The hyped promise of 13,000 jobs shrinks to a realistic 1,400 as Evers delivers on a major campaign promise.
Foxconn Technology Group will be eligible for up to $80 million in tax credits under a new deal approved Tuesday by the Wisconsin Economic Development Corp. board of directors, decreasing the state’s potential tax burden by nearly $2.8 billion.
The new contract comes more than three years after Foxconn initially agreed to build a sprawling $10 billion LCD factory that would employ 13,000 people in exchange for nearly $4 billion in state and local tax credits. The company is now expected to deliver 1,454 jobs and invest $672 million in a Racine County facility by 2026, with no requirements on what the company will produce at the facility, according to a press release from Gov. Tony Evers’ office.
“The agreement provides the opportunity to be responsive to the marketplace that a modern, forward-looking company like Foxconn needs to pursue innovation,” WEDC Secretary and CEO Missy Hughes said in a statement. “At the same time, by right-sizing the contract, our state is in a position where we can ensure that all businesses—everywhere—have the resources they need to grow and prosper.”
Despite former Gov. Scott Walker and President Donald Trump touting the project as a way to revolutionize Wisconsin industry, it became clear early on the LCD mega-factory would never come.
The company reportedly flailed for the better part of three years as it scrambled to determine what it would actually make at the facility; it never received a single dollar in state tax credits under the initial agreement because it repeatedly failed to live up to the original terms.
“When I ran to be governor, I made a promise to work with Foxconn to cut a better deal for our state—the last deal didn’t work for Wisconsin, and that doesn’t work for me,” Evers said in a statement. “Today I’m delivering on that promise with an agreement that treats Foxconn like any other business and will save taxpayers $2.77 billion, protect the hundreds of millions of dollars in infrastructure investments the state and local communities have already made, and ensure there’s accountability for creating the jobs promised.”
In a statement, Foxconn said the new deal provides “clarity and certainty” and that the project will now be able to be more reactive to global market conditions.
“Foxconn is happy to have worked with the Evers administration to significantly lower taxpayer liability,” Foxconn said. “Original projections used during negotiations in 2017 have at this time changed due to unanticipated market fluctuations.”
The company said its existing structures in Wisconsin—which include a 1 million-square-foot facility currently being used for storage, 300,000-square-foot manufacturing center, 120,000-square-foot multipurpose buildings, and “globe” data center—have cost $900 million.
Racine County and Mount Pleasant, who have a separate contract with Foxconn worth about $1 billion, said in a joint statement they are pleased with the company’s progress and have no intention of renegotiating their deal.
“The current local development agreement continues to provide very strong protections for taxpayers,” they said. “We look forward to reviewing the amended state agreement when available, but at this point, no changes to the local development agreement have been proposed or contemplated.”
Foxconn chairman Young Liu last month said the company might use the Mount Pleasant site to build electric cars.
Assembly Minority Leader Gordon Hintz (D-Oshkosh), one of the state’s most vocal Foxconn critics and a member of the WEDC board, said the new deal is “more realistic.”
“I commend Governor Evers, Secretary Hughes, her team at WEDC, and everyone involved in the negotiation with Foxconn for charting a way forward that will accomplish our goal while taking steps to ensure that the people of Wisconsin are protected and their tax dollars are invested wisely,” Hintz said in a statement.
Sen. Dan Feyen (R-Fond Du Lac), another WEDC board member, said the project still provides “a transformational opportunity” for the state.
“I am excited not only for southeastern Wisconsin, but for the supply chain opportunities Foxconn presents to all Wisconsin companies – including many in the 18th Senate District,” Feyen said in a statement.
This story has been updated with comment from state Rep. Gordon Hintz and Sen. Dan Feyen.