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Exclusive: Foxconn revises plans to produce LCD panels at the Wisconsin mill

(Reuters) – Foxconn Technology Group is considering making plans to produce state-of-the-art liquid crystal displays on a $ 10 billion campus in Wisconsin, with the primary intention of employing engineers and researchers instead of employing originally promised production personnel ,

FILE PHOTO: Before the arrival of US President Donald Trump, a shovel and FoxConn logo can be seen when he cut the groundbreaking of Foxconn Technology Group for its LCD manufacturing facility in Mount Pleasant, Wisconsin, on June 28, 2018 , participates. REUTERS / Darren Hauck

A White House ceremony in 2017 announced the 20 million-square-meter campus, which represents the largest investment by a foreign company in US history and was praised by President Donald Trump as evidence of its ability to revive the American manufacturing.

Foxconn, which received controversial state and local incentives for the project, originally planned to produce advanced large screens for televisions and other consumer and professional products at the facility under construction. It later said that it would instead build smaller LCD screens.

Well, these plans could be scaled back or even postponed, said Louis Woo, Foxconn chief special secretary, Terry Gou, to Reuters. He said the company is still exploring options for Wisconsin, but citing the high cost of producing television screens in the United States, where labor costs are comparatively high.

"We have no place in the US for television," he said in an interview. "We can not compete."

When it comes to producing advanced television screens, he added, "If a certain screen size is larger, be it from China, Japan, or Taiwan, we also have to change. "

Instead of focusing on LCD manufacturing, Winconsin wants to create a" technology hub "in Wisconsin, consisting largely of research facilities, packaging and assembly operations, Woo said, adding that it also specializes in industrial technology products

"We do not build a factory in Wisconsin, you can not use a factory to look at our investment in Wisconsin," Woo said.

Earlier this month, Foxconn reiterated Major supplier to Apple Inc., however, said its intention to create 13,000 jobs in Wisconsin said it had slowed down its hiring pace, with the company initially expecting to employ around 5,200 people by the end of 2020. A corporate source said that Number is likely closer to 1,000 employees.

It is unclear when the full 13,000 work be set.

But Woo said in an interview that about three-quarters of Foxconn's possible jobs in R & D and design will be what he calls "knowledge" positions, not jobs in the manufacturing industry. Foxconn is officially known as Hon Hai Precision Industry Co.

. Instead of producing LCD panels in the United States, Woo said it would be more profitable to produce them in Greater China and Japan, bring them to Mexico for final assembly, and import the finished product to the United States.

He said that this would be a supply chain that fits Foxconn's current "flowing, good business model".

The Foxconn project has been heavily criticized. The Foxconn project was backed by former Wisconsin Governor Scott Walker, who helped secure some tax credits and other incentives amounting to about $ 4 billion before leaving office. Critics of the deal, including a number of Democrats, called it a corporate guarantee that would never lead to the promised jobs in manufacturing and pose serious environmental risks.

The company's own growth projections and employment targets indicate that the taxpayer's investment will take at least 25 years, according to the Wisconsin budget project.

Foxconn CEO Gou plans to meet with Wisconsin's new Democratic Governor Tony Evers, a previous critic of the deal, this year to discuss changes to the agreement, according to the source, who is familiar with the company's thinking.

Evers could not be reached for comment.

To qualify for tax credits, Foxconn must meet certain investment and investment goals. The employment target in 2018 was not achieved. There were 178 full-time jobs instead of the 260, who do not earn a tax credit of up to $ 9.5 million.

The company may be ready to circumvent future incentives if it is unable to meet Wisconsin's workplace and capital investment requirements, the source familiar with the matter.

Report by Jess Macy Yu in Taipei and Karl Plume in Wisconsin; Editing by Jonathan Weber and Paul Thomasch

Our Standards: The Thomson Reuters Trust Principles.

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