State Reviewing Foxconn Jobs Report
The review will determine whether the company is eligible for the tax credits.
Foxconn — and Wisconsin — are another step closer to learning whether the Taiwan-based company will qualify for a portion of the $3 billion in state tax credits that were part of the deal signed three years ago to bring the electronics manufacturer to Racine County.
A formal audit of the company’s 2019 jobs report was released Wednesday, a week after being submitted to the Wisconsin Economic Development Corp. But the audit doesn’t evaluate whether the company has met conditions set in the contract that former Gov. Scott Walker and the state signed with Foxconn in 2017.
That will be decided in the coming months as state officials review the audited report and compare it against the terms of that contract. The review might not be finished until the fall.
“WEDC and Foxconn continue to discuss aligning the contract with the project as it is now taking shape,” Rikkers stated. “We are in regular and active conversations with Foxconn to align the contract with the project. It is WEDC’s objective to do so in order to support the project.”
Repeated shifts in what Foxconn is doing and plans to do at its Mount Pleasant complex have cast doubt on whether the state job creation tax credits will be granted this year.
“The likelihood of them being eligible for anything — or hitting benchmarks or even knowing anything about what’s happening — don’t seem to be clear,” says State Rep. Gordon Hintz (D-Oshkosh), Assembly minority leader and a longtime skeptic of the project.
From his vantage point, Hintz says, “they are currently ineligible for any credits, even if they met thresholds [for job creation] because they’re out of compliance with the current contract.”
That 2017 contract called for the company to build a 22-million-square-foot plant employing 13,000 people to build Gen 10.5 liquid-crystal display (LCD) screens used in telecommunications products such as televisions, tablets and smartphones.
In 2018, the company was denied a jobs tax credit worth up to $9.5 million for its first year when it reported hiring 178 full-time workers, short of the target of 260 positions.
Foxconn later downgraded its plan for the Mount Pleasant factory to Gen 6 screens. That was a departure from the contract, state officials told the company in late 2019 in communications that were obtained by the technology news website The Verge.
Department of Administration Secretary Joel Brennan told the company in November 2019 that it had been “opaque about its project plans throughout 2018” and had not committed to an alternative project to the Gen 10.5 screens.
In addition to the $3 billion in state tax credits that are still on hold for the company, the village of Mount Pleasant and Racine County have already invested $911 million to help pay for the development of the factory site.
Meanwhile, Foxconn has several times announced changes in its plans for the Racine County factory. After the COVID-19 pandemic took hold earlier this year, the company announced plans to produce ventilators there in a partnership with the medical technology company Medtronic, through Foxconn Industrial Internet (Fii), a Foxconn business group.
Both because Fii was not included in the Wisconsin-Foxconn contract, and because ventilators had not been identified as a product in that contract, that project appears also not to qualify for tax credits.
Another Verge article in April 2020 asserted that Foxconn’s promised innovation centers around the state have been empty for more than a year.
The 2019 jobs report submitted April 1, for which the audited version has now been released and will go on to be flyspecked by the WEDC over the next several months, showed that 60% of the employees it hired last year joined the company in November and December. The cover letter for the company declared that as of the end of the year, Foxconn employed more than 600 people, and that more than 550 of them would meet qualifications for the tax credits in the state contract.
The audit report released Wednesday consists of verification of details in that report and their internal consistency with other business records. The letter from the audit team at the accounting firm Deloitte & Touche specifies that its findings do not address whether the information Foxconn has reported make it eligible or not for the state tax credits. “That determination rests with the parties to the Agreement, not the undersigned,” the letter states.
Reprinted with permission of Wisconsin Examiner.
If you think stories like this are important, become a member of Urban Milwaukee and help support real, independent journalism. Plus you get some cool added benefits.
- Mount Pleasant Approves Microsoft Deal on Foxconn Land - Evan Casey - Nov 28th, 2023
- Mount Pleasant Deal With Microsoft Has No Public Subsidies - Evan Casey - Nov 14th, 2023
- Microsoft, State Announce Massive Data Center Expansion, Land Purchase - Joe Schulz - Nov 11th, 2023
- Gov. Evers Announces Microsoft Makes Major Investment in Wisconsin - Gov. Tony Evers - Nov 10th, 2023
- State Can’t Regulate We Energies $100 Million Project for Microsoft - Joe Schulz - Sep 20th, 2023
- Foxconn Selling Green Bay, Eau Claire ‘Centers’ - Joe Schulz - Aug 16th, 2023
- Murphy’s Law: Foxconn Deal Is Still Costing Taxpayers - Bruce Murphy - Jul 6th, 2023
- Microsoft Will Pay $50 Million For Mount Pleasant Data Center Site - Evan Casey - Apr 20th, 2023
- Microsoft Data Center Proposed for Foxconn Land - Evan Casey - Mar 29th, 2023
- Foxconn, We Energies Building Solar Farm at Factory Campus - Joe Schulz - Mar 10th, 2023
Read more about Foxconn Facility here