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WEDC CEO: Foxconn contract renegotiations ‘up in the air’

WEDC CEO: Foxconn contract renegotiations ‘up in the air’

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MADISON, Wis. (CBS 58) – In a wide-ranging interview, Melissa ‘Missy’ Hughes, the new CEO of the Wisconsin Economic Development Corporation, told CBS 58 that the Evers administration is, “absolutely” rooting for Foxconn’s success and that the state is ready to help the company achieve its goals.

Hughes took over the position in 2019 following the departure of her predecessor, Mark Hogan. The former Organic Valley executive inherited the Foxconn project and hit the ground running when it came to the development.

“My goal is to come in and understand it,” Hughes said in an interview with CBS 58 at WEDC’s Madison headquarters. “To learn what Foxconn’s vision is and to help them as their business plans evolve, to make sure that the project and the contract that WEDC is responsible for are all aligned and working together.”

The plans for what Foxconn will eventually develop at its Mount Pleasant site have changed since President Donald Trump announced the project in July 2017. Details like the size of the plant, what will be built and what kinds of jobs will be available have all shifted.

While the Taiwanese company says those details have changed because of shifts in market demands, it has maintained that it will create 13,000 jobs and has reaffirmed its commitment to the state.

“They’ve been pretty open about saying their business plans have evolved,” Hughes said.

The evolution has led to the Evers administration urging the company to renegotiate the contract it has with the state, something that WEDC is tasked with managing.

But when asked if Foxconn has established a timeline over when those renegotiations may happen, Hughes replied, “It’s up in the air.”

She added, “We stand ready to work with them, when they’re ready to do that.”

Foxconn did not meet required benchmarks in job creation in 2018 to receive tax credits and it’s still to be determined if that will be the case for 2019.

In a statement to CBS 58, Foxconn said it is, “proud to have hired hundreds of hardworking employees over the last year while investing millions of dollars in the State of Wisconsin. The company regularly communicates with the State regarding Foxconn’s commitment to bring substantial impact to Wisconsin’s economy, workforce, and educational institutions.”

It goes on to say, “as outlined in Foxconn’s agreement with WEDC, the company will be disclosing figures regarding capital investment and employee hiring numbers in 2020. Foxconn will continue to comply with the reporting requirements as prescribed in the agreement for employees hired and capital expenditures during the 2019 reporting year."

Hughes is optimistic about the state’s future with Foxconn and adds that the state and its taxpayers have learned a lot through the process.

“Without Foxconn I don’t think anybody in Wisconsin would really be as aware of what tax incentives are.”

Opportunities with the 2020 DNC

The 2020 DNC in Milwaukee places a national spotlight on the city and state, an opportunity Hughes says can be huge for its economy.

“It’s our chance to put our best foot forward,” Hughes said. “It’s also our chance to really tell our story about what’s happening in Wisconsin especially with regard to business.”

Governor Tony Evers has discussed how the DNC is a once-in-a-generation opportunity to attract new residents and talent to the state. Hughes wants to do the same with attracting businesses and says she has a simple, but powerful pitch for why businesses should invest in the state.

“The most valuable resource that Wisconsin has [is] its people,” Hughes said. “The communities that our citizens create and the quality of life for raising families and for running your business with super hard working people and innovation, it’s our best resource.”

Minority business growth

When it comes to boosting minority business and entrepreneurship growth in the state, Hughes points to examples like the Sherman Phoenix project in Milwaukee for how WEDC is working to improve in this area.

“We have to be conscious that we are making sure that everybody in Wisconsin knows about our programs and is able to access them. One of my challenges is to go back and look at our programs and make sure we haven’t unintentionally put up obstacles to those communities and maybe there’s deeper ways we can dig in and help entrepreneurs and start-ups.”

Audit concerns

Recent audits of WEDC found issues with how it distributed tax credits to companies, specifically with some that got job creation tax credits for jobs that were never created. Hughes says the agency is addressing those concerns.

“There has been a lot of improvement,” Hughes told CBS 58. “I think there’s always the opportunity to continuously improve. I think one thing to remember is the basis of WEDC as a public-private entity is to keep flexibility. So our challenge is to respond to things that are raised and also remember that keeping flexibility and being able to respond to the realities of the market place is what the taxpayers have hired us to do.”

Relationships with Evers, Vos and Fitzgerald

While WEDC is a public-private entity, it requires working closely with the state government. Hughes says her relationship with Governor Evers is very positive.

“[It’s] really, very great,” Hughes said. “He is such a gentle soul. I really appreciate listening to him and I’ve been able to do a few visits around the state with him and so I can hear about what he’s concerned about. He’s so concerned about people and quality of life and education and health care. Those fundamental pieces, he wants to make sure everyone in Wisconsin has the opportunity to be solid in those things.”

Hughes was also asked about her relationship with the leaders of the Republican-controlled legislature, Assembly Speaker Robin Vos and Senate Majority Leader Scott Fitzgerald. During the Lame Duck session in 2018, the GOP pushed through legislation that prevented Gov. Evers from appointing a WEDC CEO until September of 2019. But Hughes says she’s been able to develop a good relationship with them.

“Both of them, I’ve had the opportunity to sit down with. Speaker Vos just once and Senator Fitzgerald a few times and I really enjoy hearing their perspectives and this is really an opportunity […] everybody wants Wisconsin’s economy to do well and Speaker Vos and Senator Fitzgerald are both very dedicated to that and recognize that WEDC’s role is important in that.”

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