Taiwanese manufacturing giant Foxconn dramatically scales back US factory that was heavily touted by former President Donald Trump
Foxconn has mostly abandoned a planned $10 billion factory project in the US state of Wisconsin that was heavily promoted by former US President Donald Trump.
The Taiwanese electronics manufacturer dramatically scaled the $10 billion Wisconsin project that was to create 13,000 jobs, and now will only make a $672 million investment, CNBC reported. Even worse, only 1,454 new jobs will eventually be created.
The scaling back of the project is notable, considering that in 2018 President Trump had called the project “the eighth wonder of the world” and a sign of the rebirth of American manufacturing.
The revised deal was announced last week by the Wisconsin Economic Development Corp on its website, in which governor Tony revealed the US state had renegotiated its contract with Foxconn, saving Wisconsin taxpayers a total of $2.77 billion compared to the previous contract.
That initial contract had faced local opposition over concerns of the size of taxpayer concessions to a foreign company, and an agreement for extensive water rights and the acquisition and demolition of houses.
The state will reduce the tax credits authorised for the project to $80 million, down from $2.85 billion.
The original Wisconsin package had included local tax incentives and road and highway investments by state and local governments, which brought total taxpayer-funded subsidies to more than $4 billion, it is reported.
As of 2019, the village where the Foxconn plant is located had paid just over $152 million for 132 properties to make way for the factory, plus $7.9 million in relocation costs, it was reported.
The factory was supposed to be a 20-million-square-foot manufacturing campus in Wisconsin that would have been the largest investment in US history for a new location by a foreign-based company.
However in the end only 550 jobs out of the 13,000 jobs have to date been created.
The factory was supposed to build flat-panel display screens for TVs and other devices, but critics pointed out that its location put it some distance away from the suppliers needed to manufacturer these items.
At the moment, CNBC reported that the factory only makes servers, communications technology products and medical devices in Wisconsin.
The Foxconn-Wisconsin factory deal had been announced to great fanfare at the White House, with President Trump boasting of it as an example of how his “America First” agenda could revive US tech manufacturing.
The deal made sense for Foxconn, as it was a way for the Taiwanese firm to build goodwill at a time when Trump’s hostile trade policies posed a threat.