A massive Taiwanese electronics company promised to build a huge factory in Wisconsin and provide 13,000 new jobs in exchange for tax breaks and other incentives.
The company built the facility, but officials are asking: Where are the jobs, and what is being produced?
A new report reveals that the new factory is a fake.
What's the background?
Back in 2017, Taiwan's electronics giant Foxconn vowed to build what the company said would be a $10 billion factory in Wisconsin that would employ 13,000 people building LCD TV screens. In exchange, the state government offered the company more than $4 billion in incentives, including $3 billion in refundable tax credits.
In June 2018, President Donald Trump, Foxconn CEO Terry Gou, and former Wisconsin officials ceremonially broke ground on what was supposed to be the site of a 20-million-square-foot complex.
But on March 30, 2019, the company suddenly announced it would not be building the plant after all.
Great news on Foxconn in Wisconsin after my conversation with Terry Gou! https://t.co/2wtuCdl7TX— Donald J. Trump (@Donald J. Trump)1549046648.0
What's happening now?
Well, Foxconn has built a factory in Wisconsin, but it appears that's about the extent of it.
In a story posted Wednesday evening, the Verge revealed that the factory is essentially a fake.
Citing a report from the Wisconsin Division of Executive Budget and Finance, the Verge said Foxconn did not build the giant Gen 10.5 LCD facility for building TV screens it had promised. Instead, the electronics outfit built a "smaller Gen 6 LCD factory" that "shows no signs of manufacturing LCDs in the foreseeable future and 'may be better suited for demonstration purposes.'"
The building is reportedly 1/20th the size originally promised — and now is not even being used for anything close to its stated purpose.
According to the Verge, Foxconn got a permit to "change its intended use from manufacturing to storage." Also, the company has yet to order the equipment necessary to make LCDs.
And those promised 13,000 jobs? Turns out that the company hired only 281 people by the end of 2019 who qualified to meet the terms of the deal with the state. Many of those employees have already been laid off, the Verge said. And the job numbers continue to go in the wrong direction.
Has the state responded?
Now the state is striking back, saying that the Foxconn project does not warrant the massive subsidy package pushed and approved by then-Gov. Scott Walker (R), which included at least $400 million in state and local government spending on land and infrastructure the company will now probably never use.
The state report cited by the Verge said, "Taxpayers fully performed their side of the agreement to date, while the Recipients have not," adding that "state taxpayers have spent as much if not more than" Foxconn has its campus.
The Wisconsin Economic Development Corporation, which has been tasked with overseeing the Foxconn deal, elected last week to deny the company its first installment of $3 billion in refundable tax credits, the Verge reported.
According to the WEDC, Foxconn has refused to come to the table to negotiate a revision of the company's contract, despite multiple warnings the state has issued that the current project is in violation of the state's agreement and therefore ineligible for subsidies.
In a message responding to the Verge's report, Foxconn said it was seeing "progress in Wisconsin" in spite of the many "growing pains," including the "need to explore new business opportunities, adjust to changes in global customer requirements, and a constantly evolving global technology industry." The company reportedly told the outlet that it is committed to making things work in Wisconsin but noted that the state's decision to deny some subsidies "threatens the good faith negotiations" over a new contract.
Gou responded more bluntly:
A statement the same day from Foxconn founder Terry Gou, however, struck a more ominous tone, linking the future of the project to continued state support and, implicitly, to President Donald Trump's reelection. "Foxconn will work as a partner with those who treat the company as a partner," Gou wrote. "Foxconn will remain committed to the completion and continued expansion of our project and investment in Wisconsin as long as policymakers at the federal, state, and local levels remain committed to Foxconn and the very important technology development goals driving the company's investments, as President Trump has done."