Foxconn – a Taiwan-based manufacturing giant that cranks Apple’s iPhones, among other popular gadgets – is scaling back a planned $ 10 billion factory in Wisconsin.
Under an agreement with the state of Wisconsin announced on Tuesday, Foxconn will destroy its planned investment in the facility – which former President Donald Trump once called “the eighth wonder of the world” – for $ 10 billion to $ 672 million and new ones. The number cuts employ 13,000 to 1,454.
The Foxconn-Wisconsin deal was first announced with great fanfare at the White House in July 2017, with Trump giving examples of how his “America First” agenda could revive US tech manufacturing.
For Foxconn, the investment promise was a chance for its charismatic founder and then president, Terry Gow, to build goodwill at a time when Trump’s trade policies threatened the company’s cash cow: America’s Manufacture of Apple iPhones in China for export.
Foxconn, the world’s largest contract manufacturer of electronic devices, has proposed a 20 million-square-foot manufacturing complex in Wisconsin that would be the largest investment in American history for a new location by a foreign company.
It was to create state-of-the-art flat-panel display screens for televisions and other devices and immediately establish Wisconsin as a destination for tech firms.
But industry officials, including some from Foxconn, were highly skeptical of the plan from the outset, pointing out that none of the important suppliers needed to produce flex-panel displays were located anywhere near Wisconsin.
The plan also faced local opposition, with critics calling for a foreign company to be declared taxpayer cheaper and the provisions of the deal, giving wider rights to water and allowing the acquisition and demolition of homes through eminent domain was given.
By 2019, the village where the plant is located was paid more than $ 152 million for 132 properties to make way for Foxconn, according to village records obtained by Wisconsin Public Radio and analyzed by Wisconsin Watch. He was also paid $ 7.9 million in transfer costs.
Foxconn, formally called Honorable High Precision, said the new agreement gives it “the flexibility to pursue business opportunities in response to changing global market conditions”. The company said: “The original estimates used during negotiations in 2017 have changed at this time due to unpredictable market fluctuations.”
After dropping its plans for the enhanced display, Foxconn later said it would manufacture smaller, earlier-generation displays in Wisconsin, but the plan never came to fruition.
Prior to Tuesday’s announcement, Foxconn president Liu Young-told reporters in Taipei that the company currently manufactures servers, communications technology products and medical devices in Wisconsin, noting that “a promising future” in electric vehicles (EVs) is. He did not elaborate.
Liu previously stated that the infrastructure in Wisconsin was to build EVs because it is in proximity to the US traditional area of automating, but the company could also decide on Mexico.
Hon Hai’s shares fell as much as 1.6% on Wednesday morning, topping the broader Taiwan market, which was down 0.7 percent.
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