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Wisconsin Pulls The Plug on Trump/Foxconn Deal
Three years ago, President Trump, Wisconsin Republican Gov. Scott Walker and Foxconn CEO, Terry Gou announced a landmark agreement: Foxconn would build a Gen 10.5 LCD fab in Wisconsin hiring 13,000 employees, Walker would provide a record state financed $3b in incentives and Trump would claim that through his efforts manufacturing jobs were returning to the US. Much has changed in the 3-years, Walker is gone, replaced by Democrat Tom Evers, Gou is gone, attempting to seek the presidency of Taiwan, Trump is fighting for his political life and the LCD industry is hobbled by too much capacity.
The Verge reported attempts to renegotiate that contract between the State of Wisconsin and Foxconn have so far failed, and the Wisconsin Economic Development Corporation (WEDC), which oversees the deal, rejected Foxconn’s application for tax subsidies on the grounds that Foxconn had not carried out the Gen 10.5 LCD factory project described in its original contract. WEDC also noted that even if whatever Foxconn is currently doing had been eligible under the contract, it had failed to employ the minimum number of people needed to get subsidies. Foxconn needed to employ at least 520 people at the end of 2019 to receive subsidies and claimed to have hired 550, but WEDC estimated that only 281 would qualify under the terms of the contract.
The deal never made sense as 1) There were already 5 Gen 10.5 fabs committed in China and 1 Gen 10 fab in Japan, Wisconsin lacked the infrastructure and qualified workforce to staff the fab and the market for large LCD panels did not exist in the US, so it is dead expect for the law suites.
Talks over the contract began in March 2019, when a Foxconn representative met with Wisconsin Gov. Tony Evers and expressed interest in revising the original deal to build a Gen 10.5 fab to reflect the company’s plans at the time: a smaller LCD factory, server board manufacturing, and a medical facility, all employing about 1,500 people rather than the 13,000 it had promised. But the company repeatedly refused invitations from the state to begin the process of revising the contract, which would start with Foxconn submitting its new plans with updated employment and investment projections to the WEDC. New documents obtained through a records request show that Foxconn and WEDC finally entered into a settlement agreement for the negotiations in July of this year, but the settlement period expired without a deal.
Three years ago, President Trump, Wisconsin Republican Gov. Scott Walker and Foxconn CEO, Terry Gou announced a landmark agreement: Foxconn would build a Gen 10.5 LCD fab in Wisconsin hiring 13,000 employees, Walker would provide a record state financed $3b in incentives and Trump would claim that through his efforts manufacturing jobs were returning to the US. Much has changed in the 3-years, Walker is gone, replaced by Democrat Tom Evers, Gou is gone, attempting to seek the presidency of Taiwan, Trump is fighting for his political life and the LCD industry is hobbled by too much capacity.
The Verge reported attempts to renegotiate that contract between the State of Wisconsin and Foxconn have so far failed, and the Wisconsin Economic Development Corporation (WEDC), which oversees the deal, rejected Foxconn’s application for tax subsidies on the grounds that Foxconn had not carried out the Gen 10.5 LCD factory project described in its original contract. WEDC also noted that even if whatever Foxconn is currently doing had been eligible under the contract, it had failed to employ the minimum number of people needed to get subsidies. Foxconn needed to employ at least 520 people at the end of 2019 to receive subsidies and claimed to have hired 550, but WEDC estimated that only 281 would qualify under the terms of the contract.
The deal never made sense as 1) There were already 5 Gen 10.5 fabs committed in China and 1 Gen 10 fab in Japan, Wisconsin lacked the infrastructure and qualified workforce to staff the fab and the market for large LCD panels did not exist in the US, so it is dead expect for the law suites.
Talks over the contract began in March 2019, when a Foxconn representative met with Wisconsin Gov. Tony Evers and expressed interest in revising the original deal to build a Gen 10.5 fab to reflect the company’s plans at the time: a smaller LCD factory, server board manufacturing, and a medical facility, all employing about 1,500 people rather than the 13,000 it had promised. But the company repeatedly refused invitations from the state to begin the process of revising the contract, which would start with Foxconn submitting its new plans with updated employment and investment projections to the WEDC. New documents obtained through a records request show that Foxconn and WEDC finally entered into a settlement agreement for the negotiations in July of this year, but the settlement period expired without a deal.
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