Foxconn Technology Group, also known as Hon Hai Precision Industry Co. Ltd., has renegotiated a deal with the state of Wisconsin to build a new electronics factory there, the governor of Wisconsin reported today. It’s the second time the company has reduced its commitment to new construction in the state.
The latest deal would give Foxconn $80 million in incentives if the company hires 1,454 workers with an average wage of $53,875 and invests $672 million in five years, and will allow Foxconn to cash those incentives without specific production requirements as long as it meets the other targets.
The latest renegotiation is Foxconn’s second time reconsidering its plans for manufacturing in Wisconsin, according to Reuters. In 2017, the company said it would spend $10 billion to build a factory that would hire 13,000 people to build advanced television displays and screens. In exchange, the company would receive $2.85 billion in performance-based tax credits to build the plant. Governor Tony Evers, who has been critical of the plan, said that including tax incentives from local governments as well as road and highway investments brought total subsidies to over $4 billion.
The following year, the company forfeited some of those incentives after falling short of its hiring goals, and in January 2019 the company rhetorically backed away from making a factory to hiring mostly researchers and engineers instead of assembly-line or production workers. At the time, Hon Hai Precision Industry CEO Terry Gou said that making TVs in Wisconsin was prohibitively difficult in terms of labor cost and supplies.
“In terms of TV, we have no place in the U.S.,” he told Reuters then. “We can’t compete.” He speculated assembly operations in the state could pivot to making smaller screens for products like the iPhone, which Foxconn is a major supplier for.
The company had agreed under the old plan to hire 5,200 people by the end of 2020, but a source at the company cited by Reuters said it has only hired about 1,000.
Wisconsin Governor Tony Evers criticized the old plan, saying in a statement, “the last deal didn’t work for Wisconsin, and that doesn’t work for me.” Evers said the new agreement would save Wisconsin taxpayers $2.77 billion and ensure Foxconn is accountable for the jobs it still promises to create.
Foxconn, in a statement, said that conditions have changed since the original deal was struck, and said the new deal gives it “flexibility to pursue business opportunities in response to changing global market conditions.”
