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Reuters

Foxconn and Trump Fail on Wisconsin Jobs

Chinese company failed to create jobs after $3 billion in tax credits given

Brian Young's picture
Oct 13, 2020

In 2018, Trump touted a “deal” with Foxconn to bring thousands of jobs to Wisconsin and to build a 20 million square foot factory. The deal included some of the largest tax breaks for a foreign company in United States history.

Now two years later, the factory is not built, and the jobs have not been created. The lack of progress has led the Wisconsin Economic Development Corporation (WEDC) to reject tax credits for the company in 2020. In a letter sent to Foxconn, WEDC said they are ineligible for tax credits because the company failed to meet the criteria laid out below.

the economic investment activities of locating the Recipients’ and Guarantors’ Generation 10.5 TFT-LCD Fabrication Facility and supporting operations in the Electronics and Information Technology Manufacturing Zone, the capital investment of up to Ten Billion ($10,000,000,000) and the creation of up to 13,000 new Full-Time Jobs, as outlined in the Recipients’ Application, for which WEDC is certifying Recipients as eligible for receiving Tax Credits

They went on to say that the WEDC has been unable to verify that the company created the requisite number of jobs in the Zone, full-time jobs outside the Zone but within the state, or that Foxconn began making a significant expenditure towards building their factory.

“It is evident from the Recipients’ 2019 Annual Project Report that the Recipients are not building a 10.5 Fab, and that current activities are smaller in scale and economic impact to the region and the State of Wisconsin than those projected by the analyses run on the 10.5 Fab when WEDC initially approved and executed the Agreement. The Agreement and Application provide that, by the end of 2019, 2,080 Full-Time Jobs were anticipated to be created and $3,307,000,000 in capital expenditures would be invested. WEDC’s initial review of the 2019 Annual Project Report reveals that, by contrast, the Recipients employed fewer than the minimum required 520 Full-Time Employees and had invested roughly $300,000,000 in capital expenditures.”

The original project was supposed to create 13,000 jobs and build large LCD screens for the company. It was hailed by Trump and then Governor Scott Walker as evidence that Trump was bringing manufacturing back to the United States. Almost immediately after nearly $3 billion in tax breaks were approved the company began scaling down their plans. Now the Milwaukee Journal Sentinel reports that instead of building 10.5 LCD screens, Foxconn will manufacture smaller 6.5 LCD screens in a smaller factory. The BBC reports that so far Foxconn has only created 300 jobs.

“Foxconn needs to outline what they’re doing,” Wisconsin Secretary of Administration Joel Brennan said. “And then we need to align what that is with the available resources that the state has to provide any support. There is no manufacturing to speak of going on at that facility right now. The state has made a significant investment in the project already. The state has honored its commitment by spending about $250 million on infrastructure, roads, all in preparation for the Generation 10.5 facility, which was Foxconn’s obligation to honor. So, the state and taxpayers have met their obligation.”

This is now the second time the company has failed to meet the basic requirements to receive the tax breaks after not receiving them in 2019 either.  

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