Report says Foxconn thinking about using Chinese workers in Wisconsin; company denies it
The Wall Street Journal reported Tuesday that Foxconn “is considering bringing in personnel from China” to help staff its Wisconsin manufacturing operations — a report Foxconn quickly denied.
Citing “people familiar with the matter,” the newspaper said Foxconn Chairman Terry Gou “is looking to company engineers in China to transfer” to Wisconsin. Gou is upset that few have volunteered to move if called upon, the newspaper said.
“We can categorically state that the assertion that we are recruiting Chinese personnel to staff our Wisconsin project is untrue,” Foxconn said in a statement.
“Our recruitment priority remains Wisconsin first and we continue to focus on hiring and training workers from throughout Wisconsin. We will supplement that recruitment from other US locations as required.”
The Wall Street Journal report came on an election day that will decide a tight race between Wisconsin Republican Gov. Scott Walker and Democratic challenger Tony Evers, the state superintendent of schools.
Foxconn and the billions in public money it stands to receive have been issues in the contest.
Walker vigorously pursued Foxconn as Wisconsin competed with other states to land the Taiwan-based electronics manufacturer and its stated plans to build a multi-billion-dollar, liquid crystal display factory in the U.S.
With Walker leading the state’s effort, Foxconn chose Wisconsin for what it has said will be a $10 billion manufacturing complex supported by 13,000 Wisconsin jobs. Work on the factory site, in Mount Pleasant, is underway.
If Foxconn meets those investment and hiring targets, the company stands to receive about $3 billion from Wisconsin taxpayers. Also supporting the firm’s project is $764 million from local government — money expected to be repaid by property taxes on the manufacturing complex — along with $140 million from utility ratepayers for new electrical infrastructure and an estimated $134 million in state funding for local road projects tied to Foxconn.
Evers has criticized the state’s contract with Foxconn, calling it “a horrible deal.”
While Foxconn said Tuesday that it is not recruiting Chinese personnel to Wisconsin, the state’s contract with the company appears to allow it to earn tax credits if foreign workers should be employed here.
If such people worked in Wisconsin for the benefit of Foxconn’s operations in Mount Pleasant, they apparently would qualify for the firm to earn tax credits equaling 17 percent of the employees’ pay.
“We did not see anything in the contract or in state law that would prohibit credits from being earned by individuals from another country relocating and working in Wisconsin” for the benefit of the Mount Pleasant operations, said Sean Moran, program supervisor with the nonpartisan Legislative Fiscal Bureau.
Because Wisconsin waives almost all taxes on manufacturing profits, the tax credits Foxconn receives likely will actually be cash payments to the company.
The employment subsidies to Foxconn amount to more than $200,000 per job — far more than Wisconsin has provided other companies.
FULL COVERAGE:Foxconn in Wisconsin
Meanwhile, U.S. Labor Department records show that Foxconn has applied for work visas for a small number of people to work in Wisconsin.
According to the records, the company filed applications in the last federal fiscal year for 11 so-called H-1B visas for positions at the research and production plant Foxconn has leased in Mount Pleasant.
The H-1B program lets companies temporarily employ foreign workers in specialty occupations — generally those requiring at least a bachelor’s degree.
Foxconn applied for visas for people to fill positions as cost analysts, industrial engineers, manufacturing engineers and engineering managers.
The Labor Department records don’t show whether the visas were granted.
Changing plans
One source of controversy surrounding Foxconn has been the company’s changes in its plans.
The state and local contracts with Foxconn, signed about a year ago, say the company will build a “Generation 10.5” liquid crystal display plant. Such factories use huge sheets of glass to produce very large display panels used, for example, in 65-inch and 75-inch television sets.
In June, however, Foxconn said it instead first would build a smaller, “Generation 6” factory that produces smaller panels used in things like computer monitors and notebooks.
At the time, the company said it still planned to build the larger plant in a later phase. But in late August, Foxconn backed away from that assurance.
The company said it still planned “an advanced fab facility in the near future after completion of the first phase,” but added: “Whether is it Gen 10.5 or something else depends on the market and economic situations at the time.”
Foxconn has said it is responding to current and projected demand for display panels, and state officials have said they are not concerned about the change in plans.
The firm has said repeatedly that it still plans to invest $10 billion in its complex and create 13,000 Wisconsin jobs.
The projected nature of those jobs, meanwhile, has changed dramatically over the last 18 months.
In July 2017, a report by Foxconn consultant Ernst & Young, using Foxconn data, projected that 9,817 of the 13,000 jobs — about 75 percent — would be held by “hourly operators and techs.”
Some 2,363 employees, or 18 percent, would be engineers, the report said.
But by late March 2018, Foxconn executive Louis Woo said in an interview with the Milwaukee Journal Sentinel that plans had shifted and he expected that about a third of employees “would be more like assembly line workers, but two-thirds would be the knowledge workers.”
Five months later, the workforce ratio shifted still further toward the high-skill end. Speaking to The Journal Times, of Racine, in late August, Woo said that “now it looks like about 10 percent assembly line workers, 90 percent knowledge workers.” That same day, Woo told the Milwaukee Business Journal that “at least 80 percent would be engineers or R&D scientists.”