Foxconn Technology Group builds a large production complex in Mount Pleasant.
Foxconn could eventually receive $ 1.5 billion. as part of a total public grants package totaling about $ 4 billion.
In a letter to government officials released on Friday, Foxconn repeated his pledge to create 13,000 Wisconsin jobs linked to the massive factory and research complex it has begun building in Mount Pleasant.
At the same time, the company said it had changed the timing of its employment plans.
"While we are still committed to creating 13,000 jobs in Wisconsin, we have adapted our recruitment and hiring timeline," Foxconn executive Louis Woo said in the letter sent to Mark Hogan, Secretary and CEO of Wisconsin Economic Development Corp., and shared with Head of Government Tony Evers. "As a company of activities around the world, we must have the flexibility to adapt to a number of factors, including global economic conditions.
" We have done so while developing on other aspects of the project and achieving our key priority in 2018 – creates a solid foundation on which the Wisconsin project can continue to grow further. "Foxconn's adaptation to his" recruitment and recruitment timeline "is not the first time the company has changed its plans for what advocates have welcomed as a development project that will transform Wisconsin's economy, but critics have emptied as a boondoggle
In particular, the company has reduced its original plans for the liquid crystal factory at the heart of the project and first chooses to build a smaller, cheaper plant than the "Generation 10.5" facility specified in its contracts with the state and local community. .
After revealing the change plans in June in June, Foxconn initially said it still planned to build a Generation 10.5 factory or "fab" – the largest and most expensive type of plant in the display industry – in a subsequent stage.
To months later, when asked, the company refused to offer assurances that it would ultimately build such a plant. It should be noted that although it was still planned to build "an advanced fab facility" in another construction phase, the nature of this plant would depend on the market and the economic situation at that time.
Different Workforce Vision
Foxconn now also depicts a Wisconsin workforce that is dramatically different from the profile originally presented to government officials.
In July 2017, a report from a Foxconn consultant using company data estimated that about 75 percent of the 13,000 Wisconsin jobs would be held by "hourly-paid operators and techs." About 18 percent of the employees would be engineers, the report said.
But at the end of March 2018, in an interview with Milwaukee Journal Sentinel, Woo said the plans had moved and he expected about one-third of employees "would be more like fitter workers, but two-thirds would be that knowledge Five months later, the workforce shifted ever further towards the high-quality end. Speaking to the Journal Times, from Racine at the end of August, Woo said that "now it seems about 10 percent of assembly line workers, 90 percent of knowledge workers." On the same day, Woo told Milwaukee Business Journal that "at least 80 percent would be engineers or scientists and researchers."
FULL COVER: Foxconn updates
Foxconn said in his letter Friday, it has invested more than $ 200 million in Wisconsin so far, and awarded 95 percent of contracts so far to Wisconsin companies. The contracts have gone to 93 companies in 17 state counties, with nearly 16 percent to businesses owned by minorities, women or veterans, Foxconn said.
The company said that 854 people have been working on the construction of the Mount Pleasant complex, which Foxconn has said will eventually cost $ 10 billion, and which the company has named Wisconn Valley Science and Technology Park.
Sites elsewhere in Wisconsin
Foxconn in his letter also pointed to his off-site Wisconsin initiatives, including the purchase of buildings for "technology-focused innovation centers" in Green Bay, Eau Claire and Racine; Buying a downtown Milwaukee building where Taiwan-based company has located its North American headquarters; a veteran recruitment program a $ 100 million mortgage to the University of Wisconsin-Madison; participation with three other companies in setting up a venture fund of $ 100 million; support from the Wisconsin ginseng industry; and a $ 1 million "Smart Cities" competition.
Hogan, the WEDC Secretary, welcomes Foxconn for the initiatives not required by the state agreement.
"The update Foxconn offers today confirms the company's commitment to Wisconsin as evidenced by the significant investments far beyond the requirements of the WEDC contract, Hogan says in a statement." This transformation project will transform Wiscon's economy. education system and workforce as it brings the next generation of advanced manufacturing to the United States " As Hogan noted, the state's contract provides tax credits to Foxconn only when it meets the requirements for job creation and capital investment.
Foxconn was entitled not to receive more than $ 9.5 million in 2018 job creation – less than 1 percent of the $ 1.5 billion company ultimately could demand, due to "contract" provisions in the contract, Foxconn could still recover $ 9.5 million if it exceeded job goals for the following years in the 15-year agreement.
To get the full $ 1.5 billion in credits, the company must create 13,000 full time jobs averaging $ 53,875 per year. Foxconn could get an additional $ 1.35 billion in credits by investing $ 9 billion in its Mount Pleasant complex.
The tax credit is "refundable", which means that if Foxconn does not owe tax, it will still receive the money. Because Wisconsin waives almost all taxes on manufacturing surpluses in the state, it is likely that Foxcon's credits will be in the form of cash payments.
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