Economy & Business

Foxconn Abandons Tax-Break-Aided Plan to Build Wisconsin Factory

(Tyrone Siu/Reuters)

Taiwanese tech giant Foxconn is abandoning a much-touted plan to build a sprawling factory in Wisconsin that would have employed blue-collar workers, opting to instead establish a research center that will employ engineers and other highly educated workers.

“In Wisconsin we’re not building a factory,” Louis Woo, special assistant to Foxconn chief executive Terry Gou, told Reuters in a piece published Wednesday. “You can’t use a factory to view our Wisconsin investment.”

In a deal that was celebrated by President Trump at a White House ceremony in July 2017, Wisconsin lawmakers agreed to provide Foxconn with $3 billion in tax breaks and credits in exchange for its commitment to create up to 13,000 manufacturing jobs in the state over the next 15 years.

“I would see Terry, and I would say, ‘Terry, you have to give us one of these massive places you do great work with,’” Trump said, flanked by then-Wisconsin governor Scott Walker in the East Room of the White House. “The American worker will not let you down.”

Foxconn had initially vowed to hire more than 5,000 Wisconsin workers by the end of 2020, but a “company source” told Reuters that they now plan to hire just 1,000 workers by that date. Under the terms of the deal Foxconn negotiated with Walker, the agreed-upon tax breaks and credits can be revoked if the firm does not follow through on its commitments, though it remains unclear whether the breaks will be revoked.

Foxconn, which supplies components for Apple, Amazon, and Google products, planned to manufacture LCD screens in the $10 billion factory — a plan they have since concluded would be too expensive.

“In terms of TV, we have no place in the U.S.,” Woo said. “We can’t compete.”

Walker lost his reelection bid to Democrat Tony Evers in November amid harsh criticism of the Foxconn deal, which he’d championed since 2013. Opponents of the deal charged that it amounted to a corporate giveaway with no guaranteed benefits for Wisconsin’s workers. They also cited Foxconn’s history of reneging on high-profile job-creation promises after the media spotlight fell away. In 2013, the company vowed to create 300 manufacturing jobs by investing $30 million in a technology factory in central Pennsylvania, only to quietly scrap that plan after it garnered an initial burst of positive PR.

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