Foxconn Faces New Challenges from Wisconsin Government
January 28, 2019
Foxconn Technology Group, which is facing the reality of the U.S. democratic process was planning to building a $10 billion LCD Gen 10.5 fab (already downsized to a Gen 6 fab) in Wisconsin in exchange for nearly $4 billion in state and local incentives, fell short of the minimum number of jobs it was required to create in 2018 to claim state-job creation tax credits, the company said Friday. Under the terms of the contract, Foxconn was eligible for up to $9.5 million in tax credits if it created 260 full-time jobs in 2018, according to the Wisconsin Economic Development Corp. The company created 178 full-time jobs.
“To protect state taxpayers, WEDC’s contract with Foxconn clearly states tax credits will only be awarded when Foxconn meets its annual job-creation and capital-investment requirements. Since that did not occur in 2018, the company will not receive any credits this year,” Mark Hogan, chief executive of the WEDC said in a statement. Foxconn could still earn the tax credits if it surpasses the 2,080 jobs it is supposed to hit in 2019, the WEDC said. The tax credit for hitting that goal is an additional $19.1 million. Foxconn promised the state it would build a 22-million-square-foot LCD fab and hire 13,000 employees, primarily factory workers along with some engineers and business support positions. To collect most of the incentives used to help lure Foxconn, the company must meet hiring, wage and investment targets by various dates. Foxconn is now considering bringing in personnel from Chinato help staff the facility because the U.S. no longer has the needed display engineers and other workers. (The company denied those reports.) In Friday’s letter to the Wisconsin Economic Development Corp., Foxconn reiterated its pledge to create 13,000 Wisconsin jobs and touted the more than $200 million in investments it has already made in the state. The company said it had changed the timing of its hiring plans, though it didn’t elaborate. “While we remain committed to creating 13,000 jobs in Wisconsin, we have adjusted our recruitment and hiring timeline,” Foxconn executive Louis Woo wrote. "As a company with operations around the world, we need to have the agility to adapt to a range of factors including global economic conditions.”