A report recently issued by the US State of Wisconsin pointed out that the Foxconn Wisconsin factory has deviated from the established plan. This report issued by the Wisconsin State Administration Budget and Finance Department confirmed that Foxconn did not build the 10.5-generation LCD factory specified in the contract. The company said the existing building is a smaller-scale 6th-generation LCD factory, but there is no sign Indicates that LCDs will be produced in the foreseeable future, "may be more suitable for demonstration purposes."

Picture: Foxconn Wisconsin factory

The report pointed out that Foxconn has obtained permission to use its so-called "factory" for storage. In addition, according to an industry expert, Foxconn has not yet ordered the equipment needed to produce LCD displays. The expert pointed out that if this building is used as an LCD manufacturing plant, it will be the smallest 6th-generation LCD plant in the world. "In the long run, it is more like a demonstration site than a viable business. ."

The analysis said that if any LCD-related manufacturing activities are to be carried out in the building, it is likely to be the final assembly of the components. Such a project has a much smaller impact on the local supply chain, and the number of workers employed is far less than the 13,000 expected in the contract between Foxconn and the government.

Wisconsin State Administration Secretary Joel Brennan said in an interview on Wednesday, local time, "It is clear that the 6th generation LCD factory discussed and built in Mount Pleasant is not the same as other 6th generation LCD factories in the world. The same." Brennan said that the state government issued this report to solicit opinions from industry experts in order to better understand the scope of Foxconn’s current projects and its potential impact on Wisconsin. Brennan said: "The criticism of the former Governor Walker's team is justified because they signed this contract but did not hire any industry experts from outside. This is to ensure that we can rely on the best professionalism inside and outside the state government. Knowledge to make the best possible decision."

The report fully explained the reasons why Wisconsin has so far refused to provide subsidies to Foxconn. Last week, the Wisconsin Economic Development Corporation (WEDC), which is responsible for overseeing the execution of the contract, refused to grant Foxconn the first tranche of the nearly US$3 billion reimbursable tax credit, based on the fact that it did not build the “10.5 generation LCD factory” as specified in the contract ".

According to the new analysis, Foxconn’s current projects cannot guarantee that the state government will pass the subsidy program at that time. The report said: "So far, taxpayers have fully fulfilled their obligations in the agreement, but the beneficiaries have not." In fact, "taxpayers in this state spend as much money on improving infrastructure as Foxconn." Earlier reports stated that state and local governments have invested at least US$400 million in the project, most of which is used for land and infrastructure that may never be used. By the end of 2019, Foxconn's capital expenditure was about 300 million US dollars.

It is not yet possible to predict whether the number of employees employed in the Foxconn project will reach the level stipulated in the contract. At the end of last year, the company only hired 281 qualified employees instead of the estimated 2,080 people. It did not even reach the 520 people needed to be hired to receive tax subsidies. By the end of 2022, Foxconn should have hired 13,000 workers. The survey found that Foxconn recruited a large number of local college students and foreign fresh graduates at the end of 2019, trying to reach the employment threshold required to obtain subsidies, but fired many employees as soon as the deadline passed. The report also pointed out that Foxconn’s employment has declined this year, and that “the number of hiring surged before the deadline for the work report in December last year, and then declined in the next few months.” Therefore, the report believes that Foxconn has failed to fulfill the number. Contract obligation to maintain a certain level of employment during the year.

For more than a year, Wisconsin has been warning that Foxconn’s current projects are not eligible for subsidies, but the company has so far refused to modify the contract. The two sides did not reach an agreement after the settlement period expired this summer. WEDC had previously expressed its willingness to modify the contract.

"I have expressed my commitment to you and I will help negotiate fair terms to support Foxconn's new vision that has undergone substantial changes," WEDC CEO Missy Hughes wrote after refusing to provide subsidies Letter to Foxconn, "The door of WEDC is still open to support your business expansion in Wisconsin."

Foxconn later issued a statement denying that it hired employees only to obtain tax subsidies.

Foxconn said, "Foxconn's business development in Wisconsin is like a growing trouble for a person, in which it is necessary to explore new business opportunities to adapt to changing global customer needs and the ever-developing global technology industry."

Foxconn stated that it is still committed to expanding its business in Wisconsin, but WEDC's refusal to subsidize "threatened" the "good faith" regarding the new contract.

Foxconn founder Guo Taiming said in a statement issued on the same day: "Foxconn will work with those who regard the company as a partner." "Foxconn will continue to work to complete and continue to expand our projects and investments in Wisconsin as long as Decision makers at the federal, state, and local levels continue to be committed to supporting Foxconn and promoting the company’s important technological development goals for investment, just as President Trump did.” (Chenchen)

Source: NetEase Technology Report, translated by Google Translate