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Apple has become one of the best-known, most admired and most imitated companies on earth, in part through an unrelenting mastery of global operations. Last year, it earned over $400,000 in profit per employee, more than Goldman Sachs, Exxon Mobil or Google.

However, what has vexed Mr. Obama as well as economists and policy makers is that Apple - and many of its high-technology peers - are not nearly as avid in creating American jobs as other famous companies were in their heydays.

Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apple's contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple's other products. But almost none of them work in the United States. Instead, they work for foreign companies in Asia, Europe and elsewhere, at factories that almost all electronics designers rely upon to build their wares.

"Apple's an example of why it's so hard to create middle-class jobs in the U.S. now," said Jared Bernstein, who until last year was an economic adviser to the White House.

"If it's the pinnacle of capitalism, we should be worried."

Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone's screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.

A foreman immediately roused 8,000 workers inside the company's dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.

"The speed and flexibility is breathtaking," the executive said. "There's no American plant that can match that."

Similar stories could be told about almost any electronics company - and outsourcing has also become common in hundreds of industries, including accounting, legal services, banking, auto manufacturing and pharmaceuticals.

But while Apple is far from alone, it offers a window into why the success of some prominent companies has not translated into large numbers of domestic jobs. What's more, the company's decisions pose broader questions about what corporate America owes Americans as the global and national economies are increasingly intertwined.

"Companies once felt an obligation to support American workers, even when it wasn't the best financial choice," said Betsey Stevenson, the chief economist at the Labor Department until last September. "That's disappeared. Profits and efficiency have trumped generosity."

Companies and other economists say that notion is naïve. Though Americans are among the most educated workers in the world, the nation has stopped training enough people in the mid-level skills that factories need, executives say.

To thrive, companies argue they need to move work where it can generate enough profits to keep paying for innovation. Doing otherwise risks losing even more American jobs over time, as evidenced by the legions of once-proud domestic manufacturers - including G.M. and others - that have shrunk as nimble competitors have emerged.

Apple was provided with extensive summaries of The New York Times 's reporting for this article, but the company, which has a reputation for secrecy, declined to comment.

This article is based on interviews with more than three dozen current and former Apple employees and contractors - many of whom requested anonymity to protect their jobs - as well as economists, manufacturing experts, international trade specialists, technology analysts, academic researchers, employees at Apple's suppliers, competitors and corporate partners, and government officials.

Privately, Apple executives say the world is now such a changed place that it is a mistake to measure a company's contribution simply by tallying its employees - though they note that Apple employs more workers in the United States than ever before.

They say Apple's success has benefited the economy by empowering entrepreneurs and creating jobs at companies like cellular providers and businesses shipping Apple products. And, ultimately, they say curing unemployment is not their job.

"We sell iPhones in over a hundred countries," a current Apple executive said. "We don't have an obligation to solve America's problems. Our only obligation is making the best product possible."
'I Want a Glass Screen'
In 2007, a little over a month before the iPhone was scheduled to appear in stores, Mr. Jobs beckoned a handful of lieutenants into an office. For weeks, he had been carrying a prototype of the device in his pocket.

Mr. Jobs angrily held up his iPhone, angling it so everyone could see the dozens of tiny scratches marring its plastic screen, according to someone who attended the meeting. He then pulled his keys from his jeans.

People will carry this phone in their pocket, he said. People also carry their keys in their pocket. "I won't sell a product that gets scratched," he said tensely. The only solution was using unscratchable glass instead. "I want a glass screen, and I want it perfect in six weeks."

After one executive left that meeting, he booked a flight to Shenzhen, China. If Mr. Jobs wanted perfect, there was nowhere else to go.

For over two years, the company had been working on a project - code-named Purple 2 - that presented the same questions at every turn: how do you completely reimagine the cellphone? And how do you design it at the highest quality - with an unscratchable screen, for instance - while also ensuring that millions can be manufactured quickly and inexpensively enough to earn a significant profit?

The answers, almost every time, were found outside the United States. Though components differ between versions, all iPhones contain hundreds of parts, an estimated 90 percent of which are manufactured abroad. Advanced semiconductors have come from Germany and Taiwan, memory from Korea and Japan, display panels and circuitry from Korea and Taiwan, chipsets from Europe and rare metals from Africa and Asia. And all of it is put together in China.

In its early days, Apple usually didn't look beyond its own backyard for manufacturing solutions. A few years after Apple began building the Macintosh in 1983, for instance, Mr. Jobs bragged that it was "a machine that is made in America." In 1990, while Mr. Jobs was running NeXT, which was eventually bought by Apple, the executive told a reporter that "I'm as proud of the factory as I am of the computer." As late as 2002, top Apple executives occasionally drove two hours northeast of their headquarters to visit the company's iMac plant in Elk Grove, Calif.

But by 2004, Apple had largely turned to foreign manufacturing. Guiding that decision was Apple's operations expert, Timothy D. Cook, who replaced Mr. Jobs as chief executive last August, six weeks before Mr. Jobs's death. Most other American electronics companies had already gone abroad, and Apple, which at the time was struggling, felt it had to grasp every advantage.

In part, Asia was attractive because the semiskilled workers there were cheaper. But that wasn't driving Apple. For technology companies, the cost of labor is minimal compared with the expense of buying parts and managing supply chains that bring together components and services from hundreds of companies.

For Mr. Cook, the focus on Asia "came down to two things," said one former high-ranking Apple executive. Factories in Asia "can scale up and down faster" and "Asian supply chains have surpassed what's in the U.S." The result is that "we can't compete at this point," the executive said.

The impact of such advantages became obvious as soon as Mr. Jobs demanded glass screens in 2007.

For years, cellphone makers had avoided using glass because it required precision in cutting and grinding that was extremely difficult to achieve. Apple had already selected an American company, Corning Inc., to manufacture large panes of strengthened glass. But figuring out how to cut those panes into millions of iPhone screens required finding an empty cutting plant, hundreds of pieces of glass to use in experiments and an army of midlevel engineers. It would cost a fortune simply to prepare.

Then a bid for the work arrived from a Chinese factory.

When an Apple team visited, the Chinese plant's owners were already constructing a new wing. "This is in case you give us the contract," the manager said, according to a former Apple executive. The Chinese government had agreed to underwrite costs for numerous industries, and those subsidies had trickled down to the glass-cutting factory. It had a warehouse filled with glass samples available to Apple, free of charge. The owners made engineers available at almost no cost. They had built on-site dormitories so employees would be available 24 hours a day.

The Chinese plant got the job.

"The entire supply chain is in China now," said another former high-ranking Apple executive. "You need a thousand rubber gaskets? That's the factory next door. You need a million screws? That factory is a block away. You need that screw made a little bit different? It will take three hours."
In Foxconn City
An eight-hour drive from that glass factory is a complex, known informally as Foxconn City, where the iPhone is assembled. To Apple executives, Foxconn City was further evidence that China could deliver workers - and diligence - that outpaced their American counterparts.

That's because nothing like Foxconn City exists in the United States.

The facility has 230,000 employees, many working six days a week, often spending up to 12 hours a day at the plant. Over a quarter of Foxconn's work force lives in company barracks and many workers earn less than $17 a day. When one Apple executive arrived during a shift change, his car was stuck in a river of employees streaming past. "The scale is unimaginable," he said.

Foxconn employs nearly 300 guards to direct foot traffic so workers are not crushed in doorway bottlenecks. The facility's central kitchen cooks an average of three tons of pork and 13 tons of rice a day. While factories are spotless, the air inside nearby teahouses is hazy with the smoke and stench of cigarettes.

Foxconn Technology has dozens of facilities in Asia and Eastern Europe, and in Mexico and Brazil, and it assembles an estimated 40 percent of the world's consumer electronics for customers like Amazon, Dell, Hewlett-Packard, Motorola, Nintendo, Nokia, Samsung and Sony.

"They could hire 3,000 people overnight," said Jennifer Rigoni, who was Apple's worldwide supply demand manager until 2010, but declined to discuss specifics of her work. "What U.S. plant can find 3,000 people overnight and convince them to live in dorms?"

In mid-2007, after a month of experimentation, Apple's engineers finally perfected a method for cutting strengthened glass so it could be used in the iPhone's screen. The first truckloads of cut glass arrived at Foxconn City in the dead of night, according to the former Apple executive. That's when managers woke thousands of workers, who crawled into their uniforms - white and black shirts for men, red for women - and quickly lined up to assemble, by hand, the phones. Within three months, Apple had sold one million iPhones. Since then, Foxconn has assembled over 200 million more.

Foxconn, in statements, declined to speak about specific clients.

"Any worker recruited by our firm is covered by a clear contract outlining terms and conditions and by Chinese government law that protects their rights," the company wrote. Foxconn "takes our responsibility to our employees very seriously and we work hard to give our more than one million employees a safe and positive environment."

The company disputed some details of the former Apple executive's account, and wrote that a midnight shift, such as the one described, was impossible "because we have strict regulations regarding the working hours of our employees based on their designated shifts, and every employee has computerized timecards that would bar them from working at any facility at a time outside of their approved shift." The company said that all shifts began at either 7 a.m. or 7 p.m., and that employees receive at least 12 hours' notice of any schedule changes.

Foxconn employees, in interviews, have challenged those assertions.

Another critical advantage for Apple was that China provided engineers at a scale the United States could not match. Apple's executives had estimated that about 8,700 industrial engineers were needed to oversee and guide the 200,000 assembly-line workers eventually involved in manufacturing iPhones. The company's analysts had forecast it would take as long as nine months to find that many qualified engineers in the United States.

In China, it took 15 days.

Companies like Apple "say the challenge in setting up U.S. plants is finding a technical work force," said Martin Schmidt, associate provost at the Massachusetts Institute of Technology. In particular, companies say they need engineers with more than high school, but not necessarily a bachelor's degree. Americans at that skill level are hard to find, executives contend. "They're good jobs, but the country doesn't have enough to feed the demand," Mr. Schmidt said.

Some aspects of the iPhone are uniquely American. The device's software, for instance, and its innovative marketing campaigns were largely created in the United States. Apple recently built a $500 million data center in North Carolina. Crucial semiconductors inside the iPhone 4 and 4S are manufactured in an Austin, Tex., factory by Samsung, of South Korea.

But even those facilities are not enormous sources of jobs. Apple's North Carolina center, for instance, has only 100 full-time employees. The Samsung plant has an estimated 2,400 workers.

"If you scale up from selling one million phones to 30 million phones, you don't really need more programmers," said Jean-Louis Gassée, who oversaw product development and marketing for Apple until he left in 1990. "All these new companies - Facebook, Google, Twitter - benefit from this. They grow, but they don't really need to hire much."

It is hard to estimate how much more it would cost to build iPhones in the United States. However, various academics and manufacturing analysts estimate that because labor is such a small part of technology manufacturing, paying American wages would add up to $65 to each iPhone's expense. Since Apple's profits are often hundreds of dollars per phone, building domestically, in theory, would still give the company a healthy reward.

But such calculations are, in many respects, meaningless because building the iPhone in the United States would demand much more than hiring Americans - it would require transforming the national and global economies. Apple executives believe there simply aren't enough American workers with the skills the company needs or factories with sufficient speed and flexibility. Other companies that work with Apple, like Corning, also say they must go abroad.

Manufacturing glass for the iPhone revived a Corning factory in Kentucky, and today, much of the glass in iPhones is still made there. After the iPhone became a success, Corning received a flood of orders from other companies hoping to imitate Apple's designs. Its strengthened glass sales have grown to more than $700 million a year, and it has hired or continued employing about 1,000 Americans to support the emerging market.

But as that market has expanded, the bulk of Corning's strengthened glass manufacturing has occurred at plants in Japan and Taiwan.

"Our customers are in Taiwan, Korea, Japan and China," said James B. Flaws, Corning's vice chairman and chief financial officer. "We could make the glass here, and then ship it by boat, but that takes 35 days. Or, we could ship it by air, but that's 10 times as expensive. So we build our glass factories next door to assembly factories, and those are overseas."

Corning was founded in America 161 years ago and its headquarters are still in upstate New York. Theoretically, the company could manufacture all its glass domestically. But it would "require a total overhaul in how the industry is structured," Mr. Flaws said. "The consumer electronics business has become an Asian business. As an American, I worry about that, but there's nothing I can do to stop it. Asia has become what the U.S. was for the last 40 years."
Middle-Class Jobs Fade
The first time Eric Saragoza stepped into Apple's manufacturing plant in Elk Grove, Calif., he felt as if he were entering an engineering wonderland.

It was 1995, and the facility near Sacramento employed more than 1,500 workers. It was a kaleidoscope of robotic arms, conveyor belts ferrying circuit boards and, eventually, candy-colored iMacs in various stages of assembly. Mr. Saragoza, an engineer, quickly moved up the plant's ranks and joined an elite diagnostic team. His salary climbed to $50,000. He and his wife had three children. They bought a home with a pool.

"It felt like, finally, school was paying off," he said. "I knew the world needed people who can build things."

At the same time, however, the electronics industry was changing, and Apple - with products that were declining in popularity - was struggling to remake itself. One focus was improving manufacturing. A few years after Mr. Saragoza started his job, his bosses explained how the California plant stacked up against overseas factories: the cost, excluding the materials, of building a $1,500 computer in Elk Grove was $22 a machine. In Singapore, it was $6. In Taiwan, $4.85. Wages weren't the major reason for the disparities. Rather it was costs like inventory and how long it took workers to finish a task.

"We were told we would have to do 12-hour days, and come in on Saturdays," Mr. Saragoza said. "I had a family. I wanted to see my kids play soccer."

Modernization has always caused some kinds of jobs to change or disappear. As the American economy transitioned from agriculture to manufacturing and then to other industries, farmers became steelworkers, and then salesmen and middle managers. These shifts have carried many economic benefits, and in general, with each progression, even unskilled workers received better wages and greater chances at upward mobility.

But in the last two decades, something more fundamental has changed, economists say. Midwage jobs started disappearing. Particularly among Americans without college degrees, today's new jobs are disproportionately in service occupations - at restaurants or call centers, or as hospital attendants or temporary workers - that offer fewer opportunities for reaching the middle class.

Even Mr. Saragoza, with his college degree, was vulnerable to these trends. First, some of Elk Grove's routine tasks were sent overseas. Mr. Saragoza didn't mind. Then the robotics that made Apple a futuristic playground allowed executives to replace workers with machines. Some diagnostic engineering went to Singapore. Middle managers who oversaw the plant's inventory were laid off because, suddenly, a few people with Internet connections were all that were needed.

Mr. Saragoza was too expensive for an unskilled position. He was also insufficiently credentialed for upper management. He was called into a small office in 2002 after a night shift, laid off and then escorted from the plant. He taught high school for a while, and then tried a return to technology. But Apple, which had helped anoint the region as "Silicon Valley North," had by then converted much of the Elk Grove plant into an AppleCare call center, where new employees often earn $12 an hour.

There were employment prospects in Silicon Valley, but none of them panned out. "What they really want are 30-year-olds without children," said Mr. Saragoza, who today is 48, and whose family now includes five of his own.

After a few months of looking for work, he started feeling desperate. Even teaching jobs had dried up. So he took a position with an electronics temp agency that had been hired by Apple to check returned iPhones and iPads before they were sent back to customers. Every day, Mr. Saragoza would drive to the building where he had once worked as an engineer, and for $10 an hour with no benefits, wipe thousands of glass screens and test audio ports by plugging in headphones.
Paydays for Apple
As Apple's overseas operations and sales have expanded, its top employees have thrived. Last fiscal year, Apple's revenue topped $108 billion, a sum larger than the combined state budgets of Michigan, New Jersey and Massachusetts. Since 2005, when the company's stock split, share prices have risen from about $45 to more than $427.

Some of that wealth has gone to shareholders. Apple is among the most widely held stocks, and the rising share price has benefited millions of individual investors, 401(k)'s and pension plans. The bounty has also enriched Apple workers. Last fiscal year, in addition to their salaries, Apple's employees and directors received stock worth $2 billion and exercised or vested stock and options worth an added $1.4 billion.

The biggest rewards, however, have often gone to Apple's top employees. Mr. Cook, Apple's chief, last year received stock grants - which vest over a 10-year period - that, at today's share price, would be worth $427 million, and his salary was raised to $1.4 million. In 2010, Mr. Cook's compensation package was valued at $59 million, according to Apple's security filings.

A person close to Apple argued that the compensation received by Apple's employees was fair, in part because the company had brought so much value to the nation and world. As the company has grown, it has expanded its domestic work force, including manufacturing jobs. Last year, Apple's American work force grew by 8,000 people.

While other companies have sent call centers abroad, Apple has kept its centers in the United States. One source estimated that sales of Apple's products have caused other companies to hire tens of thousands of Americans. FedEx and United Parcel Service, for instance, both say they have created American jobs because of the volume of Apple's shipments, though neither would provide specific figures without permission from Apple, which the company declined to provide.

"We shouldn't be criticized for using Chinese workers," a current Apple executive said. "The U.S. has stopped producing people with the skills we need."

What's more, Apple sources say the company has created plenty of good American jobs inside its retail stores and among entrepreneurs selling iPhone and iPad applications.

After two months of testing iPads, Mr. Saragoza quit. The pay was so low that he was better off, he figured, spending those hours applying for other jobs. On a recent October evening, while Mr. Saragoza sat at his MacBook and submitted another round of résumés online, halfway around the world a woman arrived at her office. The worker, Lina Lin, is a project manager in Shenzhen, China, at PCH International, which contracts with Apple and other electronics companies to coordinate production of accessories, like the cases that protect the iPad's glass screens. She is not an Apple employee. But Mrs. Lin is integral to Apple's ability to deliver its products.

Mrs. Lin earns a bit less than what Mr. Saragoza was paid by Apple. She speaks fluent English, learned from watching television and in a Chinese university. She and her husband put a quarter of their salaries in the bank every month. They live in a 1,080-square-foot apartment, which they share with their in-laws and son.

"There are lots of jobs," Mrs. Lin said. "Especially in Shenzhen."
Innovation's Losers
Toward the end of Mr. Obama's dinner last year with Mr. Jobs and other Silicon Valley executives, as everyone stood to leave, a crowd of photo seekers formed around the president. A slightly smaller scrum gathered around Mr. Jobs. Rumors had spread that his illness had worsened, and some hoped for a photograph with him, perhaps for the last time.

Eventually, the orbits of the men overlapped. "I'm not worried about the country's long-term future," Mr. Jobs told Mr. Obama, according to one observer. "This country is insanely great. What I'm worried about is that we don't talk enough about solutions."

At dinner, for instance, the executives had suggested that the government should reform visa programs to help companies hire foreign engineers. Some had urged the president to give companies a " tax holiday" so they could bring back overseas profits which, they argued, would be used to create work. Mr. Jobs even suggested it might be possible, someday, to locate some of Apple's skilled manufacturing in the United States if the government helped train more American engineers.

Economists debate the usefulness of those and other efforts, and note that a struggling economy is sometimes transformed by unexpected developments. The last time analysts wrung their hands about prolonged American unemployment, for instance, in the early 1980s, the Internet hardly existed. Few at the time would have guessed that a degree in graphic design was rapidly becoming a smart bet, while studying telephone repair a dead end.

What remains unknown, however, is whether the United States will be able to leverage tomorrow's innovations into millions of jobs.

In the last decade, technological leaps in solar and wind energy, semiconductor fabrication and display technologies have created thousands of jobs. But while many of those industries started in America, much of the employment has occurred abroad. Companies have closed major facilities in the United States to reopen in China. By way of explanation, executives say they are competing with Apple for shareholders. If they cannot rival Apple's growth and profit margins, they won't survive.

"New middle-class jobs will eventually emerge," said Lawrence Katz, a Harvard economist. "But will someone in his 40s have the skills for them? Or will he be bypassed for a new graduate and never find his way back into the middle class?"

The pace of innovation, say executives from a variety of industries, has been quickened by businessmen like Mr. Jobs. G.M. went as long as half a decade between major automobile redesigns. Apple, by comparison, has released five iPhones in four years, doubling the devices' speed and memory while dropping the price that some consumers pay.

Before Mr. Obama and Mr. Jobs said goodbye, the Apple executive pulled an iPhone from his pocket to show off a new application - a driving game - with incredibly detailed graphics. The device reflected the soft glow of the room's lights. The other executives, whose combined worth exceeded $69 billion, jostled for position to glance over his shoulder. The game, everyone agreed, was wonderful.

There wasn't even a tiny scratch on the screen.

Correction: January 24, 2012

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Apple, America and a Squeezed Middle Class

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Apple has become one of the best-known, most admired and most imitated companies on earth, in part through an unrelenting mastery of global operations. Last year, it earned over $400,000 in profit per employee, more than Goldman Sachs, Exxon Mobil or Google.

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This would not be a problem if the minimum wage was a living wage, but in many Chinese cities it is anything but. The minimum wage levels in three of China's most expensive cities - Shanghai, Guangzhou and Shenzhen - have just been increased to about 1,100 yuan per month ($160), but this is still not nearly enough. As a Foxconn worker in Shenzhen told a local journalist: "I can earn 1,500 yuan a month with overtime. But after rent, food and clothing, I don't have a cent left."

Many factory workers have to put in more than 60 hours of overtime each month just to get by, performing the same robotic task 12 hours a day, six days a week. No one can stand this mind-numbing and dehumanizing work.

But how can there be change when the workers have no formal channel for their demands and grievances? The trade union at these factories, if there is one, is a hostage to management and will never take the side of the workers in a dispute. Workers have no option but to take matters into their own hands and stage strikes and protests in the hope that the local government, which abhors social instability, will intercede on their behalf.

Some young workers at Foxconn, feeling alone and desperate and seeing no hope for the future, have taken their own lives. Many of the workers at Honda are demanding a genuinely representative union. Strange as it might seem, this could be the answer for management at Honda and Foxconn and factories across China.

Such a union at Foxconn would not only be able to negotiate a decent basic wage, it could also foster a sense of community that would help protect the rights and dignity of all employees. At Honda's supplier factories, a properly functioning trade union would have been able to present workers' demands for higher pay to management at scheduled, peaceful and equal negotiations, and thereby forestall strike action.

Even the Communist Party boss of Guangdong, Wang Yang, now thinks proper trade unions are essential if workers' rights are to be protected. In a telephone conference to discuss the recent strikes in the province last week, he said unions should stand up for workers.

It is not just the trade unions that have to make changes. Local governments have a crucial and long-overdue adjustment to make. For decades now, city governments have been collecting billions of yuan in taxes from companies that employ workers from outside the city limits. Yet these migrant workers have received nothing in return. They are excluded from housing, health care and social services, and their children are excluded from local schools. Until very recently, they could not even cash in their employer's social security contributions when they left the city to move back home.

Some urban governments have made grudging concessions to migrant workers, but most will open their schools and hospitals only to those with relatively well paid and steady jobs. Migrants who really need help are still systematically excluded.

The time has come for city governments across China to repay the debt owed to the migrant workers. Local governments should build low-cost housing for workers, and migrants should be given the same rights to local social services as urban residents - no questions asked.

The final goal should be the eradication of the term "migrant worker" entirely. Workers are workers, no matter where they come from, and they should all be treated with dignity and respect, and at the very least get decent pay for decent work.

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This would not be a problem if the minimum wage was a living wage, but in many Chinese cities it is anything but. The minimum wage levels in three of China's most expensive cities - Shanghai, Guangzhou and Shenzhen - have just been increased to about 1,100 yuan per month ($160), but this is still not nearly enough.

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Multiple Opinion Pieces within this Article

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Multiple Opinion Pieces within this Article

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Plan your next culinary adventure! Browse this interactive map to find Madison-area restaurants you've never tried before, featuring the Wisconsin State Journal's most recent restaurant reviews.

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The Foxconn debate: State Journal opinion writers weigh pros and cons

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Plan your next culinary adventure! Browse this interactive map to find Madison-area restaurants you've never tried before, featuring the Wisconsin State Journal's most recent restaurant reviews.

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Op-ed from Milwaukee Journal Sentinel writer

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Op-ed from Milwaukee Journal Sentinel writer

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CLOSE

Foxconn's massive new factory in Racine County has the potential to change the trajectory of southeastern Wisconsin's economy. The impact of this state-of-the-art, high-tech facility - serving an industry brand new to the U.S. - will ripple across the entire state.

But its sheer size also poses big challenges for Wisconsin's workforce, municipal budgets in the region and even the environment.

What has to happen right now? What already is happening? And what will it take to get ready for this opportunity?

What lessons can we learn from other large-scale developments in other regions?

These are among the questions we'll be asking at the next of our "Across the Divide" community conversations.

Join moderators Mitch Teich of WUWM (89.7 FM) and the Journal Sentinel's Erin Richards at 7 p.m. Nov. 15 at Prairie School in Racine for an in-depth discussion with community leaders and other experts as we ask the question:
What will Foxconn mean for southeastern Wisconsin? This is a free event but you need a ticket. Get one today.
This discussion is the fourth in a series that the Journal Sentinel and its partner, Milwaukee Public Radio, have produced this year. Others have focused on school choice, immigrationand political civility.

Whether you think $3 billion in public incentives to lure the Taiwanese industrial giant was a good deal or bad deal for taxpayers, that decision has been made. The focus now should be on making this arrangement work for all citizens of the region, and indeed, the entire state. The potential for economic growth is huge. As I've written, I hope this turns out just as politicians such as Gov. Scott Walker have said it will. If that happens, it will indeed be transformational, and we all will be the better for it.

Here's our lineup so far for the Prairie School discussion:

* Richard Longworth, a distinguished fellow on global cities at the Chicago Council on Global Affairs. Longworth, a former reporter for the Chicago Tribune, is the author of "Caught in the Middle: America's Heartland in the Age of Globalism" (Bloomsbury USA 2009). The book offers an in-depth examination of the effects of globalization on the Midwest based on thousands of miles of driving the heartland and dozens of interviews.

* Deborah Davidson, vice president, workforce and economic development, Gateway Technical College, Kenosha. Deborah has been closely involved in discussions about worker training as the region prepares for a factory that could one day employ up to 13,000 people.

* John Dickert, president and CEO of the Great Lakes and St. Lawrence Cities Initiative (Cities Initiative). John was a three-term mayor of Racine until resigning earlier this year to take the position with the Cities Initiative. Before becoming mayor, he worked for First Weber Group focusing on commercial and residential redevelopment.

Please join us to discuss this important development. And in the meantime, let me know what questions you have and what specific issues you would like us to address.
David D. Haynes is editorial page editor of the Milwaukee Journal Sentinel. Email: david.haynes@jrn.com. Twitter: @DavidDHaynes
Finally, as always, thank you for your concern for the health and well-being of our region.

Read or Share this story: https://jsonl.in/2xUekUF

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Haynes: Foxconn - a critical conversation about next steps

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CLOSE Foxconn's massive new factory in Racine County has the potential to change the trajectory of southeastern Wisconsin's economy. The impact of this state-of-the-art, high-tech facility - serving an industry brand new to the U.S. - will ripple across the entire state.

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Wisconsin, a Rust Belt state known for its beer, Harley-Davidson motorcycles and the Green Bay Packers, is having its moment in the 21st century's manufacturing spotlight.

With Wednesday's announcement that Taiwanese electronics giant Foxconn Technology Group will build its first U.S. plant in the southeast part of the state, creating 3,000 to 13,000 jobs, Wisconsin - a Republican-led swing state that voted for President Donald Trump - beat out Illinois and other contenders for the $10 billion investment.

No specific site has been identified, and a fair amount of cynicism has been raised, related to both the $3 billion in taxpayer-funded incentives and Apple supplier Foxconn's history of not following through on ambitious U.S. factory announcements. But if the project moves forward as planned, it will create unprecedented challenges for Wisconsin's infrastructure, workforce, education, housing and culture in a relatively tranquil part of the state.

Illinois will face its own challenges, as companies here try to get their foot in the door of a potential customer across the border. Meanwhile, the state, which has scored victories with corporate relocations and thousands of warehouse jobs from high-fliers such as Amazon, currently has no major job incentive program it can use to woo a large employer like Foxconn.

In Wisconsin, the seven-county region said to be the site of the future Foxconn plant - somewhere in the district of Republican House Speaker Paul Ryan - is home to roughly 2 million people, with a healthy unemployment rate just over 4 percent. Layoffs at motorcycle maker Harley-Davidson and the shuttering of retailers such as Sears and Gander Mountain have meant the loss of hundreds of jobs since last year. But those losses are a blip compared with the ultimate impact of Foxconn, which "will be measured in billions," said Tom Still, president of the Wisconsin Technology Council, an industry trade group.

The state's population growth trails that of some southern and western states, but the plant and suppliers it could attract would not only reel in out-of-state workers, but also help Wisconsin retain the technical and engineering talent it's been exporting, said Jim Paetsch, a vice president atMilwaukee 7, a regional economic development group.

"Our universities are graduating more people than our companies need ... and they go elsewhere," Paetsch said. "We will be able to draw people to Wisconsin on a scale that we haven't been able to in the past."

Still, there are challenges to what many expect to be the region's new population magnet. Economic development specialists label this "short-term pain."

The region is tackling a shortage of skilled workers. Some local firms already struggle to find workers with digital expertise, and there are concerns that Foxconn will generate greater competition for that talent. Wages could increase since the expected jobs will average salaries of over $53,000, indicating that the company is looking for skilled workers.

"It will be incumbent upon the state to vastly ramp up its ability to train thousands of skilled workers, quickly," said Ron Starner, executive vice president at Atlanta-based Conway, a corporate expansion and relocation consultancy that publishes Site Selection Magazine. "The reality is that any state would be challenged to provide that many skilled workers in a short period of time."

Starner thinks people from as far away as Minnesota could move to the region in search of jobs at or near Foxconn, including people who are currently unemployed or had given up on looking for work.

There's also the cultural assimilation that will have to occur, particularly for a company with a global reputation of setting up factories in low-wage locations in Asia and Mexico. "They have a certain way of doing things, a work ethic and workplace culture," Starner said. "This is a huge shift. They are really plowing new ground here.

Southeastern Wisconsin also runs the risk of becoming a "company town." On one end, jobs and businesses that serve those workers pop up and flourish. On the other hand, if the company fueling the area leaves or shuts down, it runs the risk of disabling the economy.

Housing and schools to sustain that population will have to be developed. Traffic will increase, and public transportation will need to be equipped to handle commuters.

"We certainly don't think the workforce will only come from state of Wisconsin," said Mark Hogan, CEO, Wisconsin Economic Development Corp. "The fact of the matter is a company like this will draw nationally and internationally. We looked at the infrastructure and we think people will take advantage of that opportunity and we're ready."

The region's proximity to Illinois is a consolation prize for the state, which has succeeded in wooing large employers but nothing of such dramatic scale. By the end of the year, Amazon will employ 8,000 workers in Illinois; that compares with about 4,000 Amazon employees working in a 1.5-million-square-foot facility across the border in Kenosha, Wis. Illinois, and Chicago in particular, has notched wins with the recent headquarters relocations of corporate titans like Conagra and GE Healthcare.

Gov. Bruce Rauner and Intersect Illinois, the state's nonprofit economic development arm, earlier this year made a pitch to Foxconn through the University of Illinois. Foxconn has a presence in the university's research park, and Illinois alumni within the company.

In a February letter to Foxconn chairman Terry Gou, Rauner talked up the state's transportation network, engineering and manufacturing talent, cheap energy prices and roster of global companies, and outlined potential financial incentives, according to emails obtained through a Freedom of Information Act request.

But Intersect Illinois' current president and CEO, Mark Peterson, noted one advantage Illinois couldn't tout. "I don't think it's lost on anybody it's in the Speaker of the House's district, and (the project is) supported by Trump and (Gov.) Scott Walker," Peterson said.

What else might have kept Illinois out of the winner's circle?

Illinois's financial woes have made headlines nationally for months. Companies don't like uncertainty, and "want to know there's not some time bomb down the road," Peterson said.

Also, Illinois isn't a "right to work" state and lacks the union-bypassing legislation that has been adopted by Wisconsin and other Midwest manufacturing states, noted John H. Boyd, principal of The Boyd Company, a Princeton, N.J.-based corporate site selection consultancy.

But even though Foxconn passed on Illinois, the state's selling points likely played a key role in the company's decision because of the area's proximity to Illinois' workforce and a Chicago-area transportation network that includes O'Hare International Airport, Boyd said.

South of the border in Lake and McHenry counties, where Illinois and Wisconsin license plates compete for spaces in parking lots, economic leaders are already preparing to leverage the opportunity and pitch their respective benefits to Foxconn and its suppliers.

"There would absolutely be great spillover opportunities from that," said Kevin Considine, president and CEO of Lake County Partners, a nonprofit economic development organization. "A plant like that will have lots of multiplier effects. It will bring supply chain companies with it, so other companies will set up near it and around it, similar to what happens in automotive."

The question is which side of the border they'll choose.

"When companies compare, the costs are higher here and that makes it more difficult to succeed," said Mark Denzler, vice president and chief operating officer at the Illinois Manufacturers' Association.

Molex CEO Martin Slark said he considered Foxconn's decision to locate in Wisconsin a lost opportunity for Illinois, even if it could still create business opportunities and help grow the electronics industry in the Midwest. The Lisle-based electronics connectors maker is already a "significant" Foxconn supplier, he said in an email.

"The investment environment in this state needs to be improved if we are to attract new investment," Slark said.

Also, Illinois' main job incentive effort, the Economic Development for a Growing Economy Tax Credit Program, expired April 30 and is not currently taking applications. Illinois legislators are working on bringing back a revamped version of the program.

Wisconsin, which gave Foxconn $3 billion in state economic incentives over 15 years if the company invests $10 billion in the state and ultimately adds 13,000 jobs, hasn't committed to offering incentives to Foxconn suppliers, but hasn't ruled it out. "Any supplier that comes, just like any company, will be considered," Hogan said.

The College of Lake County already offers programs in manufacturing, logistics, computer numerical control and other relevant fields and is "looking forward to learning how the college can support their workforce development needs," Anne O'Connell, a College of Lake County spokeswoman, said in a statement Thursday. "CLC recognizes our important role in preparing our students for employment opportunities throughout the region."

Even if Foxconn suppliers choose to set up shop in Wisconsin, "they're still going to buy printing services and trucking and logistics services, and they're going to buy stuff that no doubt will go to Lake County businesses,"said Lake County Partners' Considine.

"We're not competing with Wisconsin in the global economy in the long term," said Bob Weissbourd, president of Chicago-based economic development firm RW Ventures. "For the region to be known as a center for electronics is really great for us in the long term."

For one Chicago startup, the prospect of one of the world's largest contract makers of electronics setting up shop a short drive away, rather than halfway around the world, verges on too good to be true.

"I'm feeling a little mixed, in the sense I hope it's not just for the press conference," said Tanvas CEO Greg Topel. "I hope it adds up, I hope it's real."

Tanvas makes technology that gives touchscreens texture - imagine being able to feel a physical button on a smartphone screen rather than touching a flat image. But the overwhelming majority of those screens are manufactured in Asia.

"It never dawned on us that there would be a consideration that our product could have 'made in the USA' on it," Topel said.

Speculation on the ups and downs of Foxconn's arrival - including the plant's location - will continue.

"There is a lot of uncertainty," said John Heywood, an economics professor at the University of Wisconsin-Milwaukee. "There are a lot of things we don't know. It could bring big benefits, but the devil is in the details."
Chicago Tribune's Alexia Elejalde-Ruiz contributed. lzumbach@chicagotribune.com crshropshire@chicagotribune.com rchannick@chicagotribune.com Twitter @laurenzumbach Twitter @corilyns Twitter @RobertChannick

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Wisconsin's aglow with Foxconn announcement, but can Illinois share the spotlight?

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Wisconsin, a Rust Belt state known for its beer, Harley-Davidson motorcycles and the Green Bay Packers, is having its moment in the 21st century's manufacturing spotlight. With Wednesday's announcement that Taiwanese electronics giant Foxconn Technology Group will build its first U.S.

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Southeastern Wisconsin is in the running to land a behemoth electronics manufacturing facility that could bring 10,000 jobs, a potential game-changer for the region if the deal goes through.

Taiwan-based Foxconn Technology Group, a major electronics manufacturer well known for making Apple's iPhones, has announced plans to invest $10 billion to expand U.S. operations, and although it has not announced where or how that money will be spent, Wisconsin officials have let slip that their state is a top contender.

Illinois Gov. Bruce Rauner reached out to Foxconn earlier this year to make his own pitch for the project and the state "will continue to stay in contact as Foxconn works to consider locations and opportunities in the Midwest," according to an emailed statement Friday from governor's spokeswoman Eleni Demertzis.

But Foxconn appears to be zeroing in on a swath of Wisconsin just north of the border, which would still likely benefit Illinois as the company builds its workforce and supply chain.

"This would be not just a win for the state of Wisconsin, it would send a strong signal to the world that the Midwest as a region is a force to be reckoned with," said Ron Starner, executive vice president at Atlanta-based Conway, a corporate expansion and relocation consultancy that publishes Site Selection Magazine.

Foxconn, also known as Hon Hai Precision Industry, had annual revenues last year of $136.38 billion, according to Nikkei Asian Review, a business journal based in Tokyo. More than half its sales come from Apple.

Speculation about Foxconn's plans has been building since Foxconn chairman Terry Gou announced in January that it was considering building a $7 billion U.S. factory to make LCD display panels in partnership with Japan-based Sharp, which Foxconn purchased last year.

Last month Gou said Foxconn's U.S. expansion efforts could total $10 billion and that he would announce investment plans by early August for at least three states and might add at least three other states later, according to the Associated Press.

Exactly which states are under consideration isn't clear. The Associated Press said Gou listed Illinois, Indiana, Michigan, Ohio, Pennsylvania, Texas and Wisconsin, but the Nikkei Asian Review, did not list Texas and reported that Gou later named North Carolina instead of Illinois.

"Our investment in the U.S. will focus on these states because they are the heart of the country's manufacturing sector," Gou told investors at a company shareholders meeting June 22, according to the AP. He later told reporters that "we are bringing the entire industrial chain back to" the region and the work "may include display making, semiconductor packaging and cloud-related technologies."

The prospect of adding thousands of manufacturing jobs in the Rust Belt has some dreaming of a renaissance for the region.

"It will create a domino effect wherever it goes," said Brad Migdal, senior managing director in the Rosemont office of Cushman & Wakefield, a commercial real estate brokerage.

Illinois stands to benefit if the plant is just across the Wisconsin border, as O'Hare Airport could get more traffic, workers living in Lake County could make the hourlong commute and small businesses could step up to cater to workers' needs, Migdal said. Most important, he said, is the potential for Foxcomm's suppliers to set up shop in the vicinity.

"The biggest question more than anything is, if they come, who comes with them?" Migdal said.

Mark Denzler, chief operating officer at the Illinois Manufacturers' Association, said while the hope would be for such a plant to land in Illinois, having it nearby also is beneficial.

"You would hope that you would have a number of suppliers that would locate around that facility," he said.

Illinois made its case to Gou in a February letter from Rauner that invited him to visit. The letter, provided by the governor's office, said Illinois ranks fourth in the nation for electronics and computer manufacturing and detailed various other assets: the universities' top engineering programs, low energy costs, transportation infrastructure and innovation hubs for advanced manufacturing. Rauner also promised to cut red tape and potentially offer "corporate tax credits, electricity and sales tax exemptions, workforce grants, infrastructure grants and property tax abatements."

But signs suggest the company is interested in Wisconsin.

Wisconsin House Speaker Robin Vos and two other state legislators wrote in a July 5 memo that Foxconn "has indicated its desire to locate in southeastern Wisconsin with up to 10,000 jobs."

U.S. House Speaker Paul Ryan, whose district covers southeastern Wisconsin, said July 7 that he met with Foxconn officials at the request of Wisconsin Gov. Scott Walker and was working to find a "good fit" for the factory, according to the Associated Press.

President Donald Trump fueled the Wisconsin speculation mid-June when he said during a trip to Milwaukee that "just backstage we were negotiating with a major, major incredible manufacturer of phones and computers and televisions, and I think they're going to give the governor a very happy surprise."

Michigan also is gunning for a piece of the Foxconn action, with some lawmakers using the prospect of a Foxconn deal to push for a new $200 million tax incentive program. The program, backed by Gov. Rick Snyder and approved Wednesday, allows companies to keep some or all of the income taxes their employees would otherwise pay to the state, provided the company meets certain job creation and worker wage requirements.

Foxconn, for its part, is only confirming that it is "conducting an evaluation of the conditions and potential locations for establishing manufacturing facilities in the U.S." and said it won't announce plans until negotiations are complete and it has gotten approval from its Board.

In announcing plans for a $7 billion display-making plant in January, Gou said Pennsylvania was a leading candidate. The site selection would depend partly on land and power costs and whether states could offer terms that make it cheaper than shipping from China or Japan, Gou said, according to the Associated Press. The status of the Pennsylvania plant - and whether or not it is the same facility that could now be constructed in Wisconsin - is unclear.

Foxconn's chairman met with the Pennsylvania Department of Community and Economic Development's Taiwan/China investment office representative this January and expressed a desire to invest further in Pennsylvania, but the meeting did not address any specificproject and there are no updates, according to David Smith, the agency's director of communications.

Foxconn has been known to promise big investments that don't pan out.

The company in 2013 announced it would invest $30 million and hire 500 workers for a new factory in central Pennsylvania, but that investment never happened, Smith said.

What kind of manufacturing jobs Foxconn could create in Wisconsin remains to be seen, but given the significantly lower labor costs at Foxconn's huge assembly plants in China it's likely a U.S. facility would be highly automated and focus on higher-skill jobs, Conway's Starner said.

"I don't think they would even be looking at the U.S. if they weren't for some automation solution," Starner said. "To me it has to be driven by technology and access to a higher skilled workforce, which is exactly what Wisconsin provides in droves."

Wisconsin has several advantages that could have drawn Foxconn's attention, Starner said, including abundant and inexpensive water and electricity and a well-educated, hardworking population. The state's community college and state university systems rank among the best in the country in the minds of corporate business leaders, he said.

What the state doesn't have is a lot of people, so to fill 10,000 jobs it would have to recruit from a wide swath, which could easily include Illinois, Starner said. More than 5,100 people living in Illinois, most in Lake County, commuted to work in Kenosha County in the southeastern corner of Wisconsin, according to a 2013 report from the Wisconsin Department of Workforce Development. Nearly 22,000 people living in Kenosha County worked in Illinois.

The size and quality of the labor force are typically the most important factors companies consider when they are choosing locations, said Steve Weitzner, president of Silverlode Consulting in Cleveland. They look at demographics, educational institutions and population change patterns to see how the available workforce will evolve over time.

Other factors companies take into account include real estate, transportation access, utility costs and state and local tax burdens - the latter of which puts Illinois at a disadvantage compared to Wisconsin, Weitzner said. But while some companies want the lowest costs they can find, others care more about the quality of the place. Incentive packages can be a factor but they are temporary, he said.

Foxconn employs about 1 million people across China who make and assemble smartphones and other devices for brands like Apple, Samsung, Sony and BlackBerry. Some of its factories have been criticized for low wages that push workers to work hundreds of hours in overtime to make ends meet; in 2010, a series of suicides at an iPhone factory drew negative publicity.

After that the company significantly lifted wages but progress has "gone backward" as competition among Apple suppliers rose, Li Qiang, director of China Labor Watch, said through a translator. The base monthly salary for a worker at a Chinese Foxconn plant is 2,200 Chinese yuan, or about $325, he said.

Qiang said he does not expect such labor conditions in the U.S., where laws are tighter.

While the prospect of Foxconn's entry to the Midwest is positive, Bob Weissbourd, president of Chicago-based economic development firm RW Ventures, said the big showy get is often not most important to job creation, especially if it comes with the expense of incentives.

"Day to day if you want to grow your economy the best thing you want to do is invest in your existing companies," Weissbourd said.
aelejalderuiz@chicagotribune.com

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If Foxconn brings 10,000 jobs to southeastern Wisconsin, Illinois stands to benefit

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Southeastern Wisconsin is in the running to land a behemoth electronics manufacturing facility that could bring 10,000 jobs, a potential game-changer for the region if the deal goes through. Taiwan-based Foxconn Technology Group, a major electronics manufacturer well known for making Apple's iPhones, has announced plans to invest $10 billion to expand U.S.

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Those that support the Foxconn deal are putting a lot of faith in a company that has not earned it.

Yet, even if Foxconn is reborn, it may not protect our environment or worker safety from disaster. Local managers will compare the bottom line with the cost of fines and penalties. They always do: It's human nature under pressure.

And let's be honest: Supporters know Wisconsin's DNR has been emasculated and will not butt up against whatever Gov. Scott Walker wants. And President Donald Trump's EPA will stand silent.

Then there is the weather: Storms and flooding will frequently wash toxins out of the holding pond into river ways and Lake Michigan. And remember, they will be using millions of gallons of water a day. The manufacturing discharge involved will be deadly and not easy to clean.

Other things are in the bill now to worry about, like the gerrymandering of our legal system, and the opening of the entire state to exemptions from environmental laws.

Our sons and daughters will have to reckon with the environmental degradation, and it will be a heavy price to get back to what we now take for granted -- our beautiful and lovable Wisconsin.

-- Joe Brogan, Madison

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Foxconn is big risk to environment -- Joe Brogan

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Those that support the Foxconn deal are putting a lot of faith in a company that has not earned it. Yet, even if Foxconn is reborn, it may not protect our environment or worker safety from disaster. Local managers will compare the bottom line with the cost of fines and penalties.

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Wisconsin Gov. Scott Walker has signed into law a $3 billion incentive package for the technology giant Foxconn, setting up the Taiwanese company to become the country's biggest foreign recipient of state subsidies.

"Foxconn's creation of 13,000 good-paying, family-supporting WI jobs will have positive impacts on all of WI!" Walker (R) tweeted Monday.

In exchange for the economic sweeteners, Foxconn has agreed to build a flat-screen factory the size of 11 football fields in the southeast corner of Wisconsin.

The technology giant supplies gadgets to Apple, Google and Amazon.

Its latest project, to go up in Racine County, will initially create 3,000 jobs, the company said, but has "the potential to grow" to about 13,000 workers.

However, the state's nonpartisan Legislative Fiscal Bureau raised alarm when it projected that would pass before taxpayers saw a return on the investment. It would take longer, the agency found, if workers from neighboring Illinois commuted into the state to take the Foxconn jobs.

Walker first announced the Foxconn deal with President Trump at the White House in July. It passed the state's legislature last week, though two Republicans and most of the Democrats opposed it, citing the high cost to win the facility with no guaranteed benefits, the Milwaukee Journal Sentinel reported.

Democrats slammed Walker for approving the deal, asserting he should have instead opened more funding for education and infrastructure.

"With a budget that fails to restore school funding and improve local roads, now's not the time to hand over $3 billion in cash payments to a foreign corporation," Wisconsin Senate Democratic Leader Jennifer Shilling said in a statement. "Gov. Walker and Legislative Republicans are putting home-grown businesses at a competitive disadvantage while committing taxpayers to decades of economic costs and liabilities."

The payouts to Foxconn depend on the company following through with both the plant development and hires, Wisconsin officials said. The firm could receive up to $250 million per year in refundable state tax credits for 15 years.

If Foxconn ends up qualifying for the full package, the company would beat the United States record for tax breaks given to a foreign company. Royal Dutch Shell, based in the Netherlands, holds that title - Pennsylvania gave the oil business $1.65 billion in subsidies about five years ago, according to PolitiFact .

Foxconn has also said it will invest $10 billion into the plant and contract local workers to build it.

Walker's office has asserted the deal would ultimately benefit the Wisconsin economy.

"This is a once-in-a-lifetime opportunity that brings high-tech manufacturing back to America, right here in Wisconsin," Walker spokesman Tom Evenson told The Washington Post in an August email. "The company's investment is $10 billion, which is $6.70 of private investment for every $1 of public funds. This is an excellent investment for our entire state."
Read more: The Foxconn deal won't make any money for 25 years, report says Trump is celebrating the Foxconn deal. The people paying for it aren't so sure.

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Scott Walker just approved $3 billion deal for a new Foxconn factory in Wisconsin

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Wisconsin Gov. Scott Walker has signed into law a $3 billion incentive package for the technology giant Foxconn, setting up the Taiwanese company to become the country's biggest foreign recipient of state subsidies. "Foxconn's creation of 13,000 good-paying, family-supporting WI jobs will have positive impacts on all of WI!"

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MADISON - Foxconn Technology Group has hired its first Wisconsin employee for its efforts to build a massive flat-screen plant in Racine County.

The Taiwanese company has already had employees working in the state along with contract lobbyists and public relations specialists.

But the hiring of Chris Murdoch as a special advisor marks the first state resident hired by the company. Murdoch brings an unusual background to the job as a Navy pilot who until last month ran the Naval ROTC program at the University of Wisconsin-Madison.

Foxconn confirmed the hire in a statement late Monday night.

"The recruitment of retired Navy Captain Chris Murdoch as senior advisor, and the strategic and administrative experience and strong links to Wisconsin he brings to Foxconn, will be of immense value to the success of our operation," the statement reads.

Foxconn is planning an up to $10 billion factory that could employ up to 13,000 workers and in exchange draw up to billions of dollars in cash incentives from taxpayers.

The jobs website Indeed.com also is listing 25 more positions in Racine with Foxconn, including titles like human resources manager, payroll coordinator, recruiter, finance manager and engineering jobs.

Murdoch couldn't be reached for comment and a spokesman for UW-Madison had no immediate comment. But an official with the ROTC program confirmed Monday that Murdoch retired from it last month.

"We look forward to announcing our recruitment plans and related timetable in the coming days and weeks," the Foxconn statement reads.

RELATED: Foxconn factory site to be unveiled Wednesday; expected to be in Mount Pleasant

In 2014, Murdoch arrived at UW-Madison after spending 26 years on active duty in the Navy, according to a UW-Madison article on his hire. During his naval career, he flew combat missions in Afghanistan, Iraq, Bosnia and Somalia and commanded Carrier Air Wing Two aboard the USS Ronald Reagan and the F/A-18F "Jolly Rogers" of Strike Fighter Squadron 103.

Murdoch has a bachelor's degree in economics from Harvard and a master's degree in international security at the Fletcher School of Law and Diplomacy, the article says.

Gov. Scott Walker signed legislation last month authorizing up to $3 billion in taxpayer incentives to Foxconn on Sept. 17 at Gateway Technical College in Sturtevant, clearing the way for the company and the governor's administration to negotiate and sign a final contract.

The contract still needs the approval of the Wisconsin Economic Development Corp. board before the deal - and the factory - can move forward.

Foxconn also will have to strike a separate deal with local officials in Racine County - it's still unknown how much property taxpayers there will have to spend to provide the infrastructure and services needed for the plant.

The state deal being considered by WEDC would pay up to $2.85 billion in cash to the company over 15 years to offset 17% of its qualifying payroll costs at the factory as well as 15% of the capital costs of constructing and equipping the plant.

It would also exempt the company from some state environmental rules and speed up the appeals process for litigation over the project in state courts.

Read or Share this story: https://jsonl.in/2khcmHo

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Foxconn hires former Navy pilot as its first Wisconsin employee

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MADISON - Foxconn Technology Group has hired its first Wisconsin employee for its efforts to build a massive flat-screen plant in Racine County. The Taiwanese company has already had employees working in the state along with contract lobbyists and public relations specialists.

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How much is Wisconsin paying for a Taiwanese manufacturer's jobs?

Jonathan Ernst / Reuters

Still, such tax incentives tend to change where investment happens, rather than increasing overall investment-rearranging the economy, rather than boosting it. In this case, Wisconsin's gain proved to be a loss for Ohio, North Carolina, Pennsylvania, Texas, Indiana, and New York. They also have a way of paying companies for investments they might have made anyway, economists think. Researchers at the Urban Institute, the Washington-based think tank, note that "although firms welcome tax incentives, availability of transportation and low labor costs more often drive business decisions about expansion or relocation. Corporate site selection professionals rank the availability of skilled labor and

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adequate land and infrastructure higher than they rank tax policy."

More than that, tax incentives tend to sap state coffers without necessarily generating good jobs or creating positive spillovers in the regional economy-both things that would boost a state's tax revenues and thus help justify the investment. "Incentives are still far too broadly provided to many firms that do not pay high wages, do not provide many jobs, and are unlikely to have research spin-offs," argues Timothy J. Bartik of the W.E. Upjohn Institute for Employment Research, a labor-market research organization, in a major analysis of such state and local tax breaks. "Too many incentives excessively sacrifice the long-term tax base of state and local economies. Too many incentives are refundable and without real budget limits. States devote relatively few resources to incentives that are services, such as customized job training."

Plus, states rarely seem to consider whether the money they lavish on corporations might be better spent elsewhere-on public goods like bridges, say, or educational initiatives for their workforces. "If offering more tax incentives requires spending less on public education, congestion-relieving infrastructure projects, workforce development, police and fire protection, or high technology initiatives at public universities, the overall impact on a state's economy could actually be negative," argues the Institute on Taxation and Economic Policy, a nonprofit research group. "While the long-term economic benefits of education and infrastructure investments may not be as flashy as incentive-backed ribbon-cutting ceremonies, these investments are even more fundamental to any successful economy."

All of these things might be true of the Foxconn deal-and one way or another, 3,000 or 13,000 jobs does not a manufacturing renaissance make. If it even happens: Foxconn made a splashy and lavishly praised promise to build a new high-tech factory in central Pennsylvania a few years ago. It never followed through.

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How much is Wisconsin paying for a Taiwanese manufacturer's jobs? Still, such tax incentives tend to change where investment happens, rather than increasing overall investment-rearranging the economy, rather than boosting it. In this case, Wisconsin's gain proved to be a loss for Ohio, North Carolina, Pennsylvania, Texas, Indiana, and New York.

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Questions Emerge Over What Wisconsin Must Give for Foxconn Plant

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Questions Emerge Over What Wisconsin Must Give for Foxconn Plant

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The Foxconn project has drawn attention far beyond Wisconsin. For Foxconn, the Taiwanese supplier for Apple and other major tech companies and the world's largest contract electronics manufacturer, it would be its first major American factory. The company, based in Taiwan, employs about one million people worldwide, mostly at its sprawling factories in China. For President Trump, who said he had personally helped secure the plan, the project has been held up as a symbol of his administration's work to boost the nation's manufacturing.

Mr. Walker, who has made promises of job creation a centerpiece of his two terms in office, has pushed lawmakers to move quickly in approving the bill, which would offer Foxconn, a producer of flat-panel display screens for televisions and other consumer electronics, close to $3 billion in state tax credits. The subsidies for the Foxconn plant would equal $15,000 to $19,000 per job annually.

"This is not a principled approach to economic development," said Carl Davis, research director at the left-leaning Institute on Taxation and Economic Policy in Washington. "This is buying jobs at a very high price. And it's certainly not small government. This is not stepping out of the way and letting the market do what it does."

The governor and his allies say that costs are far outweighed by the benefits: a massive factory with jobs paying at least $53,000 per year, on average, plus benefits. As some Wisconsinites see it, the Foxconn plant could signal a return to the manufacturing heyday of the southeastern corner of the state, once a major Midwestern center of automotive assembly.

"The economic opportunities are enormous," said State Representative Peter Barca, a Democrat who represents a district where the Foxconn factory would be built. "The housing industry would blossom. The construction industry would be booming. Virtually every construction company would have a piece of the action."

In July, as Mr. Walker stood in the Santiago Calatrava-designed Milwaukee Art Museum for a local Foxconn announcement that followed an elaborate unveiling of the deal at the White House with President Trump and Paul D. Ryan, the House speaker, he said he was moved to tears when he saw a local television report that showed bar patrons applauding news of the plant. "That's what it's all about," he said.

Some residents of Paris, a tranquil rural community in the southeastern corner of the state that is among the locations being eyed by Foxconn as a possible site, said they welcomed an influx of jobs that Foxconn could bring.

But they said they are blindsided by the way the deal is happening - at lightning speed, with relatively little input from the public and a promise from Mr. Walker that Foxconn can bypass certain regulations protecting the environment.

"Right now I have more questions than answers," said Susan Myres, 45, who sells antiques and farms hay with her husband, Jason. "It sounds like it's going to be a company that will come in and bulldoze everything. How is it going to change the landscape here? It's hard to comprehend."

Under the legislative package being considered in Madison, Foxconn would be exempt from regulations that protect state wetlands and it would be permitted to forego a detailed environmental analysis that is usually required for large projects, moves proponents of the deal say would speed the process. The incentive package for Foxconn was designed to give Wisconsin an advantage in a highly competitive business landscape, with states like Michigan vying for a Foxconn factory within their own borders. Advocates have long complained that the Walker administration has neglected environmental concerns, citing budget cuts to the state Department of Natural Resources.

"Our government is willing to sacrifice things like the environment that are irreplaceable to the people, just for commerce," said Bill Keyes, 71, a retired carpenter, drinking coffee with his wife, Kathy, outside their farmhouse in Paris. "These rules on the environment are hard-won victories, and they're being ignored, like they don't mean anything."

Bill Davis, a chapter director of the Sierra Club, criticized what he called a lack of transparency on Foxconn and the lack of environmental analysis. "From a broad brush, bringing in a manufacturing facility to Wisconsin is fine as long as you do it right," he said. "The things that attract businesses to Wisconsin tend to actually be clean air, clean water, skilled work force. So you don't want to jeopardize those things."

Lawmakers in the Assembly in Madison are expected to vote on the Foxconn bill as early as next week. Mr. Fitzgerald, the Senate leader, said he expected that the legislation would ultimately pass.

Calling the package "an excellent investment for our entire state," Tom Evenson, a spokesman for Mr. Walker, said the governor is "confident the bill will pass the Legislature, given this is a once-in-a-lifetime opportunity that brings high-tech manufacturing back to America, right here in Wisconsin, and adds 13,000 family-supporting jobs."

Under a deal Mr. Walker signed with Terry Gou, the Foxconn chairman, the bill would have to be passed by the end of September. The factory could open as early as 2020.

The Keyeses say that if Foxconn moves in next door, they are moving out, leaving the 20-acre farm they bought in 2003 for its rural idyll: the pond that attracts egrets and herons, the towering wooden barn where they keep their horses and the modest house built when Abraham Lincoln was president.

"When I think about a company coming in and filling in the wetlands," said Mr. Keyes, his voice trailing off. "Nobody should be allowed to do that. It's wrong."

But Ronald Kammerzelt, a supervisor for the town of Paris, said he has been hoping for years that the region would see an economic rebirth. Foxconn is "on a totally different level" than other companies that have come so far. "At first glance," he said, "it sounds like it would be good for the area in terms of providing living-wage jobs."

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Questions Emerge Over What Wisconsin Must Give for Foxconn Plant

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The Foxconn project has drawn attention far beyond Wisconsin. For Foxconn, the Taiwanese supplier for Apple and other major tech companies and the world's largest contract electronics manufacturer, it would be its first major American factory. The company, based in Taiwan, employs about one million people worldwide, mostly at its sprawling factories in China.

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Governor Scott Walker signs $3 billion deal with Foxconn

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Governor Scott Walker signs $3 billion deal with Foxconn

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Wisconsin's Foxconn deal is a go.

On Monday, Gov. Scott Walker approved $3 billion in incentives for the Taiwanese electronics manufacturer to build a new plant in the state. The hefty gift, which was first announced in July, was hotly debated by state legislators before they gave their approval last week.

"We are honored Foxconn chose Wisconsin, and I'm grateful to [Foxconn CEO] Terry Gou and the members of both parties in the Legislature for all they have done to make this historic event a reality," Walker, a Republican, said in a statement.

Foxconn has pledged to invest $10 billion to build a factory that makes LCD screens. The facility is expected to create between 3,000 and 13,000 new jobs and should be up and running by 2020.

The deal has been touted by President Donald Trump, who has referred to Gou as "one of the great businessmen anywhere in the world."

But in Wisconsin, the agreement's price tag has made it controversial.

Related: Wisconsin's handout to lure Foxconn is contentious

The annual payout to Foxconn will be between $200 million and $250 million, according to the Wisconsin Economic Development Corporation.

That means the state will pay between $15,000 and $19,000 dollars per job per year, assuming 13,000 positions are actually created.

The incentives include up to $1.5 billion in state income tax credits for job creation, up to $1.35 billion in state income tax credits for capital investment and up $150 million for the sales and use tax exemption, according to the development agency.

The typical deal would be closer to $2,400 per job per year, according to Timothy Bartik, an economist at the W.E. Upjohn Institute for Employment Research.

"[Foxconn is] looking to automate. They're looking to make money. Let's not get lost in the excitement of it," state Sen. Chris Larson, a Democrat, told fellow lawmakers last week.

Ultimately, the Republican-controlled legislature gave its okay. The deal even garnered support from some Democrats.

"Today Wisconsin is officially saying yes to a $10 billion development project, 13,000 careers and new opportunities throughout Wisconsin," Robin Vos, the state Assembly's top Republican, said in a press release. "This law allows the state to move forward on the largest economic development project in state history."

Up next: the Wisconsin Economic Development Corporation will negotiate a final contract with Foxconn within the parameters set by the legislation. But the hardest work is done.

The agency hopes to have a contract in hand by the time its board of directors meets on Sept. 28.

In a statement, Foxconn said, "We greatly appreciate Governor Scott Walker's efforts to help us move forward with our plans to build the state-of-the-art advanced display manufacturing campus in Southeastern Wisconsin."

CNNMoney (New York) First published September 18, 2017: 7:12 PM ET

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It's official: Foxconn will get $3 billion to build a plant in Wisconsin

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On Monday, Gov. Scott Walker approved $3 billion in incentives for the Taiwanese electronics manufacturer to build a new plant in the state. The hefty gift, which was first announced in July, was hotly debated by state legislators before they gave their approval last week.

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WEBVTT MIKE: TODAY ON"UPFRONT,"CONTROVERSY OVERTHE FOXCONN CONTRACT. SHOULDDETAILS OF THECONTRACT BE MADEPUBLIC BEFORE ANIMPORTANT VOTE? I'LLASK DEMOCRATICSTATE SENATOR TICARPENTER, NEXT ON"UPFRONT." THEN, THEVIEW FROM REPUBLICAN SENATE MAJORITY LEADER SCOTT FITZGERALD. LAWMAKERS' FALL AGENDA, AND ARE THE TWO CHAMBEGETTING ALONG?PLUS, INSIDEMILWAUKEE'S SHOWSTOPPINGDOWNTOWN ARENA. THE LATEST ON NAMING RIGHTS, ANDTHE RETURN ON INVESTMENT FORTAXPAYERS. IT'S MYCONVERSATION WITH MILWAUKEE BUCKS PRESIDENT, PETERFEIGINCOVERING THE ISSUES IMPORTANT TO WISCONSIN, THIS IS "UPFRONT WITH MIKE GOUSHA." MIKE: HELLO AGAIEVERYONE, AND WELCOME TO"UPFRONT." WE BEGIN TODAY WITH THE DEAL TO BRING FOXCONNTO WISCONSIN. DEMOCRATIC STATELAWMAKERS ARE NOCALLING FOR DETAILS OF THE FINAL DEAL TOBE MADE PUBLICBEFORE IT'S VOTED ON BY MEMBERS OFTHE WISCONSIN ECONOMICDEVELOPMENT CORPORATION BOARD.A VOTE ON THE CONTRACT WASDELAYED RECENTLYBECAUSE OF AUNSPECIFIED ISSUE WITH IT. THE VOTE ISNOW SCHEDULED FOR NOVEMBER 8. BUT, IN THE DAYS LEADING UP TO THAT VOTE, DEMOCRATS ARE RAISING ISSUES WITH THE PROCESS.JOINING US TODAY IS DEMOCRATICSENATOR TIM CARPENTER OFMILWAUKEE, WHO IS MEMBER OF THE WISCONSIN ECONOMICDEVELOPMENT CORPORATION BOARD.SENATOR, THANKS FOR JOINING USTODAY. GOOD TO HAVYOU BACK ON THE PROGRAM.WHAT IS YOUR PRIMARYCONCERN? SEN. CARPENTER: I WANT TOBE ABLE TO READ THE CONTRACT AND DO THE RIGHT JOB FOR THE TAXPAYERS TOMAKE SURE THE FOXCONN IS GOINGTHROUGH THAT IT'S GOING TOHAPPEN, BUT IT SHOULDN'TSTOP US FROM TAKING THTIME TO REVIEW THEDOCUMENT AND MAKE SUTHE TAXPAYERS ARE PROTECTED AND THAT'S WHYTHE VOTE WAS DELAYED. ITWAS A RUSHED PROCESS. THERE WERE MANY CONCERNS. IT HAD A NUCLEBOMB IN IT, AS FAR AS I'M CONCERNED. THE FOLKSPULLED BACK AND SAID WE CAN'T DO THIS CONTRACT LIKE THIS. MIKE: I WAS STRUBY SOMETHING YOU SAID ATTHE BEGINNING OF TANSWER. I WANT TO READ THECONTRACT. OF COURSE, YARE ON THE BOARD, YOU WILLREAD THE CONTRACT. YOU WILL READ A SUMMARY OF THE DEAL? SECARPENTER: THAT ISCORRECT. BASICALLY, THE LAACT 58 WAS PASSED. THESTAFF SUMMARIZE THE CONTRACT. I WANT TO BE ABLE TO MAKE SURE THEIRINTERPRETATION IS RIGHT. IWANT TO BE ABLE TO READ THE CONTRACT. NOT FROM AN ATTORNEY. I WANT TO MASURE THERE ARE CONCERNPROTECTING THE TAXPAYERS, MAKING SURE WE WONLOSE TENS OF MILLIONS OFDOLLARS. MIKE: YOU HAVE SAID THE CONTRACT IS WHAT -- IT WAS 38 PAGES? SECARPENTER: IT WAS ABOUT 38 PAGES. THE FIRST DRAFT HAD A HIGHLYINACCURATE MAP OF THZONES. IT SEEMED RUSHED.WE DIDN'T GET ADVANCNOTICE OF WHAT MATERIALSWERE THERE. I DON'T UNDERSTAND, BOTHDEMOCRATS AND REPUBLICANS VOTED FOR AND AGAINST THE BILL, BUT WE ALL WANT TO MAKE YOURTHE TAXPAYERS ARE PROTECTED TO MAKE SUTHE MONEY IS WELL SPENT.WE HAD A COUNTY PENSION SCANDAL. I DON'T WANT A REPEAT OF THAT ON THE STATE LEVEL. I WANT THIS TO WORKAND I WANT TO PROTECTAXPAYERS. MIKE: IN THE DAYS LEADING UP TO THEORIGINALLY SCHEDULED VOTE,HOW MANY VERSIONS OF THIS SUMMARY DID YOU HAVEPRESENTED TO YOU? SECARPENTER: THEREWERE THREE DIFFERENTVERSIONS. ONE WAS FRIDAYTHE 13TH AT 8:00 AT NIGHT.STUDIED THAT ONE ON MONDAY MORNING. GOT ANOTHER REVISED CONTRACTAT 2:00 ON MONDAY. AFTERGOT HOME, ANOTHER CONTRACT MONDAY AT 5:30 AND WE WERE SUPPOSED TO START VOTING ON IT AT 10:00 IN THE MORNING. THAT IS A SUMMARY. I FELT VERYUNCOMFORTABLE TO BE ABLETO SAY YES, I SUPPORT THISAND NOT HAVING THEDETAILS. MIKE: ARE YOULEANING TOWARD SUPPORTING IT? SEN. CARPENTER: INCERTAIN WAYS, IF THERE APROTECTIONS AND I CAN BEGUARANTEED OF THE PROTECTIONS FOR TAXPAYERS,I THINK IT WOULD BE A WONDERFUL DEAL. IF THIS GOES IN SOUTH, IT MEANS ONE LESS DOLLAR FOR TRANSPORTATION, FOR HEALCARE, FOR EDUCATION. IF ARE GOING TO SPEND THEMONEY, WE HAVE TO SPENIT RIGHT. MIKE: THERE ARE SOME WHO WOULD ARGUETHAT SHOWS THERE'S DUEDILIGENCE BEING DOHERE. THE PROCESS ISWORKING BECAUSE THE VOTEDIDN'T OCCUR. THEY NEEDED MORE TIME TO LOOK AT ISEN. CARPENTER: ITDOESN'T MATTER HOW WE GET THERE, IT'S JUST IF WEGET IT RIGHT. I'M GLAD IT WAS DELAYED. I WANT TO TAKE THE TIME UP TO NOVEMBE8 TO MAKE SURE I CAN SEETHE CONTRACT, I HAVECHANCE TO REVIEW IT, I CANGO THROUGH AND TALK WITHEXPERTS AND SEE WHAT ITHERE WITHOUT GIVING OUTTHE DETAILS THAT APROPRIETARY INFORMATION.MIKE: HOW MUCH OF THISIS JUST POLITICS WHERE TIMCARPENTER IS A DEMOCRAT ON THE BOARD, HE WILL RAISE A STINK ABOUT THIS BECAUDEMOCRATS DON'T LIKE THEDEAL? SEN.CARPENTER: I HAVEN'TFOUND A PERSON YET WHO'SSAID GO AHEAD AND VOTEON IT WITHOUT SEEING TCONTRACT. IT WILL PASS, FOXCONN WILL BE GETTING A CONTRACT, BUT WHY NOT DOIT RIGHT AND WHY NOT HAVE EXTRA EYES LOOKING AT IT? MIKE: GOOD TO HAVE YON THE PROGRAM TODAY. COMING UP, WHAT TOP REPUBLICAN SAYS ABOUT THE FOXCONN CONTRACONTROVERSY. PLUS,AFTER THE ASSEMBLYSPEAKER ACCUSED REPUBLICSENATORS OF HOLDING THE BUDGETHOSTAGE, CALLINGTHEM TERRORISTS,ARE THE LEGISLATURE'S TWO HOUSES GETTINGALONG? I'LL BE ASKING SENATE MAJORITY LEADER SCOFITZGERALD, NEXT ON "UPFRONT." MIKE:WELCOME BACK TO "UPFRONT." THEY'

State Sen. Tim Carpenter, D-Milwaukee, says the process surrounding the state's contract with Foxconn is being rushed, and that he and other Wisconsin Economic Development Corporation (WEDC) board members need time to study the document before voting on it to "get it right."

"I want to be able to read the contract. I want to be able to do the right job for the taxpayers," Carpenter said Sunday on "UPFRONT with Mike Gousha," produced in partnership with Wispolitics.com.

The WEDC board's first scheduled vote on the contract was delayed after staff found an undisclosed problem in it. The vote is now scheduled for Nov. 8.

Carpenter said he has been given summaries of the document, rather than the actual contract. He said some of the information has been inaccurate, and multiple summaries were sent just days or hours before the first scheduled vote.

"It was a rushed process, there are many concerns, and it had a nuclear bomb in it as far as I'm concerned," Carpenter said of the earlier version of the contract. which had a problem he felt would have left taxpayers exposed.

"To feel comfortable voting, I want to make sure that there are concerns protecting the taxpayers, claw back the money, making sure we're not going to lose tens of millions or possibly billions of dollars," he said.

Also on the program, Senate Majority Leader Scott Fitzgerald, R-Juneau, said the WEDC and the administration are currently doing the "heavy lifting" on the contract after the Foxconn bill was passed and signed in September.

Fitzgerald said the WEDC is "making sure that we've got everything buttoned down."

"I think that's wise," he said. "I think it's good that we have both majority and minority members of the legislature on WEDC asking tough questions. I think that should happen right up until the contract is signed."

Gousha asked if full details of the contract should be made public before the Nov. 8 vote. Fitzgerald said he agreed "up to a practical point."

"For the most part, we need to know what the major pieces are before we move forward," he said.

On the fall legislative agenda, Fitzgerald said he expects mineral mining legislation to move forward.

"We're still working on the votes in the Senate," he said, adding that he was optimistic the mining bill would pass.

Fitzgerald also addressed comments from Assembly Speaker Robin Vos on "UPFRONT" that three Republican senators were "terrorists" for holding the budget "hostage."

"I disagreed with him on the idea that anybody held anybody hostage in this process," he said

The process of passing a budget and then lobbying the governor for changes is "as old as the Capitol," he said.

"I think he was a little bit miffed in the way that was handled in the Senate," he said. "That process can always be revisited."

"We're OK, we're in a good place," he said of the relationship between the two chambers. "There's a lot of things that we're working on together that ultimately will make it to the governor's desk."

In another segment, Peter Feigin, president of the Milwaukee Bucks, said the team's new downtown arena is more than 60 percent complete and on budget and schedule.

Feigin said it would be hard for the team to "compete in the NBA at a high level" without the arena.

He also said the team is looking for a "landmark" deal for naming rights.

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'UPFRONT' recap: State senator concerned Foxconn contract being rushed

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Hide Transcript Show Transcript WEBVTT MIKE: TODAY ON"UPFRONT,"CONTROVERSY OVERTHE FOXCONN CONTRACT. SHOULDDETAILS OF THECONTRACT BE MADEPUBLIC BEFORE ANIMPORTANT VOTE? I'LLASK DEMOCRATICSTATE SENATOR TICARPENTER, NEXT ON"UPFRONT." THEN, THEVIEW FROM REPUBLICAN SENATE MAJORITY LEADER SCOTT FITZGERALD. LAWMAKERS' FALL AGENDA, AND ARE THE TWO CHAMBEGETTING ALONG?PLUS, INSIDEMILWAUKEE'S SHOWSTOPPINGDOWNTOWN ARENA.

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The company did not identify exactly where the plant would be built but said it would be in Mr. Ryan's district in southeastern Wisconsin. Mr. Walker said that Foxconn would receive $3 billion in tax breaks and other subsidies over the next 15 years from the state.

Like Mr. Trump's visits to a Carrier factory in Indianapolis in December and Snap-on's tool plant in Kenosha, Wis. in April, the White House event on Wednesday was as much a campaign-style rally as an economic announcement.

"This is a great day today for American manufacturing and American workers and for everybody who believes in the concept, in the label, Made in the U.S.A.," he said. Mr. Gou, Mr. Trump said, "joins a growing list of industry leaders who understand America's capabilities are limitless."

"I'd see Terry and say, 'You've got to give us one of these massive places,'" Mr. Trump said. "If I didn't get elected, he definitely wouldn't be spending $10 billion."

Mr. Trump hailed the Foxconn project as the latest sign that his efforts to promote advanced manufacturing in this country were succeeding.

In February, Brian Krzanich, Intel's chief executive, joined Mr. Trump at the White House to announce that the company would invest $7 billion to finish a computer-chip factory in Arizona and add 3,000 jobs.

And Mr. Trump said Tuesday that Apple had promised to build three large plants in the United States. The company, which owns only one factory anywhere, declined to comment on whether such promises had been made.

Most of Apple's iPhones are built by Foxconn in China, and Apple has said in the past that it would be very difficult to move that work to the United States.

Mr. Gou said in January that Foxconn, the world's largest contract electronics manufacturer, was considering investing more than $7 billion in the United States, and potentially adding 30,000 to 50,000 jobs.

Foxconn's announcement could yield significant political benefits for the company and for the White House. Although based in Taiwan, much of the company's production is done in China, and Mr. Trump has singled out Beijing's trade practices for attacks.

Mr. Walker said Foxconn's investment could indirectly result in an additional 22,000 new jobs, with its planned 20-million-square-foot complex occupying a footprint three times the size of the Pentagon.

Even if the project did ultimately produce 25,000 new jobs, it would be a tiny fraction of the total number of jobs the United States economy has added during the most recent recovery. In the first half of 2017, for instance, the economy added a monthly average of 180,000 jobs; the manufacturing sector alone gained 41,000 jobs overall in that six-month period.

Wisconsin was among the states in the Midwest that helped tip the election to Mr. Trump in November. At 3.1 percent, its unemployment rate is well below the national average of 4.4 percent, but the loss of relatively high-paying, blue-collar jobs has taken a toll in many parts of the state.

Both Mr. Ryan and Mr. Walker are influential national figures in the Republican party, adding to Wisconsin's appeal for Foxconn.

Known formally as Hon Hai Precision Industry Co., Foxconn is the world's largest contract electronics manufacturer. It has promised to invest in the United States before, most notably a $30 million, 500-worker plant in Pennsylvania that was never built.

That history left some experts skeptical of the company's latest commitment, and of the White House's eagerness to claim credit for a major economic victory.

"I'll be excited about the Foxconn announcement when workers are getting paychecks in Wisconsin," said Scott Paul, president of the Alliance for American Manufacturing, a nonprofit partnership of domestic manufacturers and the United Steelworkers union. "Foxconn has a history of talking big and not necessarily delivering on their commitments."

Still, Mr. Paul said, "I do hope this is built and there are tons of jobs." He noted that makers of consumer electronics long ago left the United States for Asia, even as factories making heavy goods like cars, jet engines and steel managed to hang on in this country.

"Over and over, we've heard the excuse that consumer electronics can't be brought back," Mr. Paul said. "I do hope this succeeds because it shows these sourcing decisions are more about choices than capabilities. There's very little electronic display production in the United States now."

Andy Tsay, a business professor at Santa Clara University who has studied where companies build factories, said that a new Foxconn plant could make sense given the products it will be making.

"A flat-panel display is not a small thing, with today's TVs; it's certainly not inexpensive to ship," he said. "Building close to where the customers are makes sense for a product like that."

Mr. Gou has been opportunistic about opening factories to meet the broader aims of his business.

Professor Tsay said that when Foxconn won its first order to make desktop computer chassis for Dell, the computer maker insisted that production occur in the United States. So Mr. Gou bought a company in Kansas City to do it.

Although the right combination of factors can make manufacturing feasible anywhere, Mr. Tsay said he doubted Apple planned to build factories in the United States, as Mr. Trump suggested this week, unless it decided to build a large product such as a car.

Correction: August 2, 2017

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Foxconn Says It Plans to Build Factory in Wisconsin, Adding 3,000 Jobs

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The company did not identify exactly where the plant would be built but said it would be in Mr. Ryan's district in southeastern Wisconsin. Mr. Walker said that Foxconn would receive $3 billion in tax breaks and other subsidies over the next 15 years from the state.

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Things to Know About Foxconn Plant Coming to Wisconsin

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Things to Know About Foxconn Plant Coming to Wisconsin

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BURLINGTON - Racine County's Foxconn information session at Veterans Terrace on Tuesday was busy.

"This is huge," said Burlington Mayor Jeannie Hefty. "You can see the parking lot is so jammed now with cars from people turning out for this."

Burlington is about a half-hour drive from the future site of Foxconn, which is expected to employ thousands of workers. Hefty said she and other city officials are watching the Mount Pleasant development and trying to plan ahead so they can take advantage of it.

"We actually are a little bit ahead of the curve," she said. "I've been asked by three different levels of government, 'Is Burlington ready for this?' and I think we are."

Debbie Davidson, vice president of Workforce and Economic Development at Gateway Technical College, said that with computer numerical control (commonly known as CNC) and other manufacturing certifications available at the Elkhorn and Sturtevant campuses, Burlington residents can prepare for the job opportunities brought by Foxconn.

"So they can train for these jobs and find good-paying jobs that are going to be worth their commuting time," said Davidson. "(Burlington) is not that far from where this will be."

Racine County Economic Development Corp. (RCEDC) Business Development Manager Laura Million said that in addition to job opportunities for Burlington residents, RCEDC is anticipating the project will create new opportunities for local businesses or new businesses to the area who want to be part of Foxconn's supply chain.

Infrastructure

The city may also see some infrastructural benefits further down the line. Wisconsin Department of Transportation Southeast Region Director Brett Wallace said that right now the DOT is working to make sure Interstate 94 and other roads in immediate proximity to the site are ready for the increased traffic. But many Burlington residents on Tuesday asked him about Highway 11.

"What we've told folks is that we're very early," he said. "Over the (next) six months to 12 months, we will be detailing out what the improvements are that are necessary on Highway 11."

Hefty said the city has been discussing expanding its business and industrial parks to attract new businesses. City officials are also considering developing some of those areas for residential sites.

"I know Burlington is one of the cities that is targeted for some (Foxconn employees) to get away from the city area of Racine and move this way," she said.

Million said she sees the Foxconn development as an opportunity for Racine County and cities such as Burlington to tell the story of their community.

"Burlington's been working very diligently on looking at redevelopment and trying to reinvigorate their downtown," said Million. "So there's the opportunity to recast and tell the story about Burlington and get those individual storefronts filled. It's a new opportunity to tell their story and bring new people into the community."

Hefty said the population increase could give Burlington an economic boost.

"We've been kind of stagnant around 10,000, 10,500 (population) for quite a while," she said. "Any time you can get people in good jobs and just keep the economy moving, it's good for everybody."

Still early

Hefty is aware there are still a lot of unknowns. As an RCEDC board member, Hefty said she's also keeping an eye on the project as it develops.

"We have to be careful, too, as a community ... and just see what's going to really happen," said Hefty. "There are all moving parts right now that are coming together. But we are on it and watching it and being involved in it."

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racine county economic development corporation

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BURLINGTON - Racine County's Foxconn information session at Veterans Terrace on Tuesday was busy. "This is huge," said Burlington Mayor Jeannie Hefty. "You can see the parking lot is so jammed now with cars from people turning out for this." Burlington is about a half-hour drive from the future site of Foxconn, which is expected to employ thousands of workers.

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In Mount Pleasant, a proposed flat-screen plant could trigger explosive growth, adding $1.4 billion of tax base to a village in which all the properties added up to just $2.5 billion last year.

The village and Racine County could win outsized rewards by investing $764 million to help Foxconn Technology Group of Taiwan turn farm fields into one of the world's largest manufacturing campuses.

But the complex project also brings revolution and risk, as local governments borrow for and build everything from sidewalks to sewers, streets and fiber optic cable lines.

The local agreement with Foxconn provides an unusual series of safeguards against failure - from guaranteed property tax payments by the company to a big financial cushion, land held as collateral by taxpayers and triggers to block incentives for Foxconn if the deal is going badly.

"It's more protected from loss than any (such deal) that I've seen," said Dale Knapp, a research director for the Wisconsin Taxpayers Alliance who reviewed the 39-page plan.

But at least some risk remains for local residents, if only because the massive size of the 25-year deal means that its collapse could prove catastrophic. Standing behind them will be state taxpayers, who could be on the hook for as much $199 million of this local obligation if the deal doesn't perform as expected.

Alan Marcuvitz, general counsel to the village of 26,000 people, says he has helped craft an agreement in which that won't happen.

"This is something that under the best of circumstances will be absolutely wonderful and under the worst of circumstances won't be terrible," said Marcuvitz, who has spent decades working on similar agreements.

This local deal comes in addition to the state's separate and so far more controversial package for Foxconn, under which taxpayers could provide the company with up to $3 billion in subsidies if targets are met. The state and local incentives - nearly $3.8 billion together - are unlike anything ever seen in Wisconsin.

"I don't think anyone has ever worked on a project of this magnitude," Marcuvitz said.

The factory, too, is exceptional. Up to 13,000 people could find Foxconn jobs turning out liquid crystal displays in a complex the size of 11 Lambeau Fields.

RELATED: Marquette University to host Foxconn technology showcase and recruitment event

RELATED: Foxconn hires former Navy pilot as its first Wisconsin employee

But first village and county officials have to reach a series of final agreements among themselves and with Foxconn and then approve them. Those steps come with a number of public meetings to explain the deal, including a 4:30 p.m. session Wednesday at the Mount Pleasant Village Hall and a 5 p.m. Thursday meeting at Memorial Hall in Racine.

Under the tax incremental financing deal,Mount Pleasant and Racine County would borrow a total of $285 million to buy land and build a sweeping array of infrastructure for the Foxconn development. Then they would use the property taxes on the new complex to pay off the loans.

To show just how big that borrowing is, the village's budget for its day-to-day operations is barely $15 million this year. But the deal contains a number of protections:

A guarantee that from 2022 to 2049, Foxconn will pay property taxes as if it has a factory assessed at a value of $1.4 billion, even if the real assessment of the complex comes in below that. At today's tax rate, that comes out to just over $31 million a year, and if the plant turns out to be worth more, then the company will pay more. This helps respond to concerns that Foxconn has promised but not delivered on big investments in other places such as Brazil and Pennsylvania.

The ability - unusual in a deal of this type - for the village to use $100 million of the taxes from Foxconn to pay for additional police officers and firefighters through 2043. An additional $8 million could be used for public safety investments such as a police or fire station.

A financial cushion of $195 million between the money that the local governments are expected to take in from the deal and their projected costs.

A parcel of nearly 1,100 acres that would be purchased for about $60 million by the company but owned by the local governments as a hedge in case the deal goes badly. If the project goes well, Foxconn would eventually get the land and suppliers or other companies could locate there, paying taxes that would help retire the local debts more quickly.

Including the reimbursement to Foxconn for this parcel, the deal includes up to $234 million worth of incentives that the company receives only if the local debts are being paid off as expected.If not, the company wouldn't get as much or any of these sweeteners.

In a worst-case scenario, local taxpayers could potentially end up with the Foxconn plant and its nearly 1,200-acre site and could attempt to market it in some way.

Unveiling the package last week, Racine County Executive Jonathan Delagrave said it protects homeowners in his county from paying higher property taxes to subsidize the project.

"Our estimations are very conservative. We feel like first and foremost when we formed the (incentive package) that taxpayer protection was of the utmost importance," Delagrave said.

Knapp, the Taxpayers Alliance analyst, said he was impressed by the thought that went into the protections. But he noted that Foxconn's $1.4 billion guarantee is dependent on the company remaining viable for decades to come.

Right now, Foxconn is tied with Amazon.com as the world's third-largest technology company. But within the marketplace for digital devices, a lot can change in just a few years, let alone two decades.

"That risk is to some degree inherent in any (such deal)," Knapp said. "That is always there, but it's amplified here because it is one company and because of the (project) size."
Journal Sentinel reporter Rick Romell contributed to this article.
Read or Share this story: https://jsonl.in/2ySHUGe

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Foxconn growth could be staggering, but risks are real for Racine County, Wisconsin

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In Mount Pleasant, a proposed flat-screen plant could trigger explosive growth, adding $1.4 billion of tax base to a village in which all the properties added up to just $2.5 billion last year. The village and Racine County could win outsized rewards by investing $764 million to help Foxconn Technology Group of Taiwan turn farm fields into one of the world's largest manufacturing campuses.