Foxconn plant Trump hailed as ‘8th wonder’ loses huge tax credits

A Foxconn manufacturing plant US President Donald Trump hailed as the “eighth wonder of the world” may not get the billions of dollars in tax credits it was expecting from the state of Wisconsin.

Wisconsin officials told Foxconn Technology Group, the world’s largest electronics manufacturer, that it won’t qualify for state tax credits unless it strikes a new deal that reflects its scaled-back factory complex.

Trump had heralded the original deal as a sign of a revitalised American manufacturing economy, calling the proposed plant “transformational”. But state officials have told Foxconn since last year that it would not qualify for the tax credits without revisions to its 2017 contract because the scope of the envisioned factory has been reduced.

Foxconn signed a contract with Wisconsin under then-Governor Scott Walker in 2017 to earn nearly $4bn in state and local tax incentives for a $10bn display screen manufacturing campus and plant that would employ up to 13,000 people. Trump announced the Foxconn deal at a White House ceremony and travelled to Wisconsin in 2018 for the groundbreaking.

But after the deal was signed, Foxconn said it was downsizing the factory to what is known as a Generation 6 plant rather than a Generation 10.5 plant. The facility envisioned now would make smaller, thin-film transistor liquid crystal display screens for mobile phones and other devices, rather than the larger screens that were first proposed.

The letter sent Monday from Wisconsin Economic Development Corp Secretary Melissa Hughes confirmed that from the state’s perspective, Foxconn’s new factory can’t get state tax credits unless the original contract is changed.

Foxconn spokeswoman Myranda Tanck had no immediate comment.

Hughes said in the letter to Jay Lee, the vice chairman of Taiwan-based Foxconn, that “Foxconn’s activities and investments in Wisconsin to date are not eligible for credit.”

“As we have discussed numerous times, markets, opportunities and business plans can and often need to change,” Hughes said in the letter. “I have expressed to you my commitment to help negotiate fair terms to support Foxconn’s new and substantially changed vision for the project.”

The state, in a separate communication, told Foxconn that because the company is not building the factory envisioned in the contract, the state cannot calculate job creation or capital investment tax credits.

“Once Foxconn is able to provide more accurate details of the proposed project, such as its size, scope, anticipated capital investment, and job creation, WEDC would be able to offer support for the project with tax incentives as it does for many large and small Wisconsin businesses,” Hughes wrote.

Wisconsin State Representative Gordon Hintz, the Democratic minority leader and a longtime critic of the project, said the announcement “cements Foxconn’s legacy in Wisconsin as one of broken promises, a lack of transparency, and a complete failure to create the jobs and infrastructure the company touted in 2017.”