Taiwanese electronics giant Foxconn earlier this week announced that it was changing its plans for the massive manufacturing facility it plans to build in Racine County, Wisconsin. It also disputed a news story saying that construction work on the project is being suspended.
Originally, the project – which former Wisconsin Gov. Scott Walker attracted to the state with a generous package of tax incentives – was supposed to be a manufacturing plant that would bring 13,000 blue-collar factory jobs to Wisconsin.
Now, though, Foxconn says that the plant will instead primarily operate as a research-and-development center. The center will be staffed mostly by engineers and scientists.
Foxconn’s Racine County facility was supposed to build high-tech liquid-crystal display screens.
Louis Woo, special assistant to Foxconn’s chief executive officer Terry Gou, told Reuters that Foxconn might scratch its plans to build the display screens in Racine County, telling the news service that the company can’t compete by building the displays here.
Woo told Reuters that Foxconn now wants to build a technology hub. Three-quarters of the jobs here would be in research, development and design.
Critics of the move say that it amounts to Foxconn reneging on its promise to bring thousands of factory jobs to the region.
“Every step of the way Foxconn has overpromised and under-delivered,” said Democrat Gordon Hintz, the minority party leader in Wisconsin state assembly, in a written statement. “This news is devastating for the taxpayers of Wisconsin.”
Foxconn was promised about $4 billion in tax credits to open the plant in Racine County. Foxconn, though, has to hit certain milestones to receive its tax credits. The company missed its first milestone in December. Then it only hired 178 people instead of the 260 it needed to receive a tax credit of $9.5 million. It’s unclear how turning the factory into a research-and-development facility will impact the tax credits Foxconn can still hit.
This story took another turn this week when the Nikkei Asian Review, a news provider in Japan, reported that Foxconn will suspend work on the $10 billion plant in Wisconsin, along with a second plant in China.
That report cited anonymous sources who cited weakening economic conditions and the uncertainties brought about by a trade war as two reasons why Foxconn might be suspending construction. The sources also told the Nikkei Asian Review that Foxconn made the decision after newly elected Wisconsin Gov. Tony Evers asked to renogotiate parts of the state’s aggreement with the company.
In response, Foxconn released a statement Jan. 31 disputing the Nikkei report.
“The company remains committed to its long-term investment and creating 13,000 jobs in Wisconsin,” Foxconn said in its statement.
The company also said that its interactions with Evers have been productive.
“All interactions to date with Governor Evers and his team have been constructive and we look forward to further discussions as we continue to invest in American talent and broaden the base of our investment within the State of Wisconsin,” the statement said.
The Associated Press reported that Mark Hogan, head of the Wisconsin Economic Development Corporation, said that the state has not attempted to rework the contract with Foxconn.