Taiwan’s Foxconn fails to qualify for Wisconsin subsidies

Foxconn denied tax credits after failing to meet hiring targets

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Foxconn Technology Group's Shenzhen plant. 

Foxconn Technology Group's Shenzhen plant.  (AP photo)

TAIPEI (Taiwan News) — Wisconsin officials have turned down a request by Foxconn Technology Group for the first round of payments in what was supposed to be US$3 billion in state tax credits for a massive Gen 10.5 LCD factory.

The Wisconsin Economic Development Corporation (WEDC), the group overseeing the deal, said in a letter on Monday (Oct. 12) that the Taiwanese tech company had failed to hire enough workers to qualify for subsidies in 2019 and that the plans for the project had drastically changed, creating the need for a new contract to be drawn up in order to qualify for subsidies, The Wall Street Journal reported.

Foxconn had originally planned to build a liquid-crystal display factory to make large-screen televisions and other devices but has since drastically scaled back the facility, which is now focused on building smaller touch screens, per the report.

The tax subsidies were originally planned to be released each year after Foxconn met certain hiring targets, according to The Verge. In 2018, the company was supposed to hire at least 260 employees, but Foxconn fell short of the target, so it did not apply for the subsidies that year.

In 2019, Foxconn was required to hire at least 520 people, and the company’s submission to the WEDC listed 550 workers at the end of the year. However, according to WEDC estimates, only 281 of those employees would be eligible under the terms of the original contract.

“As we have discussed numerous times, markets, opportunities and business plans can and often need to change,” wrote WEDC Secretary and CEO Missy Hughes in the letter addressed to Foxconn Vice Chairman Jay Lee, according to The Wall Street Journal. “I have expressed to you my commitment to help negotiate fair terms to support Foxconn’s new and substantially changed vision for the project.”

In response, the Taiwanese company said, “Foxconn has not received any tax credits from the State of Wisconsin despite achieving employment levels above 520 people and investing $750 million in Wisconsin that includes over a half a billion dollars invested in Foxconn’s manufacturing park.” It added, “WEDC’s determination of ineligibility during ongoing discussion is a disappointment and a surprise that threatens good faith negotiations.”

The WEDC mentioned in its letter that it had notified Foxconn back in March 2019 over concerns about the change in scope of the manufacturing complex.

“Once Foxconn is able to provide more accurate details of the proposed project, such as its size, scope, anticipated capital investment, and job creation, WEDC would be able to offer support for the project with tax incentives as it does for many large and small Wisconsin businesses,” The Wall Street Journal cited Hughes as saying.