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Turns Out Foxconn's Incentive-Laden Wisconsin Facility Won't Be A Massive Factory After All

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Turns Out Foxconn's Incentive-Laden Wisconsin Facility Won't Be A Massive Factory After All
Foxconn senior adviser Chris Murdock, former Wisconsin Gov. Scott Walker, President Donald Trump, Foxconn CEO Terry Gou and former Rep. Paul Ryan at Foxconn's WIsconsin groundbreaking in June 2018

The state of Wisconsin is paying $4B in incentives to Foxconn, but what it is getting in return has changed considerably.

The Chinese electronics manufacturer will no longer be manufacturing large liquid-crystal display panels at the complex it is building in southern Wisconsin, Reuters reports. Foxconn CEO Terry Gou's special assistant Louis Woo told Reuters that most of the 20M SF facility — promised to cost $10B — would be devoted to research labs and specialty product assembly.

"We're not building a factory," Woo told Reuters, labeling Foxconn's current plan as a technology hub.

Three-quarters of the 13,000 workers Foxconn promises to hire will be engineers and researchers, Reuters reports, rather than the blue-collar manufacturing jobs President Donald Trump expected when discussing Wisconsin's deal to land the facility in 2017. Woo labeled them "knowledge jobs," and said that while Foxconn's target remains 13,000 total jobs, the pace of hiring will be much slower than originally projected.

Initial plans called for 5,200 workers to be employed by 2020, but Foxconn has reduced that projection to around 1,000, according to Reuters. Gov. Scott Walker claimed the $4B in tax breaks, among other benefits, was supposed to return $30B in investment from Foxconn, a number the company distanced itself from. As Foxconn's ambitions shrunk for the project, Wisconsin's public costs ballooned, and less than 18 months later, Walker lost his bid for re-election.

When Long Island City in New York and National Landing in Northern Virginia were named as the locations for Amazon HQ2, the tax breaks promised were considerably less than what Wisconsin gave to Foxconn and more directly tied to performance incentives. But even at lower cost, questions remain about the wisdom of giving public subsidies to land one massive company — as they did even before the Foxconn deal was struck.