Foxconn Shrinks Plans for Wisconsin Plant
By Valerie Bauerlein
Foxconn is scaling back plans for a liquid-crystal-display plant
in Wisconsin, saying it expects to invest a fraction of the $10
billion promised nearly four years ago, according to a new contract
with the state.
The electronics maker, formally known as Hon Hai Precision
Industry Co., negotiated a new economic-development deal on Tuesday
with the state of Wisconsin that was a shadow of the record-setting
incentives package announced in the summer of 2017.
Foxconn, the world's biggest electronics contract manufacturer,
now plans to invest as much as $672 million and create 1,454 jobs
by the year 2025 to qualify for $80 million in incentives,
according to the contract.
The company previously agreed to invest as much as $10 billion
and hire 13,000 people by the year 2032 to qualify for $2.85
billion in incentives.
The Foxconn deal was originally struck by the company's former
chairman and founder, Terry Gou, and former Republican Gov. Scott
Walker, who lost his post in 2018 to Democrat Tony Evers. The deal
was announced at the White House and touted by then-President Trump
as a pillar of the administration's plan to boost U.S.
On Tuesday, Gov. Evers said the new contract delivered on his
campaign commitment to save taxpayer money and protect public
investments for the existing plant site south of Milwaukee, where
officials have invested hundreds of millions of dollars in roads
and other infrastructure.
"I made a promise to work with Foxconn to cut a better deal for
our state," he said. "The last deal didn't work for Wisconsin."
Foxconn, a supplier of screens for Apple Inc., has previously
said fast-changing LCD technology complicated plans in Wisconsin.
In a recent report, Foxconn said the project was also slowed by
"cultural assimilation, changing business demands, tariffs, a
pandemic, and a presidential election year."
Foxconn media representatives didn't respond to a request for
comment. But Foxconn officials have previously asked for more
flexibility on what types of investments could qualify for
incentive payments, which the governor said the new contract
The new contract allows incentive payments for "economic
investment activities related to locating and operating a
technology and manufacturing ecosystem." The old contract required
Foxconn to build a specific type of screen-making facility in Mount
Pleasant, 25 miles south of Milwaukee.
Foxconn has been looking to expand beyond electronics since
founder Mr. Gou stepped down in 2019. Sales of iPhones have slowed,
and the contract-manufacturing business has suffered from
relatively low profit margins.
Last month, Foxconn Chairman Young Liu said it might make sense
to manufacture electric cars at the Wisconsin site, in light of the
company's recent agreement with Los Angeles-based electric-vehicle
startup Fisker Inc.
The cleared, prepped site is bigger than Central Park, with
nearly 100 homes and small farms bulldozed to make way for Foxconn.
For now, the site houses a few shell buildings and a nearly
complete glass-and-steel dome that can be seen from nearby
(END) Dow Jones Newswires
April 20, 2021 19:21 ET (23:21 GMT)
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