Worldwide electronics leader Foxconn Technology Group (富士康科技集團) breached terms of its contract in Wisconsin, while local governments spent hundreds of millions of US dollars to prepare for the project, a lawsuit filed by a real-estate development company alleges.
Hintz Real Estate Development Co claims that Foxconn, known as Hon Hai Precision Industry Co (鴻海精密) in Taiwan, is in breach of its contract by failing to construct a 10.5G LCD manufacturing facility in southeast Wisconsin not far from the Illinois border, the Milwaukee Journal Sentinel reported on Wednesday.
Foxconn did not employ local workers in manufacturing and construction “to the extent agreed,” and failed to make capital investments in the county and village “to the extent agreed,” the lawsuit filed on Tuesday in Racine County Circuit Court said.
Photo: Reuters
The county and the Village of Mount Pleasant have spent US$200 million on land acquisition, US$185 million on the development of water and sewer lines, and US$12 million on roads to prepare for the project, the lawsuit said.
The lawsuit was brought by Caledonia resident Daniel Hintz and Hintz Real Estate Development. It was filed on behalf of Racine County and the Village of Mount Pleasant, but it also names the county and the village as the defendants along with Foxconn.
Foxconn said in a statement that it does not comment on lawsuits.
“Foxconn continues to fulfill its financial obligations under the local development agreement and is proud to be the largest taxpayer in the Village of Mount Pleasant and Racine County,” the company said.
Wisconsin landed plans for Foxconn’s first US factory after then-governor Scott Walker offered more than US$3 billion in tax incentives, but the company’s plans were later scaled back.
The original plan was for Foxconn to build a 10. 5G LCD facility, capable of building large screens, but the project was scaled back to a 6G facility.
That size factory makes smaller screens for smartphones, tablets and televisions.
In the original agreement, the state agreed to provide up to US$2.85 billion of tax incentives if Foxconn met certain hiring and capital investment thresholds.
The state has yet to award the company tax credits for those purposes, but local governments have spent millions of taxpayer dollars on infrastructure upgrades.
Foxconn and the Wisconsin Economic Development Corp have been negotiating a new contract for which Foxconn is willing to agree to fewer tax credits “in exchange for flexibility.”
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