Foxconn won’t receive billions in tax credits until new contract drafted, says Wisconsin official

Local News

(WFRV) – Foxconn Technology Group has hit another snag in Wisconsin.

The Wisconsin Economic Development Corporation has reportedly denied the Taiwan-based company billions of dollars in state tax credits until a new contract is drawn up, according to the Wisconsin State Journal.

In 2017, former Governor Scott Walker and Foxconn signed a contract, providing multi-million dollar incentives if Foxconn reaches the 13,000-employee benchmark and makes a $10 billion capital investment in the state.

The Wisconsin State Journal reports that, in a letter to Foxconn’s Vice Chairman Jay Lee, WEDC Secretary Melissa Hughes says “Foxconn’s activities and investments in Wisconsin to date are not eligible for credit” under the original contract.

In December 2019, Gov. Evers’ top aide warned Foxconn that a scaled-down factory in Wisconsin won’t qualify for tax credits unless the Taiwanese electronics giant renegotiates with the state.

Last September, the University of Wisconsin said it has received just $700,000 of the $100 million that Foxconn pledged to fund engineering and innovation research on the school’s flagship campus. A Wisconsin State Journal report showed progress has been slow since the world’s leading electronics manufacturer made the promise in August 2018.

A month later, Wisconsin Public Radio reported development directors in Milwaukee, Green Bay, Eau Claire, Racine, and Madison said plans to construct centers in those cities were placed on hold as Foxconn appeared to focus on its main manufacturing campus in Mount Pleasant.

In April 2020, that Mount Pleasant location began making masks and working on medical ventilators for use during the coronavirus pandemic. The company said it plans to make “tens of thousands of procedural masks” to be used by health care professionals, law enforcement, caregivers, and pharmacists.

By late November 2019, Foxconn awarded contracts to design and construct its Foxconn Place Green Bay’s 4,800 square-foot second-floor location at the WaterMark Building downtown.

In late July 2017, the White House announced the Taiwanese electronics manufacturer Foxconn would build a plant in Wisconsin.

Just days after the announcement, Gov. Walker began a statewide tour, making his case on why building Foxconn in the Badger state would transform Wisconsin into the next Silicon Valley. At the time, he said that in order for Foxconn to receive $3 billion as we proposed they’ll have to meet or exceed the $10 billion dollar investment and the 13,000 direct jobs” for Wisconsin.

By August of that year, Pres. Trump reported the CEO of Foxconn, Terry Gou, told him off the record that the company was considering investing as much as $30 billion in its U.S. manufacturing operations. That’s three times as much as what it had promised the week before.

A poll released days after Gov. Walker signed the Foxconn incentive package showed the majority of participants overwhelmingly opposed the rollback of environmental protections for the company.

A 2017 analysis by the non-partisan Legislative Fiscal Bureau revealed it would take a quarter of a century before Wisconsin breaks even in its Foxconn investment.

In May 2018, Foxconn announced 28 subcontractors – 27 from Wisconsin – would share contracts totaling $100 million.

One year later, Foxconn awarded $13 million in contracts to three firms it describes as “Wisconsin-based” – C.D. Smith Construction of Fond du Lac, Otis Elevator Company of Milwaukee, and PSI Intertek of Waukesha.

By February 2019, Foxconn had announced it would change the focus of its operations in Racine County from manufacturing to research and development. A month later, Foxconn announced its Racine location would be a ‘Generation 6’ factory, focusing on making display screens for smaller devices like cellphones, tablets, and televisions.

In March 2019, Foxconn its construction manager announced $34 million in contracts to five Wisconsin-based businesses for construction.

One month later, Governor Tony Evers told reporters he believed it’s “unrealistic” to think that Foxconn will employ 13,000 people in Wisconsin, given that the size of its planned manufacturing facility had been reduced. A short time later, Gov. Evers said Foxconn had approached the state to renegotiate its contract. This came after Republican legislative leaders accused Gov. Evers of trying to undermine the deal by saying the contract was being renegotiated.

In early May 2019, Gov. Evers retreated from his previous comments that he didn’t think Foxconn would employ 13,000 people at its project in the state, saying instead that how many jobs Foxconn creates “could be less, it could be more” than 13,000.

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