Foxconn’s Terry Gou Says Big Wisconsin Project Hinges on State Aid

(WSJ) Foxconn Technology Group founder Terry Gou said the company’s commitment to a multibillion-dollar factory investment in Wisconsin hinges on whether government officials deliver promised support for the project.

In statement Monday U.S. time, Mr. Gou also acknowledged that the timing and scope of the project had changed since the project was unveiled to great fanfare three years ago.

Together, the comments were Mr. Gou’s most explicit yet that the project could be scaled back and might not be completed if state officials don’t come through with promised aid. They come a week after Wisconsin officials denied Foxconn’s request for the first payments in what had been envisioned as $3 billion in state subsidies for the technology complex.

“Foxconn will work as a partner with those who treat the company as a partner,” Mr. Gou said in a statement released by the company. “Foxconn will remain committed to the completion and continued expansion of our project and investment in Wisconsin as long as policy makers at the federal, state, and local levels remain committed to Foxconn.”

The office of Wisconsin Gov. Tony Evers and the Wisconsin Economic Development Corp., the group that negotiated the original contract, didn’t immediately respond to a request for comment.

State officials said in an Oct. 12 letter that Foxconn had failed to create enough jobs to receive subsidies in 2019 and that the scope of the project had changed so much that it must draw up a new contract to qualify for future subsidies.

The Taiwan-based company had initially planned to build a liquid-crystal display factory to produce large-screen televisions and other devices but has since scaled back its ambitions to a smaller facility that would make smaller touch screens.

“As we have discussed numerous times, markets, opportunities and business plans can and often need to change,” wrote Wisconsin Economic Development Corp. Secretary and CEO Missy Hughes in the letter addressed to Foxconn Vice Chairman Jay Lee. “I have expressed to you my commitment to help negotiate fair terms to support Foxconn’s new and substantially changed vision for the project.”

Foxconn said last week it has hired more than 500 people and has spent $750 million in Wisconsin, including $500 million dollars invested in the manufacturing park, adding that it has been in negotiating with the development agency to draw up with a new contract.

The company, a major supplier to Apple Inc., initially said it expected to have created 2,080 jobs at the plant by the end of 2019 and to have invested $3.3 billion, according to the development agency. Instead, the company had hired fewer than the minimum 520 required for subsidies and invested $300 million, the WEDC said.

This summer, the company applied for what would have been its first round of subsidies under the deal after it missed employment targets in 2018 and didn’t apply. The company claimed to have hired 550 people in 2019, but the state said in documents accompanying the letter that only 281 qualified.

“Market conditions and the Covid-19 pandemic have altered the timing of our expansion, the specifics of our manufacturing plans, and our product lines have changed,” Mr. Gou said Monday.

Source: Wall Street Journal 

Foxconn’s Terry Gou Says Big Wisconsin Project Hinges on State Aid Foxconn’s Terry Gou Says Big Wisconsin Project Hinges on State Aid Reviewed by TechCO on 10/21/2020 Rating: 5

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