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031919-wsj-news-foxconn1

The Foxconn site in Racine County, which is beginning to take shape, could cost Wisconsin taxpayers billions -- assuming it moves forward as planned.

Electronics maker Foxconn Technology Group said Monday it will begin construction this summer on a display-screen manufacturing hub near Racine, with plans for production to start by the end of 2020.

A company statement said the construction marks the next phase of Foxconn’s overall blueprint for its campus in Mount Pleasant.

It underscores the company’s manufacturing plans at the site, weeks after reports and statements by Foxconn officials suggested the company was scaling back or changing its plans to build display screens in Wisconsin.

If the plant is operational by fall 2020, it also could give political fodder to one of its top cheerleaders, President Donald Trump, who has touted Foxconn’s plans as heralding a renaissance in U.S. manufacturing.

Under a deal negotiated by former Gov. Scott Walker, Foxconn is getting a state subsidy package of as much as $3 billion to build a Wisconsin campus that could employ as many as 13,000 workers.

Foxconn’s so-called “Gen 6” facility will manufacture liquid crystal display, or LCD, screens, according to the statement, which included a construction timeline. It said their uses will be in a range of applications, including education, medicine and health care, entertainment, sports, security and smart cities.

A Gen 6 facility typically produces screens for devices such as mobile phones or tablets. The “Gen 10.5” facility cited in Foxconn’s 2017 contract with the state typically produces larger TV-sized screens.

The statement said Foxconn will announce awards for infrastructure work near its Mount Pleasant site by April 1. In May, the company will issue bid packages for construction of the manufacturing facility.

Foxconn executive Louis Woo said in a statement that using Wisconsin contractors will “continue to be our priority as we lay the groundwork for a significant manufacturing presence in Racine County.”

Gov. Tony Evers’ spokeswoman, Melissa Baldauff, responded to the Foxconn news with a statement saying the administration will focus on protecting Wisconsin taxpayers.

“As the Foxconn project develops there will be ongoing conversations to ensure that Wisconsin taxpayers see a good return on their investment, but today’s announcement by Foxconn makes it clear that Gov. Evers is getting results,” Baldauff said.

Contract features

The state’s contract with Foxconn permits the company to claim as much as $1.35 billion in refundable state tax credits over 15 years, starting this year, for 15 percent of money it spends on capital investment such as facility construction.

In 2019 the company could claim as much as $193 million in capital investment credits, provided it creates at least 520 full-time equivalent jobs in Wisconsin.

Foxconn also may claim as much as $1.5 billion over 15 years for 17 percent of what it spends on salaries for jobs created in Wisconsin.

‘Positive news’

Republican legislative leaders hailed the news in Twitter posts. Assembly Speaker Robin Vos, R-Rochester, whose legislative district includes the Foxconn site, tweeted “Good to see #Foxconn is moving forward on the Mount Pleasant plant. It’s positive news for @RacineCounty and the entire state.”

The Foxconn statement comes about six weeks after a flurry of news reports and public statements from Foxconn officials left many confused about their plans for Wisconsin.

In a Reuters report published in January, Woo said “in Wisconsin we’re not building a factory” and that it would be more profitable to make screens outside the U.S. and import them here. A company executive also said the bulk of the jobs at the Wisconsin facility would be for white-collar research and engineering jobs, rather than blue-collar manufacturing.

After Trump contacted company officials directly, Foxconn reversed course and confirmed it would build an LCD factory in southeast Wisconsin.

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