During a Thursday ceremony in Wisconsin, President Donald Trump will no doubt call this week’s groundbreaking of Foxconn’s 20 million-square-foot complex that will make LCD panels an example of how his administration is “making America great again.” That may be true for the citizens of Wisconsin in the long-run, but right now it has become a far costlier proposition than once imagined, according to The Wall Street Journal.
The new U.S.-based Foxconn factory that government officials said could produce up to 13,000 new jobs is costing Wisconsin taxpayers more than initially announced. The new $10 billion mega-plant that’s set to break ground in southeastern Wisconsin includes $1 billion in new incentives. That’s on top of the $3 billion state and local officials had already promised to Foxconn, which happens to be Apple’s No. 1 manufacturer.
The extra $1 billion going to Foxconn comes from municipalities who added their own sweeteners to land the plant. The town and the county where the facility will be built, Mount Pleasant and Racine County, offered a $764 million incentive package. Wisconsin then added another $134 million to the tab to improve state highways and local roads in the area around the Foxconn site.
For its part, Foxconn says it is “fully committed to this significant investment and to meeting our contractual obligations with the relevant government agencies.” In doing so, CEO Terry Gou has promised to pay back part of the costs to the state if the company doesn’t fulfill its promises.
The company is responsible for paying back the rest of the costs.
Nearly $2.85 billion of the first incentives includes tax credits that only kick in once Foxconn fulfills its promise on hiring and capital investment and $150 million in sales-tax exemptions. The facility is expected to create 3,000 new jobs initially and as many as 13,000 jobs at a later stage.