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Wisconsin economic development head defends Foxconn contract

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MADISON, Wis. (AP) — The head of Wisconsin’s economic development agency on Tuesday defended the state’s contract with Foxconn Technology Group, even as the deal is being renegotiated amid concerns by Gov. Tony Evers that the benefits for the Taiwan-based company are too high.

“We have a solid contract with the company,” Wisconsin Economic Development Corporation CEO Mark Hogan told reporters after testifying at a state Senate committee hearing. During the hearing, and again with reporters, Hogan declined to talk in detail about what elements of the deal are being renegotiated.

Hogan negotiated the contract signed by Foxconn in 2017 under a deal pursued by then-Gov. Scott Walker. Under the deal, Foxconn can receive about $3 billion in state tax credits if it employs 13,000 people and spends about $9 billion on a display screen manufacturing campus in southeast Wisconsin. With local incentives, the value of the deal to Foxconn exceeds $4 billion, the largest government subsidy to a foreign corporation in U.S. history.

President Donald Trump has heralded the project as the “eighth wonder of the world” and came to Wisconsin last summer for the groundbreaking.

But Foxconn missed its hiring minimum to receive job tax credits in 2018 and has scaled back the size of the factory it plans to build near Racine. Evers, a Democrat, campaigned against the Republican Walker as a critic of the Foxconn deal, saying taxpayers were on the hook for too much money and the deal needed to be renegotiated.

Last week, Evers confirmed that talks were underway to revise the contract but he’s given few details about what may change. Republican legislative leaders criticized Evers for the move, saying he was undermining the deal.

Hogan on Tuesday wouldn’t say what changes Foxconn might be seeking to the contract or whether he thought it should be reworked.

Evers said last week it was unrealistic to think Foxconn would employ 13,000 people as it originally promised, given that the size of the factory had been reduced, and the contract may have to be updated to reflect the smaller scale of the project.

Hogan emphasized that the contract awards most of its credits to Foxconn only after the company meets hiring and capital investment benchmarks.

“The value of the contract is the contract is scalable,” Hogan said. “If they spent $6 billion and they employed 6,000 people, 7,000 people, the contract scales to that. … It’s a pay-for-performance basis.”

Hogan, in a break from Evers, also suggested that the 13,000 employment target was still within reach.

“They continue to make that commitment,” Hogan said of Foxconn.

Hogan also defended how much he’s kept Republican legislative leaders informed about contract talks with Foxconn. The project is located in the district of Assembly Speaker Robin Vos, one of Foxconn’s most vocal supporters.

“I keep people informed,” Hogan said. “That’s what I do, all right? Whether it’s the governor’s office, legislative leaders, our board of directors, I keep people informed of what’s going on.”

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