Gov. Tony Evers announced Tuesday afternoon that the state has reached a new agreement with Foxconn, which has delivered only a fraction of their $3 billion promise they made with the state four years ago.
Evers says the new deal will save taxpayers $2.77 billion and protect millions of dollars in infrastructure investments throughout the entire state.
Foxconn can earn $80 million in performance-based incentives under the contract if the company invests $672 million into their operations in the state by 2026, and hires 1,454 qualified workers earning an average wage of $53,875. Special tax incentives for WEDC projects can also be earned if the hiring and capital targets are met.
“When I ran to be governor, I made a promise to work with Foxconn to cut a better deal for our state — the last deal didn’t work for Wisconsin, and that doesn’t work for me,” Evers said in a release.
The deal also allows Foxconn to earn those incentives without specific requirements as to what it produces or manufactures, as long as it meets the hiring and capital investment targets.
The economic investments of the new contract will go towards a project that locates and operates a technological ecosystem. If this project goes unpaid, the agreement allows the state to recover 100% of incentives paid each year.
“In response to unforeseeable economic conditions, Foxconn began formal negotiations with a desire to lower taxpayer liability in exchange for the flexibility to pursue business opportunities that meet market demand,” said Foxconn Vice Chairman Dr. Jay Lee in a press release.
In 2017, former Gov. Scott Walker and Foxconn struck up a deal to build a Generation 10. The plant was supposed to eventually employ 13,000 people, with a state contract worth up to $2.85 billion in refundable state tax credits and up to $10 billion in capital investment if the company hit the goals it had set.
Originally, Foxconn planned to build a 10.5-generation LCD manufacturing facility capable of making large screens, before scaling back to a Gen 6 facility to make smaller screens for TVs, smartphones and tablets, which now sits empty in Milwaukee. The project has cost the state over $400 million.
The 1,450 jobs Foxconn says they will create in the new deal is only about 11% of the original promise, and the $672 million they are promising to invest is just 6.7% of the first $10 billion projection.
“This project and commitment to our state is a transformational opportunity for our Wisconsin, and I am proud to support these family supporting jobs,” Republican Sen. Dan Feyen said in a release. “The contract amendment will protect taxpayers while providing state incentives that make the Foxconn’s changing future in Wisconsin possible.”
The new agreement also shortens the states partnership with Foxconn by seven years, setting an end date of December 31, 2025, instead of December 2032.