Wisconsin on Monday told Foxconn Technology Group (富士康科技集團) that it would not qualify for billions of US dollars in state tax credits unless it strikes a new deal for a scaled-back factory complex.
State officials have told Foxconn since last year that it would not qualify for the tax credits without revisions to its 2017 contract, because the scope of the envisioned factory has been reduced.
US President Donald Trump heralded the original deal as a sign of a revitalized US manufacturing economy, calling the envisioned plant “transformational” and the “eighth wonder of the world.”
The deal with Foxconn, the world’s largest electronics manufacturer, was announced by Trump at a White House ceremony and he traveled to Wisconsin in 2018 for the groundbreaking.
Foxconn signed a contract with Wisconsin under then-governor Scott Walker in 2017 to earn nearly US$4 billion in state and local tax incentives for a US$10 billion display screen manufacturing campus and plant that would employ up to 13,000 people.
However, Walker, a Republican, in 2018 lost to Democrat Tony Evers, who ran as a critic of the project.
After the deal was signed, Foxconn said it was downsizing the factory to what is known as a G6 plant rather than a G10.5 plant.
The facility envisioned now would make smaller thin-film transistor liquid crystal display screens for cellphones and other devices, rather than the larger screens that were first proposed.
The letter sent on Monday from Wisconsin Economic Development Corp (WEDC) Secretary Melissa Hughes confirmed that from the state’s perspective, Foxconn’s new factory cannot get state tax credits unless the original contract is changed.
Foxconn officials said in a statement that the company has hired more than 520 people and invested US$750 million in the state, and has been a willing participant in talks over terms of a new agreement.
“WEDC’s determination of ineligibility during ongoing discussion is a disappointment and a surprise that threatens good faith negotiations,” the company said.
Hughes said in the letter to Foxconn vice president Jay Lee (李傑) that “Foxconn’s activities and investments in Wisconsin to date are not eligible for credit.”
“As we have discussed numerous times, markets, opportunities and business plans can and often need to change,” Hughes said in the letter. “I have expressed to you my commitment to help negotiate fair terms to support Foxconn’s new and substantially changed vision for the project.”
The state, in a separate communication, told Foxconn that because the company is not building the factory envisioned in the contract, the state cannot calculate job creation or capital investment tax credits.
“Once Foxconn is able to provide more accurate details of the proposed project, such as its size, scope, anticipated capital investment, and job creation, WEDC would be able to offer support for the project with tax incentives as it does for many large and small Wisconsin businesses,” Hughes wrote.
Wisconsin state Representative Gordon Hintz, the Democratic minority leader and a long-time critic of the project, said the announcement “cements Foxconn’s legacy in Wisconsin as one of broken promises, a lack of transparency, and a complete failure to create the jobs and infrastructure the company touted in 2017.”
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