In new deal, Wisconsin slashes controversial Foxconn subsidies 30-fold

The state of Wisconsin has negotiated a dramatically scaled-back deal with Taiwanese contract manufacturer Foxconn. The move, announced Tuesday by Democratic Gov. Tony Evers, is a repudiation of a deal negotiated four years earlier by Evers’ Republican predecessor Scott Walker.

The original deal envisioned Foxconn spending as much as $10 billion to manufacture a state-of-the-art factory for manufacturing large liquid-crystal display panels. The deal was announced in 2017, and then-President Donald Trump traveled to Wisconsin for the 2018 groundbreaking, describing the new factory as “the eighth wonder of the world.” Foxconn was supposed to get $2.85 billion in state and local incentives under that original deal.

The deal may have been savvy politics for Foxconn in 2017. The company uses factories in other countries to assemble consumer electronics products for Apple and other American companies—products that are often then sent back to the United States for sale. So Trump’s protectionist inclinations seemed like a serious threat. Announcing plans to create of thousands of jobs in a key battleground state gave Trump something to boast about, and that may have helped Foxconn curry favor with the new administration.

But before long, it became clear that Foxconn wasn’t going to hold up its end of the bargain. The company was supposed to build a factory based on the LCD panel industry’s new Generation 10.5 standard, which uses enormous sheets of “mother glass” that are roughly 10 feet (3 meters) square. Each glass sheet is typically cut into several displays for use in large televisions. Making panels that large requires a large factory—the original deal envisioned Foxconn hiring as many as 13,000 workers in Wisconsin by 2032.

The new deal acknowledges that Foxconn’s presence in Wisconsin will be much smaller. The agreement asks Foxconn to spend only $672 million on a factory that will employ only 1,454 people by 2025. And the state will only offer Foxconn $80 million in incentives—a thirtyfold reduction from the original incentive package.

Evers described the new package as “a better deal for our state.” According to Reuters, Evers also “stressed that the incentives were in line with those available to any company.”

According to The Wall Street Journal, “The old contract required Foxconn to build a specific type of screen-making facility in Mount Pleasant, 25 miles south of Milwaukee.”

Now, Foxconn will have a greater ability to adjust its plans to changing market circumstances. Last month, Foxconn chairman Young Liu suggested that the company might manufacture electric cars in Wisconsin, though no specific plans have been announced.