Wisconsin just denied Apple's biggest supplier a huge tax break after the company failed to build a factory that promised to bring thousands of jobs to the state

Katie Canales
·3 min read
foxconn apple wisconsin factory
A journalist photographs the site where President Donald Trump will speak later at the ground breaking for the Foxconn Technology Group on June 28, 2018 in Mt Pleasant, Wisconsin. Andy Manis/Getty Images
  • Wisconsin has rejected Foxconn's application for tax subsidies on the grounds that the electronics manufacturer has not built the factory that it had promised, The Verge reported Monday.

  • The company made a deal with the state in 2017 to build a facility that would produce large-screen TV displays and said it would create 13,000 jobs.

  • But the Wisconsin Economic Development Corporation rejected Foxconn's application for tax subsidies since it found that it had only hired 281 people by the end of 2019 who meet the qualifications listed in the contract.

  • Foxconn is Apple's biggest manufacturing partner, with a Chinese factory that produces well over half of the world's supply of iPhones.

  • Visit Business Insider's homepage for more stories.

Wisconsin has denied Foxconn, Apple's biggest supplier, a tax break after the electronics manufacturer failed to build a factory in the state, The Verge reported Monday.

The state made a deal with Foxconn in 2017 for a large LCD facility, dubbed a Gen 10.5 factory, to be built in the state that would create 13,000 jobs. In return, Foxconn would receive tax subsidies in increments, totaling around $4 billion.

But according to the Wisconsin Economic Development Corporation (WEDC), the company has yet to employ the number of people required for Foxconn to receive the subsidies, per the report. The agreement stipulated that Foxconn would need to have at least 520 people under employment by the end of 2019 to receive the tax subsidies. Foxconn claimed to have hired 550 people, but according to the WEDC, only 281 of them meet the qualifications listed in the contract. 

"The Recipients are ineligible for tax credits because of their failure to carry out the Project," the WEDC wrote in its letter to Foxconn, according to The Verge. "The fact that the Recipients have neither built, nor started to build or operate, the required Generation 10.5 TFT-LCD Fabrication Facility (the "10.5 Fab") is not in dispute."

Foxconn did not immediately respond to Business Insider's request for comment.

The agreement between Foxconn and Wisconsin has hit snags since its inception, but its failure to build the 20-million-square-foot factory remains the biggest sore point of the deal. The factory was originally intended to produce advanced large-screen TV displays, but after the company found that route to be too expensive, it changed its plans to instead manufacture smaller screens.

The company attempted to tweak its existing contract with the state to align with its updated plans, which would include a smaller factory and a much lower number of people employed there, but a revised deal was never made.

President Donald Trump visited the factory site in 2018 as the administration was moving forward with its call to reenergize manufacturing on American soil.

Foxconn is the largest iPhone maker in the world. Its massive manufacturing facility in Zhengzhou, China — otherwise known as "iPhone City," as Business Insider reported in 2018 — produces over half of the world's supply of the smartphones.

You can read the full report on The Verge here.

Read the original article on Business Insider