Foxconn, Walker sign deal for $10B factory
UPDATE, Nov. 10, 7:30 p.m. — Hours after the state legislature signed off on key contract terms, Wisconsin Gov. Scott Walker and Foxconn CEO Terry Gou have inked a deal solidifying the Taiwanese company's plans to invest $10 billion in a flat-panel display factory there, WISN reported. The deal, which will provide $3 billion in tax incentives for Foxconn, marks the largest such incentive package extended to a foreign company in U.S. history.
- A Wisconsin economic development board has agreed to critical contract terms that will grant $3 billion in cash incentives for Taiwan-based Foxconn Technology Group, the Associated Press reported. Wisconsin Gov. Scott Walker and Foxconn officials are expected to sign off on the contract terms as early as Friday.
- The contract requires Foxconn to invest at $10 billion in the construction and operation of a flat-panel display factory in Mount Pleasant, WI, and to create 13,000 jobs over the 15-year life of the incentive agreement. If the company fails to meet the specific investment and employment benchmarks identified in the contract, it will have to pay back the state tax credits.
- According to the contract's terms, if the company has to reimburse the state for disallowed tax credits, Foxconn CEO Terry Gou will be personally liable for 25% of the total amount.
The flat-panel facility will take up 1,200 acres of the total 2,900 acres Foxconn said it needs to build the factory and to account for future growth. Foxconn chose the Mount Pleasant site in early October, securing 90% of the 2,900 acres the company has said it needs to construct the factory and its associated developments.
Foxconn, however, has struggled to secure the remaining tracts of land from area homeowners pushing back against the prospect of relocating. The company, in response, has offered to pay $50,000 per acre to for some swaths of agricultural land.
Wisconsin is not the only state to open up its coffers in an attempt to attract manufacturing and other job-generating industries.
In 2015, South Carolina authorized borrowing $123 million to fund a $200 million-plus incentive package for Swedish automaker Volvo, in exchange for the company investing $500 million in a new automobile factory in Charleston-area Ridgeville, SC. Then, in September, Volvo announced that it would double its investment in the plant $1 billion and employ nearly 4,000 people. Part of the money the state offered up was allocated to infrastructure improvements around the factory.
In exchange for incentives from the state of Tennessee, South Korean electronics company LG has agreed to develop infrastructure around its new $250 million washing machine factory in Clarksville. The factory, which broke ground in September, will employ veterans and offer job training to local residents.
- U.S. News & World Report The Latest: Wisconsin Board Approves Foxconn Contract Terms