MADISON — 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 Mount Pleasant facility.
In a letter sent Friday to Wisconsin Economic Development Corp., Foxconn attorney Robert Berry said “of significant concern is the WEDC’s position regarding material terms and timelines.”
On Oct. 12, WEDC told the Foxconn it had been denied billions of dollars in state tax credits until officials with the company come to the table to draw up a new contract. The company was told late last year it would not receive subsidies until a new agreement was reached.
“Despite frustrations and disappointment with WEDC’s decision and the method chosen by the WEDC to inform the Recipients of its determination, it is the Recipients’ intention to continue to work with the WEDC in good faith to resolve this disagreement within the next 30 days in a manner that benefits interested parties, including Racine County and the Village of Mount Pleasant,” Berry said.
WEDC responded by saying that it is still ready and willing to work with Foxconn, but that Foxconn still needs to be clear about “its evolved project.” Also, as of Friday afternoon, WEDC Secretary Melissa Hughes said that “WEDC has not received the basis for Foxconn’s objection to WEDC’s determination that the company is ineligible for state tax incentives...
“Once Foxconn is able to detail the scope and nature of its evolved project, WEDC stands ready to work on crafting a new agreement that balances the company’s needs with the interests of Wisconsin taxpayers.”
Local reaction
Mount Pleasant Village President David DeGroot didn’t weigh in on either side — state or Foxconn — in light of the news. While noting that Foxconn has lived up to its local obligations, he didn’t say anything about what was going on at the state level.
“The Village of Mount Pleasant and Racine County continue to work collectively with both Foxconn and the State of Wisconsin as the two work toward an amicable solution,” DeGroot said in an email to The Journal Times. “In the meantime, the company continues to fulfill its financial obligations under the local development agreement—which is separate and apart from the state contract.”
Jobs
This year would have marked the state’s first payment of refundable tax credits to Foxconn. The company fell 82 jobs short of the minimum required to claim state tax credits in 2018.
Foxconn said it created more than 800 jobs in 2019, above the 520 minimum needed for state subsidies. Under the contract the goal was to have 2,080 full-time jobs and more than $3.3 billion in capital expenditures by the end of 2019. Foxconn’s jobs report this summer also identified more than $415 million in capital investments — a considerable difference from the $280 million reported by Foxconn in April.
Earlier this month, Foxconn founder Terry Gou said that the company “will remain committed” to the project in Wisconsin “as long as policymakers at the federal, state, and local levels remain committed to Foxconn.” Gou’s comment came out after The Verge published a story detailing employees in Milwaukee who were hired but given few-if-any things to do. “The office began to fill with people who had nothing to do. Many just sat in their cubicles watching Netflix and playing games on their phones,” the report said.
Investments
Gov. Tony Evers has repeatedly been criticized by conservatives for putting up roadblocks to the project, while others have responded by saying Foxconn has continued changing its plans in Mount Pleasant and has not been forthcoming about what it is doing here.
State officials have said tax subsidies agreed to in the original contract are tied to jobs and capital investment for specific projects, which Foxconn is failing to deliver. Foxconn’s contract calls for a Generation 10.5 facility that would build larger panels for TV screens, but the project has downsized to Generation 6, which would manufacture small screens for mobile phones, tablets, notebooks and wearable devices.
Under the contract, signed in 2017 by former Gov. Scott Walker, Foxconn would earn incentives totaling as much as $3 billion over 15 years if the company reached the 13,000-employee benchmark and made a $10 billion capital investment in the state.
Wisconsin has not yet doled out any tax subsidies to the company, but a recent state estimate shows that the Foxconn project has cost the state nearly $237 million so far in state and local road improvements, sales and use tax exemptions, grants to local governments and for worker training and employment.
Foxconn officials have estimated that the company has invested $750 million in the state.