Foxconn’s Wisconsin project is moving ahead
The world's largest contract electronics manufacturer, Taiwan-based Foxconn is shifting the project to become a research and development hub
Wisconsin Gov. Tony Evers’ administration and Foxconn Technology Group said Thursday that a massive project planned for the state was moving forward, and disputed Republicans who blamed the new Democratic governor for a change in direction away from manufacturing to more research jobs.
Foxconn said Wednesday that it was shifting the focus of the Wisconsin project away from making high-tech flat panel screens for televisions and other products in favour of a research and development hub. While the company insisted it would still employ up to 13,000 people, they would primarily be scientists and developers, not blue collar assembly line workers as originally promised.
President Donald Trump, who heralded the Foxconn project as the “eighth wonder of the world” at its groundbreaking last summer, had pointed to it as a sign of a manufacturing resurgence in America. In response to Foxconn’s change in direction, the White House on Wednesday referenced to Trump’s work to improve the U.S. business climate. An administration official, who asked not to be identified to discuss internal thinking, said the White House would be “disappointed” if the promised initial investment did not pan out.
Foxconn has repeatedly revised what it plans to do in Wisconsin
Foxconn, the world’s largest electronics manufacturer, has not said this week whether it will invest the $10 billion in Wisconsin as originally promised. Local Wisconsin government and economic development officials said they were assured by Foxconn that remained the goal. Over the past year, Foxconn has repeatedly revised what it plans to do in Wisconsin and the type of workers who will do it. Foxconn cited a changing global market as requiring a move away from making LCD panels in Wisconsin. Apple is Foxconn’s main manufacturing customer and it has forecast a drop in revenue from the Chinese market due to decreasing demand for iPhones.
Foxconn’s shift away from manufacturing LCD panels led Republican legislative leaders to lay blame on Evers, who had been critical of the project and its potential $4 billion in taxpayer subsidies during his campaign with then-Gov. Scott Walker. Evers has also proposed capping a manufacturing tax credit program that is not a part of the contract with Foxconn. Still, Republicans said Evers’ desire to all-but eliminate that credit was part of an “anti-jobs agenda.” Foxconn’s move away from manufacturing shows it is “reacting to the wave of economic uncertainty that the new governor has brought with his administration,” Assembly Speaker Robin Vos and Senate Majority Leader Scott Fitzgerald said.
Attempting to renegotiate side deals with the company
But both Foxconn and Mark Hogan, head of the state’s economic development agency under Walker and Evers, disputed the GOP claims on Thursday. Hogan, CEO of the Wisconsin Economic Development Corporation, also disputed a report from Nikkei Asian Review, citing anonymous sources, that said Evers was attempting to renegotiate side deals with the company.
“I have been involved with the Foxconn project from day one and there never have been any side deals and the contract stands on its own,” Hogan said in a statement. “In addition, there have been no attempts by either the company or the Evers’ or Walker administrations to renegotiate WEDC’s contract.”
Evers’ spokeswoman Melissa Baldauff tweeted that the report claiming Evers was trying to renegotiate the contract was “false.” Hogan said Evers and his administration “have done a very good job of reaching out to company officials and developing a relationship that will protect our taxpayers’ interests and at the same time, give Foxconn the ability to be successful in Wisconsin.”
The project is moving forward and it plans
Foxconn issued its own statement Thursday, saying “All interactions to date with Governor Evers and his team have been constructive and we look forward to further discussions” about continuing the project. Foxconn repeated its assurances from Wednesday that the project is moving forward and it plans to employ up to 13,000 people. It said over the next 18 months Foxconn plans to build a packaging plant, a moulding factory, an assembly facility, a prototyping centre, a research and development centre a high-performance data centre and a “town centre” to support people working on the sprawling campus near Racine.
Vos and Fitzgerald did not immediately return messages seeking comment in reaction to the Foxconn and Hogan statements. The Foxconn deal was negotiated by Hogan for Walker, who along with Trump touted it as a “once-in-a-generation” opportunity to bolster manufacturing in the United States.
The credit rating agency Moody’s Investors Service cautioned Thursday that Foxconn’s failure to hire enough people last year to capture state tax credits highlights the financial risks facing local communities that are spending money on the project. Foxconn filled 178 Wisconsin jobs in 2018, 82 short of the target needed to claim $9.5 million in tax credits. However, the company could claim them by exceeding job totals in future years.
Associated Press writer Darlene Superville in Washington contributed to this report.