Tiffany's concerns, saying the governor was trying to sabotage the Foxconn contract and the WEDC.
"This completes the original narrative that the governor has wanted to undermine the Wisconsin Economic Development Corporation from day one," Fitzgerald (R-Juneau), the Senate majority leader, said. "If the state is willing to renege on its commitment to Foxconn and open up a contract without agreement by both parties, then what guarantee can Wisconsin make to any other company that wants to expand here?"
Assembly speaker Robin Vos (R-Rochester) said he had been worried since the election that the governor would try to undermine the state's contract with Foxconn.
"Luckily, WEDC negotiated an ironclad contract with expectations from both sides," Vos said. "As Foxconn works to create 13,000 jobs in Wisconsin, I'm open to hearing if any flexibility is needed to achieve that goal, which I hope is the intent of Gov. Evers."
Rep. Samantha Kerkman (R-Salem) said helping Wisconsin's job growth and promoting economic development should be the focus of everyone in state government.
"Gov. Evers's statement that he intends to renegotiate a bipartisan legislative state government contract doesn't help our state's job creators," Kerkman said.
Kerkman also said none of the incentives promised to Foxconn actually go to the company unless it meets its contractual obligations.
"The simple truth is that the Foxconn contract is structured as a 'pay-as-you-grow' plan," she said. "No state incentive money goes out the door until the jobs are created or shovels are in the ground. We need to continue to make Wisconsin more attractive to corporations who can choose to locate their jobs and operations anywhere in the world. We need to make sure that our state government has the reputation of holding up their end of the bargain."
State Sen. Van Wanggaard (R-Racine) said the governor was seeking to kill job creation not only in his district, but around the state.
"Gov. Evers appears hell bent to kill thousands of direct and indirect Foxconn jobs throughout Wisconsin," Wanggaard said.
Wanggaard also said this was just the latest in a series of attempts by Evers to kill the Foxconn project.
"First, Gov. Evers hoped that his rhetoric would drive Foxconn away," he said. "When it recommitted to Wisconsin, he threatened its air permits. After his political appointees at the DNR reaffirmed the air permits, Foxconn recommitted again by buying a building that you can see from Gov. Evers's office."
Now, Wanggaard continued, Evers is trying to drive Foxconn out of Wisconsin by unilaterally renegotiating the contract between the company and the state.
"The contract is simple," he said. "If Foxconn doesn't perform to its obligations under its contract with the state, Foxconn doesn't receive any incentives from the state. If Foxconn underperforms, it leaves incentives on the table."
Evers's maneuver would damage Wisconsin, Wanggaard warned.
"What job creator, what person, would come to a state that goes back on its promises?" he asked. "Evers should keep his campaign promises and respect the deal that was made."
Richard Moore is the author of the forthcoming "Storyfinding: From the Journey to the Story." and can be reached at richardmoorebooks.com.
Posted: Tuesday, April 23, 2019
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I'd remind Tiffany that it was Foxconn that backed off on it's projections after they landed the sweetheart deal. So, essentially, Foxconn broke the contract and Evers wants to formally renegotiate it in light of the lower jobs creation forecast. Why should Foxconn get everything without delivering what it promised? Renegotiating a contract is what most business people do when the other side does not intend to hold up its end of the bargain. But Tiffany once again shows us his magical thinking prowess.
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