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Foxconn making changes to massive factory project (UPDATE)

FILE - In this June 28, 2018, file photo, President Donald Trump, center, along with Wisconsin Gov. Scott Walker, left, and Foxconn Chairman Terry Gou participate in a groundbreaking event for the new Foxconn facility in Mt. Pleasant, Wis. Foxconn Technology Group said Wednesday, Jan. 30, 2019 it is shifting the focus of its planned $10 billion Wisconsin campus away from blue-collar manufacturing to a research hub, while insisting it remains committed to creating 13,000 jobs as promised. (AP Photo/Evan Vucci, File)

President Donald Trump breaks ground on the Foxconn facility on June 28 alongside former Gov. Scott Walker and Foxconn Chairman Terry Gou in Mt. Pleasant. Foxconn said Wednesday it is shifting the focus of its planned $10 billion campus away from blue-collar manufacturing to a research hub, while insisting it remains committed to creating 13,000 jobs as promised. (AP File Photo/Evan Vucci)

By SCOTT BAUER
Associated Press

Foxconn Technology Group said on Wednesday it is changing its plans for its $10 billion Wisconsin campus, shifting the project away from being a blue-collar factory toward becoming a research hub, while insisting it remains committed to creating 13,000 jobs as promised.

The much-ballyhooed plant was heralded by President Donald Trump and former Wisconsin Gov. Scott Walker as a once-in-a-generation opportunity to bring manufacturing back to the Midwest and the United States. Foxconn, a major supplier to Apple, is the world’s largest contract maker of electronics and the largest private employer in China.

In a statement on Wednesday, Foxconn said it remains committed to the project, the creation of 13,000 jobs and “to our long-term investment in Wisconsin.” But because the global market that existed when the project was first announced in 2017 has shifted, “this has necessitated the adjustment of plans for all projects, including Wisconsin.”

Foxconn previously said it would spend as much as $10 billion on the project, but did not recommit to that number Wednesday. But Wisconsin leaders said Foxconn has repeated to them its commitment to spending that much.

Louis Woo, special assistant to the Foxconn chief executive, Terry Gou, told Reuters that the company is scaling back and possibly shelving its plans to build liquid-crystal-display panel screens in Wisconsin.

“In terms of TV, we have no place in the U.S.,” Woo told Reuters. “We can’t compete.”

Woo said a factory would not be built in Wisconsin: “You can’t use a factory to view our Wisconsin investment.”

Instead, Woo said Foxconn wants to establish a “technology hub” that would consist largely of research centers along with packaging and assembly operations. Woo said about three-quarters of the jobs created will be in research and development and design, rather than blue-collar manufacturing.

Marc Levine, senior fellow and founding director of the University of Wisconsin’s Center of Economic Development, called it “one enormous bait and switch.”

“It seems clear that, whatever Foxconn eventually develops in Wisconsin, this will look nothing like the project that Scott Walker and his cronies … sold to the public,” Levine said in an email.

He called the idea of Foxconn’s developing a research-and-development operation “fanciful” and said it was “highly, highly unlikely” that it would lead to 13,000 research jobs.

Foxconn said in its statement that it was broadening its investment in Wisconsin to ensure the company and its workforce will be positioned for long-term success. Its priorities include research and development in advanced industrial-internet technologies and the production of high-tech applications for schools and medical, entertainment and sports, security, and “smart” cities projecs, Foxconn said.

“Every step of the way Foxconn has overpromised and under-delivered,” Assembly Minority Leader Gordon Hintz, a Democrat, said in a statement. “This news is devastating for the taxpayers of Wisconsin. We were promised manufacturing jobs. We were promised state of the art LCD production. We were promised a game-changing economic opportunity for our state. And now, it appears Foxconn is living up to their failed track record in the U.S. — leaving another state and community high and dry.”

The Taiwanese company initially billed its massive 20 million-square-foot Wisconsin campus as the first site in North American where it would produce the sort of next-generation liquid-crystal-display panels that can be used in a wide variety of products, including large-screen TVs, self-driving cars and notebooks and other sorts of monitors.

Wisconsin state and local governments promised roughly $4 billion to Foxconn, the largest incentive in state history and the biggest pledged by a state to a foreign corporation in U.S. history. In return, Foxconn was required to spend $10 billion and create 13,000 jobs.

It hired 178 full-time employees rather than the 260 targeted in 2018, failing to earn a state tax credit worth up to $9.5 million.

The president of Wisconsin’s Technology Council, Tom Still, said he’s not surprised that Foxconn wants to change course since televisions are becoming less expensive and iPhone sales are declining.

Still said he’s not worried Foxconn will leave, noting the company has already invested as much as $200 million in Wisconsin. He said Foxconn can succeed if it places a priority on subjects of research and development that match up with Wisconsin’s strengths — such as robotics, medical imaging, and industrial imaging.

Wisconsin Republican legislative leaders who pushed the Foxconn project said they blamed the state’s new Democratic governor, Tony Evers, for Foxconn’s changing plans.

Assembly Speaker Robin Vos and Senate Majority Leader Scott Fitzgerald said Foxconn was responding to the “wave of economic uncertainty” caused by Evers. Evers was critical of Foxconn in his campaign against Walker, but did not pledge to undo the deal. Republicans also said Foxconn was likely unsettled by Evers’ support for all-but eliminating a manufacturing tax credit to pay for reducing taxes for people in the middle class.

Evers’ top aide, Joel Brennan, said in a statement that the administration was “surprised” by the news and had talked to Foxconn officials about the development. He did not discuss Republicans’ accusations that Evers was to blame.

Democratic critics, including Evers, said the incentives promised to Foxconn were too rich and questioned whether the company would ever fulfill its promises. They also said the company’s plans to pull water from Lake Michigan for its manufacturing operation posed serious environmental risks.

 

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