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Wednesday, October 28, 2020

Foxconn investment falls short

Taiwanese tech giant Foxconn has failed to live up to expectations as it falls short of fulfilling promises to employ thousands of people at an under construction manufacturing plant in Wisconsin.

Foxconn’s initial projections were for a $10bn investment into the plant, touted as the “8th wonder of the world” by President Trump.

The deal was supposed to eventually generate 13,000 new jobs but so far has brought less than 300, according to Wisconsin Officials.

As part of this deal the state awarded Foxconn significant tax breaks; a conditional incentive in return for creating thousands of new jobs that are, so far, well below initial targets.

This will mean state Officials will withhold said tax breaks just weeks ahead of the US election Polls, a blow to Trump, who championed the Foxconn deal back in 2017 as part of his “Make America Great Again” campaign.

The deal was meant to hail a return to US based manufacturing as part of the brighter economic future promised by the President.

But the project never seemed realistic with Louis Woo, special assistant to Foxconn boss Terry Gou commenting that high US labour costs would limit what they could manufacture.

Making advanced TV screens, for example, wouldn’t be cost effective. “In terms of TV, we have no place in the US,” he said. “We can’t compete.”

Wisconsin’s Democrats, State Representative Gordan Hintz chief among them, have highlighted the failing figures as proof of a deal gone wrong:

“This cements Foxconn’s legacy as one of broken promises, a lack of transparency and a complete failure to create jobs,” said Gordon in his criticism of the project. “Republican politicians should be held accountable.”

Foxconn released a statement last year claiming a global market change was responsible for the slow returns, stating it’s polices were being “adjusted to meet these new realities.”

“We remain committed to the Wisconsin Valley Science and Technology Park Project, the creation of 13,000 jobs, and to our long-term investment in Wisconsin. As we have previously noted, the global market environment that existed when the project was first announced has changed,” the company stated.

Sources:

https://www.bbc.co.uk/news/business-47062142

https://www.bbc.co.uk/news/business-54518246

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