Foxconn and Wisconsin renegotiate factory agreement, future of project uncertain [u]

Posted:
in General Discussion edited April 23
According to a letter Wisconsin Governor Tony Evers sent to Foxconn executive Louis Woo, the state is renegotiating a deal that promised the Taiwan-based company incentives in return for building a massive manufacturing and R&D facility in the region.

Foxconn Wisconsin
President Donald Trump attends Foxconn's groundbreaking ceremony in Wisconsin in 2018.


The renegotiation process commenced after Foxconn proposed changes to the project's original plans, reports CNBC.

Evers in his letter said Woo, a special assistant to Foxconn Chairman Terry Gou who is leading the Wisconsin operation, spoke to him and other government officials about potential modifications to the contract in March. Those proposals arrived following rumors that the deal stalled.

"To my knowledge, this was the first time either Foxconn or the State of Wisconsin has mentioned amending or changing the agreement approved on 2017," Evers wrote.

In response to Woo's unspecified recommendations, Evers said the state is identifying areas that "will enable greater flexibility and transparency as the project continues to evolve," the report said.

It is unclear what amendments have been made to the original deal as part of the renegotiation process, but the initial agreement called for Foxconn to receive some $4.5 billion in tax incentives to undertake the $10 billion project. In addition to substantial capital investments in Wisconsin infrastructure, Foxconn promised the creation of some 13,000 jobs.

Foxconn has made little progress over the past two years. Gou, joined by President Donald Trump, broke ground at the Mount Pleasant site last June, but has since missed investment and hiring targets.

"Foxconn has never wavered from our commitment to our contract with the State of Wisconsin and the creation of 13,000 jobs as part of our broader effort to make the Badger state a global technology hub," Foxconn Technology Group said in a statement to AppleInsider on Tuesday. "As part of our ongoing, long-term investment in Wisconsin, we have conducted both routine engagement and good faith discussions with the Evers Administration regarding areas of flexibility within the existing agreement to ensure the company and our workforce will be positioned for long-term success. Throughout these discussions, we have both operated within the existing contract framework and maintained our long-term workforce, salary, and investment commitments."

The Wisconsin facility was first pitched as a large-format LCD plant, but Foxconn later shifted focus to research and development after acknowledging it would be unable to compete in the U.S. TV market. Apple was at one point rumored to benefit from the development, with speculation suggesting Foxconn planned to pivot to small-format panels like those used in smartphones and tablets.

An investigation in April found Foxconn's project amounts to unused office space, empty buildings and facilities still under construction. Other associated Wisconsin locations housed tenants unrelated to the program.

Last week, Evers called for a renegotiation of the contract, suggesting the company would not be able to meet its end of the arrangement.

"Clearly the deal that was struck is no longer in play and so we will be working with individuals at Foxconn and of course with [the Wisconsin Economic Development Corp.] to figure out how a new set of parameters should be negotiated," Evers said in a statement.

For its part, Foxconn said it remains committed to the project, adding that construction at the main Racine, Wis., complex will begin in earnest this summer.

"Foxconn's commitment to job creation in Wisconsin remains long term and will span over the length of the Wisconsin Economic Development Corporation contract and beyond," the company said in a statement late last week.

Updated with statement from Foxconn.

Comments

  • Reply 1 of 15
    DigitallyPhysicalDigitallyPhysical Posts: 3unconfirmed, member
    We are loyal to our creator. 
  • Reply 2 of 15
    Ha, ha, ha, ha. This could have been seen from miles away when it was first announced. 
    mdriftmeyern2itivguyronn
  • Reply 3 of 15
    christophbchristophb Posts: 1,461member
    FF to 6 months from now...

    "Foxconn's commitment to job creation in [the state Foxconn left Wisconsin for] remains long term and will span over the length of the 
    [the state Foxconn left Wisconsin for]  Economic Development Corporation contract and beyond,"
    mdriftmeyerronn
  • Reply 4 of 15
    mdriftmeyermdriftmeyer Posts: 7,305member
    I see all the Cons are silent as once more this entire cesspool of scum that is the GOP slowly reaches the tipping point towards the modern equivalent Whigs. When that fracture comes with these US Constitution Party, Libertarian Party, and every other bottom feeding ``branch'' that are closeted Republicans vie for the carnage the rest of us will move forward cleaning up the shat left behind.
    ronnfastasleep
  • Reply 5 of 15
    You know the republicans made this deal knowing full well that they would blame democrats for the eventual failure.  What’s so bad is that there are a bunch of people that who thought there was actually going to be 13,000 jobs paying $150k annually.  Why are so many people willing to believe con men selling snake oil?
    ronn1st
  • Reply 6 of 15
    racerhomie3racerhomie3 Posts: 1,160member
    America has wages that are too high. I bought a made in USA(& Mexico) otterbox case for my iPhone SE & it is more expensive than most other cases. I still love it , but USA needs to lower their living standard or they can’t compete with Vietnam , China or India. 
  • Reply 7 of 15
    Cannot trust the Chinese seems to be the message here. 
  • Reply 8 of 15
    ronnronn Posts: 334member
    I'm shocked! Shocked, I say!!!  ;)
    cornchip
  • Reply 9 of 15
    fastasleepfastasleep Posts: 3,171member
    America has wages that are too high. I bought a made in USA(& Mexico) otterbox case for my iPhone SE & it is more expensive than most other cases. I still love it , but USA needs to lower their living standard or they can’t compete with Vietnam , China or India. 
    Wow. You’re advocating that the US should downgrade to basically becoming a developing country so you can buy cheaper goods made here? This forum is crazy town. 
    edited April 24 StrangeDaysronncornchip
  • Reply 10 of 15
    You know the republicans made this deal knowing full well that they would blame democrats for the eventual failure.  What’s so bad is that there are a bunch of people who thought there was actually going to be 13,000 jobs paying $150k annually. 
    ronncornchip
  • Reply 11 of 15
    dewmedewme Posts: 2,162member
    It really looks like these cash-for-jobs deals are way too one-sided. I'd prefer that these agreements include a reciprocal investment on the other side that requires the other party/country to allow a US-based company to establish a deeper presence to build better market share in the other country. Not sure how this would work, but these cash-only deals too often end up like shady back-alley transactions with the US taxpayers ending up with an economic infection that needs even more tax revenue to recover from. 
    cornchip
  • Reply 12 of 15
    StrangeDaysStrangeDays Posts: 8,598member
    America has wages that are too high. I bought a made in USA(& Mexico) otterbox case for my iPhone SE & it is more expensive than most other cases. I still love it , but USA needs to lower their living standard or they can’t compete with Vietnam , China or India. 
    Or, rather than lower our living standard and worsen the lack of raises American workers have received compared to executive pay and rising pharmacy, medical, and insurance prices, we could...raise the living wages in those countries where there are tons of people living in third-world living conditions. Just a thought.
    ronncornchipfastasleep
  • Reply 13 of 15
    gatorguygatorguy Posts: 21,119member
    America has wages that are too high. I bought a made in USA(& Mexico) otterbox case for my iPhone SE & it is more expensive than most other cases. I still love it , but USA needs to lower their living standard or they can’t compete with Vietnam , China or India. 
    Or, rather than lower our living standard and worsen the lack of raises American workers have received compared to executive pay and rising pharmacy, medical, and insurance prices, we could...raise the living wages in those countries where there are tons of people living in third-world living conditions. Just a thought.
    +1. Worthy of a +10
  • Reply 14 of 15
    ronnronn Posts: 334member
    America has wages that are too high. I bought a made in USA(& Mexico) otterbox case for my iPhone SE & it is more expensive than most other cases. I still love it , but USA needs to lower their living standard or they can’t compete with Vietnam , China or India. 
    Or, rather than lower our living standard and worsen the lack of raises American workers have received compared to executive pay and rising pharmacy, medical, and insurance prices, we could...raise the living wages in those countries where there are tons of people living in third-world living conditions. Just a thought.
    That's what US unions are trying to do with NAFTA 2.0, the so-called US-Mexico-Canada (USMCA) trade agreement. They want guarantees that wages will rise and that there will be penalties for violations. President Obrador raised wages already. And he's working with the legislator on eliminating company unions that work (usually illegally) to keep wages low.
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