(ATF) Taiwan electronics manufacturer Foxconn is drastically scaling back a planned $10 billion factory in the state of Wisconsin, upending a key plank of former president Donald Trump's vision of 'America First' and a return to domestic manufacturing.
Foxconn, formally named Hon Hai Precision Industry Co, promised in 2017 to bring 13,000 new jobs to Wisconsin. The deal to create a new factory in the US was praised by Trump as the "eighth wonder of the world" and as proof of his ability to bring jobs back home.
But under a deal with the state announced on Tuesday, Foxconn will reduce its planned investment to $672 million from $10 billion and cut the number of new jobs to 1,454 from 13,000.
A filing with the Wisconsin state economic development division showed Foxconn employed about 600 people in 2019 in the region, according to a CNBC report.
On Tuesday, Wisconsin Governor Tony Evers announced the state had renegotiated its contract with Foxconn, saving Wisconsin taxpayers $2.77 billion.
The Foxconn-Wisconsin deal was first announced to great fanfare at the White House in July 2017, with Trump boasting that it was an example of how his "America First" agenda could revive US tech manufacturing.
For Foxconn, the investment promise was an opportunity for its charismatic founder and then-chairman, Terry Gou, to build goodwill at a moment when Trump's trade policies threatened the company's cash cow: building Apple's iPhones in China.
Foxconn, the world's largest contract manufacturer of electronic devices, proposed a 20-million-square-foot manufacturing campus in Wisconsin.
It was supposed to build cutting-edge flat-panel display screens for TVs and other devices and instantly establish Wisconsin as a destination for tech firms.
However, most suppliers were located near the Mexican border, far from Wisconsin.
Industry executives, including some at Foxconn, were highly sceptical of the plan from the start, pointing out that none of the crucial suppliers needed for flat-panel display production were located anywhere near Wisconsin.
The plan faced local opposition too, with critics denouncing a taxpayer giveaway to a foreign company and provisions of the deal that granted extensive water rights and allowed for the acquisition and demolition of houses through eminent domain.
Under the deal announced by the governor on Tuesday, Wisconsin would no longer offer up to $2.85 billion in performance-based tax credits or taxpayer-funded subsidies of more than $4 billion.
As of 2019, the village where the plant is located had paid just over $152 million for 132 properties to make way for Foxconn, plus $7.9 million in relocation costs, according to village records obtained by Wisconsin Public Radio and analysed by Wisconsin Watch.
Shares in Hon Hai fell as much as 1.6% on Wednesday, underperforming the broader Taiwan market, which was down 0.7%.
With reporting by Reuters