Foxconn Technology Group's plant in Wisconsin, praised in June 2018 by US president Donald Trump as an example of economic recovery, has failed to create enough jobs last year to earn tax credits, The Verge reported on Monday.
Wisconsin's Economic Development Corporation (WEDC) said in a letter to Foxconn's vice-chairman, Jay Lee, the Mount Pleasant factory fell short of its job targets proposed in 2017, namely the firm's promise to create 13,000 jobs in the state.
The company, which manufactures products for Apple Inc, has 'unclear' plans for its factory, according to the WEDC.
The Trump administration praised the $10bn campus totalling 20m square feet as the nation's largest investment in history for a foreign company's facility.
— Dan Kohl (@DanKohlWI) October 12, 2020
But the misstep is widely viewed as a failure of Trump's economic revival in Midwestern states key to the president's 2016 campaign platform, according to the report.
Trump promised to create 13,000 jobs in the state, but the contract was later renegotiated to just 1,500 and a smaller factory and also failed to meet the 260 staff requirement for receiving subsidies in 2018, the Verge reported.
Gov Tony Evers [D-WI] was tasked with the deal to offer Foxconn $4bn in tax incentives, among others, after taking office after Gov Scott Walker's departure last year, but planned to renegotiate the deal with the Taiwanese firm.
But Foxconn said in a statement it had hired over the minimum to receive the tax credits, stating: “WEDC’s determination of ineligibility during ongoing discussion is a disappointment and a surprise that threatens good faith negotiations".
“Once Foxconn is able to provide more accurate details of the proposed project, such as its size, scope, anticipated capital investment, and job creation, WEDC would be able to offer support for the project with tax incentives,” Missy Hughes, WEDC secretary and chief executive wrote in a statement.
Most US Business Have No Plan to Relocate to US - AmCham Survey
President Trump's plans to bring back jobs to the US amid the ongoing trade war, namely by working with Taiwanese tech firms, has seen its first major stumbling block after the failed Foxconn deal.
Taiwan Semiconductor Manufacturing Comp (TSMC) also announced plans to build a new factory in Arizona, worth $12bn and 1,600 jobs in the state, after Trump blocked Huawei Technologies from access to key chipmakers.
Roughly 70 percent of firms said they had no plans to relocate, the survey said.
A second survey of 250 US businesses found around 75 percent believed tariffs in Washington's trade war with China were harming their competitiveness in the mainland.
But US commerce secretary Wilbur Ross told Fox Business that the COVID-19 pandemic would help bring jobs back to North America, despite the comments later drawing heavy criticism.