The state of Wisconsin has negotiated a dramatically reduced agreement with Taiwanese contract maker Foxconn. The move, announced Tuesday by Democratic Gov. Tony Evers, is a rejection of an agreement negotiated four years earlier by Evers’ Republican predecessor Scott Walker.
The original agreement called for Foxconn to spend up to $ 10 billion to build a state-of-the-art factory to make large liquid crystal display panels. The deal was announced in 2017, and then-President Donald Trump traveled to Wisconsin for the 2018 revolutionary, describing the new factory as “the eighth wonder of the world.” Foxconn was to raise $ 2.85 billion in state and local incentives under that initial deal.
The business may have been a smart policy for Foxconn in 2017. The company uses factories in other countries to assemble consumer electronics for Apple and other US companies – products that are often shipped back to the United States for sale. So Trump’s protectionist inclinations seemed like a serious threat. Announcing plans to create thousands of jobs in a key state on the battlefield gave Trump something to praise, and that could have helped Foxconn be favored with the new administration.
But it soon became clear that Foxconn was not going to hold out at the end of the fair. The company was to build a factory based on the new 10.5th generation standard in the LCD panel industry, which uses huge sheets of “mother glass” that are about 3 square meters. Each sheet of glass is usually cut into several displays for use in large TVs. Making such large panels requires a large factory – the initial business was for Foxconn to employ up to 13,000 workers in Wisconsin by 2032.
The new agreement recognizes that Foxconn’s presence in Wisconsin will be much lower. The deal calls for Foxconn to spend just $ 672 million on a plant that will employ only 1,454 people by 2025. And the state will provide Foxconn with just $ 80 million in incentives – a 30-fold reduction from the incentive package initial.
Evers described the new package as “a better deal for our state”. According to Reuters, Evers “also stressed that the incentives were in line with those available to any company.”
According to The Wall Street Journal, “the old contract required Foxconn to build a certain type of screen manufacturing facility in Mount Pleasant, 25 miles south of Milwaukee.”
Foxconn will now have a greater ability to adapt its plans to changing market circumstances. Last month, Foxconn President Young Liu suggested that the company could produce electric cars in Wisconsin, although no specific plans have been announced.