Plans stall on Foxconn’s Wisconsin display plant

Foxconn LCD
Global contract manufacturer Foxconn Technology continues to send mixed signals on its plans to build a flat-panel display manufacturing plant in Wisconsin. (FierceWireless)

Foxconn Technology’s plans to build a flat-panel display plant in Wisconsin continue to be shrouded in mystery.

As the contract manufacturing giant has scaled down its original plans to build a $10 billion plant that would employ 13,000 people to a smaller facility, the economics of the huge incentives the state government originally approved have come into question. Now, Wisconsin’s current government is seeking to possibly renegotiate the incentives.

According to a recent Associated Press report, Foxconn officials met Wednesday with current governor Tony Evers and separately with Republican Senate Majority Leader Scott Fitzgerald and Assembly Speaker Robin Vos. Both Vos and Fitzgerald said in messages on Twitter that they got an update on the company’s plans, but declined to elaborate, the report said.

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Foxconn officials in Wisconsin for the meetings were Chairman Young Liu, Vice Chairman Jay Lee and Alan Yeung, who is Foxconn’s U.S. strategist, AP said.

A spokesperson for Evers, Melissa Baldauff, reported that Evers is trying to build a relationship with Liu, who in June replaced former chairman Terry Gou. Gou stepped down to run for president in Taiwan and lost in the primary.

Foxconn, the world’s leading electronics manufacturer, announced in 2017 its plans to build the huge facility, in Mount Pleasant, to build displays for flat-panel TVs. Wisconsin’s then Gov. Scott Walker approved a generous incentive package that would have provided Foxconn with $4 billion in state and local tax credits over 14 years, the AP report said.  

But as delays mount, Foxconn has now decided to build a smaller plant than originally expected. This has prompted current governor Evers to question whether the incentives need to be renegotiated, AP said.

In an online article earlier this month on The Verge, the Wisconsin Department of Administration requested a reassessment of the costs and benefits to the state regarding the far-tinier facility. A reported conducted by Tim Bartik of the Upjohn Institute for Employment Research found that if the subsidy levels in the current contract are kept, each Foxconn job would cost taxpayers about $290,000, compared to $172,000 if Foxconn built the original $10 billion, 13,000-job facility.

For comparison, Bartik estimated the subsidies Virginia offered Amazon for its second headquarters amounted to between $10,000 and $13,000 per job, according to the article.

Bartik concluded in the report, “The most important conclusion of this analysis is that it is difficult to come up with plausible assumptions under which a revised Foxconn incentive contract, which offers similar credit rates to the original contract, has benefits exceeding costs. “The incentives are so costly per job that it is hard to see how likely benefits will offset these costs.”

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