Exclusive: Foxconn is considering plans to create LCD panels on the Wisconsin plant

(Reuters) – Foxconn Technology Group is considering making advanced liquid crystal display panels on a $ 10 billion Wisconsin campus, saying it intends to hire most engineers and scientists instead of the production staff project originally promised.

The announcement at a witness ceremony in 2017 marked the 20 million square meter campus the largest greenfield investment by a foreign company in American history and was recognized by President Donald Trump as evidence of his ability to revive US production.

Foxconn, who received controversial state and local incentives for the project, first planned to produce advanced large screen displays for TVs and other consumer and professional products on site under construction. It later said it would build smaller LCD screens instead.

Now these plans can be scaled back or even shelf, Louis Woo, special assistant to Foxconn's CEO Terry Gou, Reuters told. He said the company still evaluated options for Wisconsin, but cited the steep cost of creating advanced TV screens in the US, where labor costs are relatively high.

"In the case of television, we have no place in the United States," he said in an interview. "We can't compete."

When it comes to the production of advanced displays for TV, he added: "If a certain screen size has greater access, whether from China or Japan or Taiwan, we must also switch."

Instead of focusing on LCD production, Foxconn wants to create a "technology hub" in Wisconsin that would largely consist of research facilities along with packing and assembly, Woo said. It will also produce specialized technical products for industry, healthcare and professional applications, he added.

"In Wisconsin, we're not building a factory. You can't use a factory to see our Wisconsin investment," Woo said.

Earlier this month, Foxconn, a major provider of Apple Inc., was intent on creating 13,000 jobs in Wisconsin, but said it had reduced the pace of hiring. The company basically said that it is expected to employ about 5,200 people by the end of 2020; A business source said that the figure now appears to be close to 1000 employees.

It is unclear that as many as 13,000 employees will be hired.

But Woo, in the interview, said that about three-quarters of Foxcon's any jobs would be in R&D and design – what he described as "knowledge" positions – instead of labor workers. Foxconn is formally known as Hon Hai Precision Industry Co.

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

He said it would represent a supply chain that fits in with Foxcon's current "floating, good business model."

Heavily criticized in a few quarters, the Foxconn project was marked by former Wisconsin governor Scott Walker, a republican who helped secure around $ 4 billion in tax evasion and other incentives before leaving the office. Critics of the deal, including a number of Democrats, called it a corporate mission that would never result in the promised production jobs and posed serious environmental risks.

The company's own growth forecasts and employment targets suggest that taxpayers' investment will take at least 25 years to repay, according to the budget mindset Wisconsin Budget Project.

Foxcon's CEO Gou plans to meet Wiscon's new democratic governor Tony Evers, a former critic of the deal, later this year to discuss changes to the agreement, according to the source familiar with the company's thinking.

Evers could not be reached for comment.

To qualify for tax credits, Foxconn must meet certain employment and capital investment goals. It fell in the employment target in 2018 – employing 178 full-time jobs instead of the 260 targeted – not achieving a tax credit of up to $ 9.5 million.

The company may be willing to abandon future incentives if it fails to meet Wiscon's job creation and capital investment requirements, according to the source familiar with the case.