U.S. Governement Subsidy to Foxconn Wisconsin Plant Faces Concerns
At the forefront | Foxconn ’s U.S. factory, which has been recruiting dissatisfaction, has finally reached the standard, and now it wants the government to honor its subsidy promises. But money may not be available.
On April 10th,At the forefront | Foxconn ’s U.S. factory, which has been recruiting dissatisfaction, has finally reached the standard, and now it wants the government to honor its subsidy promises the Wisconsin Foxconn plant, which once caused controversy in the US Democratic Republic, finally announced that it had reached the recruitment target it had set. Now it needs the state government to honor its promise and provide tens of millions of dollars in economic subsidies.
A document published by Jay Lee, vice chairman of Foxconn, said that by the end of 2019, the company had directly employed more than 600 employees in Wisconsin, 550 of which met the requirements of the company’s economic development contract with Wisconsin, enough to receive subsidies. According to the agreement, if Foxconn can hire at least 520 people at the end of last year, it will meet the minimum standard for receiving subsidies.
The company also stated that to date, the project has cost more than US $ 280 million. If the figures for work and capital expenditure prove to be correct, Foxconn will receive about US $ 50 million in subsidies and tax credits. This marks its first step in collecting $ 4 billion in subsidies.
In 2018, to promote local employment, the Wisconsin government promised to give Foxconn $ 4 billion in subsidies, including: 2.85 billion income tax relief (due to investment and job creation); 150 million business tax relief; 764 million government incentives; 134 million To improve the roads near the factory.
Of course, the premise of giving money is that Foxconn will complete the “Flying Eagle Plan” in the state, that is, to bring Wisconsin 10 billion US dollars of investment, create 13,000 jobs, and the investment period is 4 years. Layout industries include panels, batteries, LED packaging, semiconductor packaging, cloud, big data, AI artificial intelligence, machine components, etc.
Driving 13,000 people in employment is nothing to Foxconn. After all, a factory in Zhengzhou has more than 250,000 people. But for Wisconsin, which has a small population and low wages, it is already a difficult goal to achieve. This is also the difficulty for Foxconn to recruit people locally.
Although Trump and Guo Taiming personally participated in the ground-breaking ceremony on the day of the construction of the factory, Trump also excitedly praised the factory as “the eighth wonder of the world”, but it turned out to be difficult to recruit people. At the end of 2018, Foxconn employed only 156 employees in Wisconsin, and was unable to fill a plant in Zhengzhou. Therefore, they did not receive subsidies in 2018.
Later, the size of the plant and the business to be done were also reduced. The “10.5th generation” factory that was originally promised to be built became the “6th generation” factory, and the planned “giant LCD panel” became a smaller panel.
The promised things can’t be done, and the American Democratic and Republican parties are fighting against it. The Republican Party that originally pushed for an agreement with Foxconn lost its actual control of Wisconsin in 2019, and the skeptical Democrat Anthony Evers succeeded Republican Scott Walker as governor. , Wisconsin returned to the Democrats. When the state passed the Foxconn Act, the voting result was 0 votes from the Democratic Party and all votes from the Republican Party.
Evers has not been very satisfied with the business, and is not quite sure whether the Democratic Party is really willing to hand over the money. Last year, the Evers government said that the scale of the project has been greatly reduced and no longer meets the agreement negotiated by former Governor Walker, and therefore no longer eligible for subsidies.
The state government said that before deciding whether to subsidize, they still need to spend several months to audit the investigation.
One interesting thing is that during the epidemic, Foxconn seemed to find a new job for this American factory. On April 8, Foxconn announced that it has established a partnership with healthcare giant Medtronic to produce ventilators in Wisconsin.
Global ventilators are still in short supply. The main reason is that under normal circumstances, the hospital usually does not need to reserve so many ventilators, but the epidemic has greatly increased the demand and the supply is difficult to keep up with. Omar Ishrak , CEO of Medtronic, said his company has tripled the production of ventilators. However, there is still a serious shortage of ventilators.
Although neither side clearly stated how much they wished to produce, this cooperation must be of great significance to both companies.
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