Apple Inc (NASDAQ:AAPL) supplier Hon Hai Precision Industry Co, Ltd (OTC:HNHPF), better known as Foxconn, failed to secure state tax credits at its Wisconsin facility for 2019 as it was unable to reach the slated job creation targets, Reuters reported Monday.
What Happened: This is the second year in a row that Foxconn has missed the target.
The state’s economic development agency Wisconsin Economic Development Corporation reportedly sent a letter to company Vice Chairman Jay Lee, saying, Foxconn is not anywhere near manufacturing large-screen televisions in the state as it had promised.
The iPhone maker's plans would have led to the creation of 13,000 jobs at its site in Mount Pleasant, which involved building a $10 billion, 20-million-square-foot campus, the letter stated. According to WEDC, Foxconn's plan for the Wisconsin factory "are now unclear."
The electronics manufacturer told Reuters it met the criteria for tax credits as it had employed more than 520 full-time workers.
“WEDC’s determination of ineligibility during the ongoing discussion is a disappointment and a surprise that threatens good faith negotiations,” Foxconn said.
Why It Matters: The campus was held as an exemplar of the largest foreign investment at a new location by President Donald Trump's administration, noted Reuters.
The lack of job creation may reportedly bear an impact on the upcoming presidential elections as Wisconsin is a key swing state.
Wisconsin Governor Tony Evers, a Democrat, has sought to renegotiate the $4 billion in tax breaks extended to Foxconn by his Republican predecessors after taking over in 2019, as per Reuters.
Price Action: Hon Hai OTC shares closed almost 0.9% higher at $5.55 on Monday.
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