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Foxconn chairman Terry Gou at the Milwaukee Art Museum

FOXCONN TECHNOLOGY GROUP Taiwan Contract manufacturing NOTABLE PRODUCTS: iPhone, iPad, Nintendo 3DS, PlayStation, Wii U, Xbox FOUNDER: Terry Gou (chairman) FOUNDED: 1974 EMPLOYEES: More than 1 million 2016 NET PROFIT: $4.9 billion 2016 REVENUE: $144.6 billion HEADQUARTERS: INDUSTRY:

PURCHASED SHARP IN 2016

FOR $3.5 BILLION

The deal is remarkable for its size, but also for its speed. It was just 90 days from Walker’s first meeting with Foxconn chairman Terry Gou to the White House announcement. During those three months, the governor and the chairman developed a relationship those involved describe as a key reason the technology giant chose Wisconsin. They also put together a deal they believe will transform the state’s economy for decades to come. The Taiwanese multinational electronics contract manufacturer, which makes products including the iPad, iPhone and Xbox, is to create 13,000 jobs and invest $10 billion in a liquid-crystal display 20 / BizTimes Milwaukee AUGUST 21, 2017

(LCD) panel manufacturing campus over a six-year period in exchange for $3 billion in tax incentives from the state. Gou and Walker say the complex will initially have at least 3,000 jobs and grow from there. The incentive package is contingent on hiring and capital investment. That level of incentive is unheard of in Wisconsin. For perspective, the Wisconsin Economic Development Corp. has awarded a total of $1.73 billion in tax credits, grants and loans since it was formed in 2011. The size of the incentive for Foxconn has raised some concerns. It will take 25 years for the state to recoup its investment in Foxconn, according to the Legislative Fiscal Bureau. “The $3 billion subsidy is one of the highest given to any company by any state,” said Marquette University economics professor Abdur Chowdhury. “Foxconn was successful in playing one state against another and squeezing as much subsidy as possible. Any future company coming to Wisconsin will use this precedent to get as much tax and other benefits from the state as possible. “Foxconn is no doubt a big investment and could be a game changer. (But) despite the hype,

Foxconn’s investment in Wisconsin does carry some downside risks.” If Foxconn lives up to the hype, it could put Wisconsin on the map globally with the first LCD flat panel display factory in the United States. The project is expected to generate another 11,500 jobs at Foxconn suppliers and almost 10,800 jobs at businesses selling to employees, according to an EY report commissioned by the company. Foxconn could spark the creation of an ecosystem of companies and economic growth that draw people from around the country and around the world, Walker says. The state would evolve from a heritage of bending metal and brewing beer to a focus on the leading edge of electronics technology. Walker is calling the ecosystem that will develop from the presence of Foxconn’s complex “Wisconn Valley,” predicting an impact on the state akin to Silicon Valley in California. Tech workers flock to Silicon Valley for the abundance of job opportunities there. Supporters of the state’s deal with Foxconn say the same thing could happen in Wisconsin. “This is an international play to get workforce here,” said Mark Hogan, secretary and chief executive officer of the WEDC. If Foxconn becomes an economic magnet that draws people to Wisconsin, reversing decades of trends toward net outmigration, businesses in the

Profile for BizTimes Media

BizTimes Milwaukee | August 21, 2017  

The hype and hope of Wisconn Valley | Smarter buildings on the rise | Adding privacy to the open concept office | Northwestern Mutual Tower...

BizTimes Milwaukee | August 21, 2017  

The hype and hope of Wisconn Valley | Smarter buildings on the rise | Adding privacy to the open concept office | Northwestern Mutual Tower...