Foxconn Loses Bid for Tax Credits on Factory Trump Touted
(Bloomberg) - Foxconn Technology Group's application for tax credit from Wisconsin for a factory there has been denied by the state. The electronics manufacturer fell far short of the promises it made three years ago for the proposed $ 10 billion plant.
In a letter to the company on Monday, the Wisconsin Economic Development Corporation wrote that Foxconn has not made the large TV billboards described in the original contract, has not invested the promised amount in the plant, and has not even deployed the minimum number of people receiving the subsidies need.
The decision is a blow to Foxconn, also known as Hon Hai Precision Industry Co., which announced the high-profile deal with US President Donald Trump in July 2017. The leading iPhone maker promised to bring 13,000 factory jobs to Wisconsin for billions in government subsidies. At a groundbreaking ceremony in June 2018, Trump praised the planned factory as "the eighth wonder of the world".
Under the agreement, Foxconn had to invest 3.3 billion US dollars and create 2,080 full-time jobs by the end of 2019, the state authority said. Instead, the manufacturer employed fewer than the at least 520 people and, according to the agency's review, invested around 300 million US dollars. Foxconn's "activities are smaller in terms of scale and economic impact on the region and the state of Wisconsin" than were forecast when the facility was originally approved, the state agency said in its letter. The Verge previously reported on the decision.
If Foxconn wanted to work with the agency, the company would have to amend the current agreement to "adjust the size and scope of the tax credit incentive to the size and scope of the actual business activity taking place," the letter said.
"Once Foxconn is able to provide more specific details of the proposed project such as size, scope, expected capital investment and job creation, WEDC could provide tax incentives to the project, as is the case for many large and small businesses in Wisconsin "Said Missy Hughes, the secretary of the state agency for economic development, in a letter to the company. "After visiting the project two weeks ago, I can see that there are many opportunities for Foxconn's future success in Wisconsin and I look forward to working with you on that success."
(Updates with comments from the civil servant in the last paragraph.)
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