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Foxconn reports enough spending, hiring for first $29 million in state tax credits
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FOXCONN | MOUNT PLEASANT PLANT

Foxconn reports enough spending, hiring for first $29 million in state tax credits

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Foxconn Technology Group has reported hiring enough employees and spending enough on the company’s southeastern Wisconsin facility that, if verified by the state, would secure the company more than $29 million in state tax dollars under the company’s new, significantly smaller contract.

Foxconn reports that it spent more than $542 million in direct expenditures for the Mount Pleasant plant — along with the creation of 970 total jobs — by the end of 2020, according to an economic development performance report the company filed with the Wisconsin Economic Development Corp. on June 30, which was obtained by the Wisconsin State Journal through a public records request.

After the report is audited by an independent third party, it will then need to be verified by WEDC before any state money is approved. WEDC will determine how many of the jobs listed by Foxconn meet eligibility requirements laid out in the updated contract, which was signed in April.

Under the new six-year contract, Foxconn could receive up to $80 million in state tax dollars as long as the Taiwan-based company creates 1,454 jobs and makes a capital investment of at least $672 million by 2026. If Foxconn’s $542 million in spending is verified by the state, it would represent 81% of the investment needed in the entire 6-year contract.

Wisconsin Gov. Tony Evers has reached a scaled-down deal with Foxconn -- one that will cut tax breaks by billions. 

Of the 970 jobs reported between 2018 and the end of last year, 364 have since been terminated. A WEDC spokesman said all reported jobs will go through the verification process to determine if they meet eligibility requirements in the contract.

Under the new agreement, Foxconn will be eligible for up to $29 million in job and capital investment credits if WEDC verifies that the company had 601 cumulative full-time employees in 2020. The state has until the end of the year to certify if the company had met its job creation target.

Foxconn and the state agreed to an amended contract in April that drastically reduced both the company’s jobs and capital investment requirement, as well as the state’s subsidy commitment to the project. The contract was ultimately renegotiated after the state told Foxconn it would not receive any state dollars under the previous agreement, as the project being constructed didn’t match what was agreed on.

Foxconn’s original contract, signed by former Gov. Scott Walker in 2017, called for a $10 billion investment by the company and the creation of 13,000 jobs over 15 years in exchange for $3 billion in state subsidies. Other state and local incentives, including $150 million in sales tax breaks that the company still could receive, brought the total to about $4 billion.

Millions invested

So far, Foxconn has not received any state dollars, but the project in Mount Pleasant already has cost the state more than $200 million in state and local road improvements, sales and use tax exemptions, grants to local governments and for worker training and employment. Foxconn has reported investing more than $850 million in the state.

Last year, Foxconn reported creating more than 800 jobs in 2019, above the 520 minimum needed for state subsidies under the previous contract. However, WEDC reported that only 281 of those jobs had been verified.

The company fell 82 jobs short of the minimum required to claim state tax credits in 2018.

Ultimately, WEDC officials determined Foxconn would not be eligible for any tax subsidies until the company and state agreed to a new contract.

Electric vehicles

While questions remain on what Foxconn plans to manufacture in Wisconsin, the company and California-based electronic car manufacturer Fisker have begun discussions with the state to potentially pave the way for electric vehicle production at the southeastern Wisconsin facility.

“As part of the site selection process, Foxconn and Fisker have engaged with the Wisconsin Economic Development Corporation to discuss plans for electric vehicle manufacturing. Foxconn and Fisker look forward to discussions with the WEDC,” Foxconn said in a statement Thursday.

WEDC officials do not comment on pending agreements or discussions until a formal contract is executed.

Under the company’s new agreement with the state, which is similar to other performance-based incentive packages provided to companies, Foxconn could earn tax incentives without specific requirements on what the company produces as long as it meets hiring and capital investment targets. The contract also memorializes the potential for future investment and added tax incentives from the state.

Keep up with the latest news on Foxconn in Wisconsin

Read more news coverage of Taiwanese electronics manufacturer Foxconn's decision to build a massive plant in Wisconsin.

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Foxconn Technology Group has challenged the state's decision earlier this month to refuse the Taiwan-based company's application for state tax subsidies for work taking place on the southeast Wisconsin facility.

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A bombshell report from The Verge provides a harsh look into the embattled Foxconn Technology Group project in southeast Wisconsin, which has — so far — failed to live up to promises made by the company nearly three years ago.

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As Wisconsin — much like the rest of the nation — continues to navigate the ongoing COVID-19 pandemic, which has forced businesses to shutter and unemployment rates to skyrocket, Trump entered a community all too familiar with economic hardship.

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WEDC Secretary Melissa Hughes said "Foxconn’s activities and investments in Wisconsin to date are not eligible for credit" under the contract first signed back in 2017.

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President Donald Trump's top trade advisor Peter Navarro praised Wisconsin's controversial Foxconn manufacturing project, despite lingering questions surrounding the Taiwan-based company's contract for billions in state tax credits.

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The company's $3 billion contract with Wisconsin remains in question after state officials in December told Foxconn it no longer was eligible for tax subsidies agreed to in the original contract because the project has changed too much.

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Taiwanese electronics manufacturer Foxconn could use its Wisconsin factory to build ventilators needed to treat COVID-19 patients, according to the CEO of a medical hardware company that designs and makes ventilators.

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Gov. Tony Evers' administration has told Foxconn it no longer is eligible for tax subsidies agreed to in the original $3.6 billion deal with Taiwan-based electronics manufacturer.

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There is no proof to suggest the Taiwan-based electronics giant has moved employees into the Capitol Square building it purchased from BMO Harris Bank for $9.5 million earlier this year. 

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The announcement comes a few weeks after UW-Madison reported receiving less than 1% of a $100 million commitment Foxconn made in August 2018.

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Foxconn's partnerships with UW campuses have seen mixed success so far, with a UW-Milwaukee program drawing more student participation than announced, but developments appearing to progress slowly at UW-Madison.

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Taiwan's main opposition party picked a pro-China populist mayor Monday as its candidate for the 2020 presidential race against an incumbent who often bashes Beijing.

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Gov. Tony Evers told CNBC during a June 27 interview posted online Tuesday that he believes the plant will have about 1,500 employees in place when production begins in May 2020.

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The Taiwanese electronics manufacturer announced in mid-April the pending purchase of the property, which is at the corner of Main Street and Martin Luther King Jr. Boulevard and will be renamed "Foxconn Place Madison."

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The meeting comes a day after Gou met with President Donald Trump to discuss updates to the southeast Wisconsin manufacturing project.

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CEO Mark Hogan also declined to say if Foxconn officials first approached the state about reopening its deal.

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Assembly Speaker Robin Vos on Thursday slammed the governor as "naive" and said it is highly unlikely the board of the WEDC would approve a change to the contract. 

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“The present contract deals with a situation that no longer exists," Evers said. 

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Terry Gou said he would make a decision "in a day or two" on a possible presidential bid, according to Taiwan's official Central News Agency.

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Foxconn made the announcement Friday morning at Monona Terrace. Representatives from BMO Financial Group and UW-Madison were also in attendance.

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A company statement said this marks the next phase of Foxconn's overall blueprint for its campus in Mount Pleasant. 

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Foxconn representatives did not answer a list of questions related to their partnership with Wisconsin’s flagship university.

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"If they can’t work with the university to get the development talent that they need, they can no longer operate and then the entirety of the deal could fall through," a Foxhounds member said. 

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The company is possibly interested in space at 1 W. Main St., which is currently owned by BMO Harris Bank.

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Bloomberg Businessweek interviewed 49 people familiar with the project, including company executives and former employees of the Racine County facility.

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Evers told reporters he discussed the topic with Foxconn officials but doesn't believe the company is concerned.

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Foxconn Technology Group reversed itself Friday saying it will construct a liquid-crystal-display manufacturing facility in southeast Wisconsin after President Donald Trump intervened amid news reports that put the future of the project in doubt.

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Nikkei Asian Review Thursday reported the Taiwanese iPhone assembler's "$10 billion investment in display production in the state of Wisconsin has been suspended and scaled back as a result of negotiations with new Gov. Tony Evers." 

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The future of Foxconn Technology Group’s $10 billion high-tech manufacturing campus in southeast Wisconsin was cast into uncertainty Wednesday…

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The figure falls short of the minimum 260 full-time jobs required under the state's contract with the company, meaning it will not receive any tax incentives this year.

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Evers, who has touted his support for a $15 minimum wage in Wisconsin, also said he's open to creating exceptions to a $15 wage in rural areas and for teenage workers.

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Foxconn Technology Group intends to invest $100 million in engineering and innovation research at UW-Madison that will help fund an interdisci…

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His visit comes as he criticizes Harley-Davidson's decision to move some production overseas and as Foxconn scales back the initial size of its facility.

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Foxconn says it's committed to spending $10 billion and creating up to 13,000 jobs.

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Gov. Scott Walker says the funds can be absorbed in the existing budget from savings on other projects.

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Foxconn CEO Terry Gou has agreed to back 25 percent of the tax credits deal should the company default on deal.

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The state would no longer regulate wetlands or air pollutants except when required under federal law.

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Gov. Scott Walker has signed a $3 billion incentive package designed to lure a Foxconn Technology Group flat-screen plant to southeastern Wisconsin.

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It would be the largest ever subsidy by a U.S. state to a foreign company.

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Gov. Scott Walker and Foxconn chairman Terry Gou signed the agreement on July 12. 

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Health care and education advocates and some Democrats are concerned how state incentives for Foxconn could affect the state budget.

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The electronics giant would build TVs and other devices here using imported LCD panels until its Wisconsin LCD plant opened in about 2020.

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The package of refundable tax credits and environmental regulation rollbacks now heads to the state Senate. 

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A liberal campaign watchdog group also is considering filing a complaint alleging Foxconn violated state lobbying rules. 

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Taxpayers will spend $1 billion more than the state receives in tax revenues for the first 15 years of the project, a state estimate shows. 

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Lawmakers will hear public testimony Thursday on a bill that gives Foxconn $3 billion in incentives. 

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Wisconsin taxpayers could be cutting checks to electronics manufacturer Foxconn sooner than 2020 if the company starts hiring scores of employees this year, the state jobs agency chief told the Wisconsin State Journal on Tuesday.

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Gov. Scott Walker wants to exempt the firm from laws designed to prevent environmental damage, flooding and harm to drinking water.

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Last week's Foxconn news was the rare announcement that won plaudits from both parties at the Wisconsin State Capitol.

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The legislation also provides $250 million in bonding for the rebuilding and expansion of I-94.

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For every ten jobs created at a massive electronics manufacturing campus planned to be built by Taiwanese tech giant Foxconn in southeastern Wisconsin, 17 more jobs will be created elsewhere in the state, an analysis shows.

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Gov. Scott Walker on Thursday assured critics of his deal with Taiwanese tech giant Foxconn that the massive bundle of taxpayer-funded incentives Wisconsin has offered the company to build here will be tied to job creation.

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The plant will create liquid-crystal display panels and could eventually employ as many as 13,000 people.

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Foxconn CEO and founder Terry Gou and Pres. Donald Trump were joined by Wisconsin Gov. Scott Walker, Speaker of the House Paul Ryan, Vice Pres…

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Dane County and much of Wisconsin could get a transformative economic boost if Taiwanese electronics giant Foxconn brings thousands of manufac…

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The package would not be included in the next state budget, a top lawmaker says.

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The Wisconsin Senate’s top Republican said Thursday that the Legislature may have to pass a bill to help induce a Taiwanese technology company to bring a plant to Wisconsin.

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Assembly GOP leaders, in a memo made public Wednesday, also urge business groups to offer their own ideas to resolve the state budget impasse.

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