For the second time in as many days a major news report on Foxconn Technology Group scaling back its $10 billion facility in southeast Wisconsin cast doubt on the project’s future, though this time the report was sharply denied by the company and state and local government officials.
On Thursday, Japanese business publication Nikkei Asian Review reported the Taiwanese electronic manufacturer’s Racine County project “has been suspended and scaled back as a result of negotiations with new Gov. Tony Evers.”
On Wednesday, company officials acknowledged the project, which is eligible for more than $4 billion in state and local tax incentives, has shifted its scope after Reuters quoted company executive Louis Woo saying it could not competitively make television screens in the U.S. and “in Wisconsin we’re not building a factory.”
The company reiterated Thursday it remains committed to the project and creating 13,000 jobs. In an email Thursday to Milwaukee television station WTMJ, Woo said, “No matter how we look at it, the campus cannot be simply described as a factory. It is a lot more than that.”
The Nikkei article cited a Foxconn document the financial publication obtained along with an unnamed company source who explained the decision to delay work on the Wisconsin project is in partly due to “weakening macroeconomic conditions” and the ongoing U.S.-China trade dispute.
Woo in his email to WTMJ did not confirm the Wisconsin facility would make large liquid crystal display TV screens, as originally proposed.
“We are still considering if, when and which panel technology to build which will best suit the customers’ demands and the state of Wisconsin,” Woo wrote.
Foxconn in a statement Thursday morning said its interactions with Evers have been constructive and it looks forward to ongoing discussions to “broaden the base of our investment within the State of Wisconsin.”
Evers’ side: It’s ‘false’
The Nikkei article reported Evers “approached Foxconn to renegotiate some of the side deals” former Gov. Scott Walker made with the company.
Evers spokeswoman Melissa Baldauff said in response to the story that “claims made today that (Evers) has tried to renegotiate the Foxconn contract are false.”
In a statement, Mark Hogan, CEO of the Wisconsin Economic Development Corp., which helped craft the Foxconn incentive package, disputed the contention in the article that there have been attempts to renegotiate the project.
“I have been involved in the Foxconn project from day one and there have never been any side deals and the contract stands on its own,” Hogan said. “In addition, there have been no attempts by either the company or the Evers or Walker administrations to renegotiate WEDC’s contract.”
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WEDC spokesman Kelly Lietz said he is unsure what “side deals” specifically refers to in the article, but that Hogan isn’t aware of any such deals occurring. The company has announced a North American headquarters in Milwaukee, innovation centers in Green Bay and Eau Claire and at one time was exploring another facility in the Madison area. Lietz declined to speculate on whether any of those were what the article meant by “side deals.”
Overtures of reassurance
The company affirmed Thursday in the next 18 months it plans to construct several facilities at the Mount Pleasant site in Racine County, including a back-end packaging plant, high-precision molding factory, a system integration assembly facility, a conceptual product testing center and research-and-development data center.
In a statement, Claude Lois, project director for the village of Mount Pleasant, which has approved construction permits for work on the Foxconn site, said work remains ongoing and Foxconn has not requested any change to its existing permits.
Lois said construction so far has included construction of a multi-purpose building and development of a 3-million-square-foot pad that will serve as a foundation for future building construction this spring.
In an interview with Reuters, a company executive said the bulk of the jobs at the facility would be for white-collar research and engineering jobs, rather than the types of blue-collar manufacturing jobs President Donald Trump touted when he and former Gov. Scott Walker broke ground on the project last June.
Evers’ top department secretary-designee said Wednesday the administration has been in regular contact with Foxconn, “however, we were surprised to learn about this development.”
In recent past
The two reports followed others from the past year questioning Foxconn’s Wisconsin investment.
Foxconn earlier in January admitted it had not met the minimum job creation quota to qualify for state tax incentives. It created 178 direct, full-time jobs, short of the minimum 260 needed to receive the first round of $9.5 million in state tax credits. The company would be able to claim those credits in future years if it exceeds the jobs target for any given verification period.
A report from Moody’s Investors Service called the missed jobs target “credit negative” and said it underscores the project’s risks to Racine County and the village of Mount Pleasant, as well as the state’s exposure to project failure. “Credit negative” does not mean a rating or outlook change; rather, it shows the impact of a distinct event or development.
State Journal reporter Mark Sommerhauser contributed to this report.