Racine County welcomes Foxconn (copy)

A screen at the SC Johnson iMET Center welcomed Foxconn to Racine County last October. (PHOTO BY RACINE JOURNAL TIMES)

Taiwanese electronics manufacturer Foxconn on Wednesday emphatically denied a report that it may scale back its initial investment at a planned facility in southeastern Wisconsin.

The report, published Wednesday by the financial news publication Nikkei Asian Review, said Foxconn is considering producing smaller screens at the Wisconsin plant than originally planned in order to lower initial costs at its proposed $10 billion campus in Mount Pleasant. The article cited industry sources and people familiar with the matter.

"That report is inaccurate and is not based on any facts," said a statement released by Foxconn Technology Group. "Foxconn can categorically state that our commitment to create 13,000 jobs and to invest US$10 billion to build our state-of-the-art Wisconn Valley Science and Technology Park in Wisconsin remains unchanged. Foxconn is fully committed to this significant investment and to meeting all contractual obligations with the relevant government agencies."

Spokeswomen for Gov. Scott Walker and the Wisconsin Economic Development Corporation both referred reporters to Foxconn's statement. WEDC spokeswoman Kelly Lietz added that the agency is in "regular contact" with Foxconn. 

The Nikkei story was updated after its initial publication with a statement from Foxconn. 

Foxconn has promised to invest $10 billion to build an LCD panel manufacturing plant in southeastern Wisconsin that will create between 3,000 and 13,000 jobs. In exchange, the state will offer about $3 billion in refundable tax credits — the largest subsidy to a foreign company in U.S. history — delivered on a "pay as you grow" basis tied to job creation and capital investment benchmarks. If the company fails to meet certain benchmarks, benefits may be clawed back.

In addition to offering tax credits, Wisconsin has also agreed to relax some environmental regulations and change the process for legal appeals for the company. The state is expected to break even on the deal in 2043, according to an analysis by the nonpartisan Legislative Fiscal Bureau.

The Wisconsin facility had been expected to produce large LCD panels, primarily for televisions, but the Nikkei report said the company is now considering "making diversifying displays for cars, personal computers, tablets, mobile devices, televisions and niche products."

"Supply chain sources suggest the incomplete local supply chain was a big obstacle to Foxconn's previous plan to churn out large panels from a 10.5th-generation production line for TV screens in Wisconsin," according to the report.

But Foxconn officials said the company's product development and production plans for the Wisconsin campus have not changed. 

The company said it will construct its Wisconsin facilities in phases. The first phase will produce LCD panels to be used in TVs, self-driving cars, notebooks and monitors, "and in the fields of education, entertainment, health care, advanced manufacturing systems, office automation, interactive retail and safety, among many others."

The campus will also house facilities for "back-end packaging of liquid crystal display modules, molding and tool and die processes involved in the production of high-precision housing and frames for display modules, and final assembly for end-products," according to the company.

The Nikkei report cited an anonymous supply-chain source who said the production of large panels would require a glass company like Corning to set up a plant nearby. 

Corning CEO Wendell Weeks said last month that the company would not locate in Wisconsin without a subsidy of "two out of every three dollars" from the state or another source, while the company would "keep 100 percent of the revenues and profits."

WEDC CEO Mark Hogan told the Milwaukee Journal Sentinel the state would not provide any additional aid to Corning, but he added that Foxconn could share its subsidies with the glass company. 

Democrats were quick to criticize Walker over the Nikkei report.

Democratic Party of Wisconsin spokeswoman Melanie Conklin  said the Nikkei report is "another cause for serious concerns for Wisconsin taxpayers," and Sen. Jennifer Shilling, D-La Crosse, said the state's deal "has become an albatross instead of the golden goose Gov. Walker thought it would be."

Their comments came before Foxconn's response to the Nikkei report. 

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Jessie Opoien is the Capital Times' opinion editor. She joined the Cap Times in 2013, covering state government and politics for the bulk of her time as a reporter. She has also covered music, culture and education in Madison and Oshkosh.