Earlier this month, The Verge published an investigation checking in on the many “innovation centers” Foxconn had announced it would open in Wisconsin. Foxconn had promoted the buildings as part of its effort to turn the state into a technology hub employing 13,000 people, with the centerpiece being a heavily subsidized LCD factory on Lake Michigan. But as of early April, the buildings stood empty. Some hadn’t even been bought, and no one in Wisconsin seemed to know what was going on with them.
Just two days after The Verge’s report, Foxconn announced it was buying yet another building. Alan Yeung, Foxconn’s director of US strategic initiatives, said the story contained “a lot of inaccuracies,” and that the buildings are not empty but, people also shouldn’t be “climbing trees” to check, and that the company would issue a correction soon.
It’s now been two weeks since that announcement, and despite repeated requests for comment, Foxconn has yet to issue a correction or explain what inaccuracies Yeung was referring to.
It’s been a tumultuous two weeks for the Foxconn project in Wisconsin. First, Wisconsin Gov. Tony Evers expressed doubts that Foxconn would fulfill its promise to employ 13,000 people in the state and said elements of the deal should be renegotiated. Wisconsin Republicans were quick to attack Evers, with Assembly Speaker Robin Vos calling him naive and accusing him of rooting for the failure of the project. Yeung himself tweeted a cryptic and emoji-filled rebuttal of sorts:
Calm down. Probably fake news Who has the crystal ball to predict if 13,000 jobs will be created by the year 2032?— Alan S. Yeung (@alansyeung) April 25, 2019
Esp in April ‘19 https://t.co/P94H9V6Kw6
As it turns out, it was Foxconn, not the Evers administration, that first broached the possibility of revising the deal in a meeting last month. “Because of recent media reports, I also want to clarify aspects of the conversation from our March meeting,” Evers wrote in a letter made public this week. “At that meeting, you indicated that Foxconn intends to suggest several changes to the existing agreement to better align the terms with the evolving project and global marketplace.”
Foxconn later reiterated its commitment to its current contract outlining $10 billion in investment and employing up to 13,000 people, but it said it was seeking “flexibility” in the deal. At an event on Thursday, Yeung said Foxconn was speaking with the Wisconsin Economic Development Corporation “within the framework of the contract itself,” adding, “I think we need to take a deep breath and say tax credit is important, but we don’t make decisions based solely on tax credits.” He declined to elaborate on what changes the company was seeking.
Evers, meanwhile, says he hasn’t heard what changes Foxconn will push for, but he expects the company to submit proposals in the coming weeks. “I’m not going to make any guesses as to what their negotiating strategy should be or what they should be asking for,” Evers told The Associated Press.
Foxconn did not respond to questions about what aspects of the contract it wants to alter, or what Yeung’s tweet means.
One possible area for negotiation would be the annual hiring benchmarks Foxconn must meet to receive subsidies. It has already missed its 2018 hiring quota, employing only 178 full-time workers at the end of last year. To receive the maximum capital investment and employment tax credits this year, it must employ 520 workers, a goal that seems far off at the company’s current rate of hiring. At the same time, critics say the subsidy levels — potentially more than $400,000 per job at this stage in the contract — are too high.
When asked by the Milwaukee Business Journal about the negotiation process, Evers called those benchmarks “a great question.”