Foxconn Technology Group’s plans for a massive LCD manufacturing campus in Mount Pleasant have been dynamic and often controversial. Perhaps it should be no surprise a project championed by President Donald Trump and supported by billions in public money would become political fodder.
When analysts asked Gale Klappa, executive chairman of Milwaukee-based WEC Energy Group Inc., to make sense of all the headlines surrounding the project in April, he had a simple message for them: “Ignore the rhetoric and look precisely at what’s happening on the ground.”
The challenge for project observers is that looking at what is happening on the ground provides ammunition for both Foxconn’s supporters and its detractors.
Supporters will point out Foxconn and its construction contractors have moved millions of cubic yards of dirt since spring 2018 to prepare the site. Crews began pouring foundations for the first manufacturing facility in June and bid packages for the building’s enclosure, landscaping and support operations should be awarded in the coming months.
The first manufacturing facility is a nearly 1 million-square-foot building that will also require several support facilities. Even in the quickly developing I-94 corridor between Milwaukee and Chicago, a project of this size is a significant development.
But given the project was originally announced as a 20 million-square-foot campus, critics say Foxconn has a long way to go to live up to the initial hype of the 2017 announcement.
The project also got off to an inauspicious start in 2019.
To start with, the company informed state officials in January that its 2018 hiring fell short of the minimum required under its $3 billion incentive contract. With 178 of the required 260 jobs, Foxconn said it would not seek any state incentives for last year.
Supporters saw the announcement as proof the contract protects state taxpayers, since Foxconn had fallen short of its targets and would not receive around $9.25 million in tax credits available for 2018. Critics pointed out the company was already coming up short of its lofty job creation promises and questioned if it would ever deliver.
Then a few weeks later, questions about the project emerged again after top Foxconn executive Louis Woo told Reuters, “In Wisconsin, we’re not building a factory.”
The company responded to the report by detailing a series of projects it planned to build in Mount Pleasant over the next 18 months. Some of the projects could be considered a factory, but none were an LCD fabrication facility – the centerpiece of the original announcement.
A few days later – after talks with the White House and a personal conversation between Trump and Foxconn founder Terry Gou – Foxconn said it would move forward with an LCD factory in Mount Pleasant after all.
By March, Foxconn officials said construction on the LCD fabrication facility would begin this summer. At an April contractor information session, a top executive with the project’s general contractor promised a busy year with the release of bid packages and site work ramping up.
Work has continued to progress on the Mount Pleasant site, but the project also continues to make news, including the possibility of renegotiating parts of the state’s contract with Foxconn. Gov. Tony Evers first mentioned the possibility during a news conference in mid-April, saying the deal struck in 2017 by then-Gov. Scott Walker clearly was “no longer in play.”
Republican leaders criticized Evers, arguing he was undermining the project, but Foxconn said it was open to new ideas while remaining committed to creating 13,000 jobs in Wisconsin.
The next week, Evers released a letter suggesting Foxconn’s Woo was the first to bring up the idea of a changing the deal.
Foxconn’s contract includes $1.5 billion in tax credits for job creation and another $1.35 billion for capital investment. The company has to hit aggressive hiring timelines to be eligible for the jobs credits, and the investment credits can be prorated if the company falls short on jobs.
When Foxconn originally announced its plans for Wisconsin, the company planned to build a Gen 10.5 LCD fabrication facility intended to make 65- and 75-inch LCD screens. The company has instead opted for a smaller Gen 6 plant that provides more product flexibility.
Foxconn plans to begin production at the new facility – which will support 1,500 jobs – by the end of 2020.
Evers pointed to the changing plans in a July 8 letter to Wisconsin Economic Development Corp. secretary Mark Hogan as a reason the deal should be reevaluated.
“Foxconn’s present plans offer details through the end of 2020 and reflect a substantially smaller footprint, less capital investment and fewer manufacturing workers than its original plans,” Evers wrote.
“Because the project has evolved substantially from what was originally proposed, evaluated and contracted for, it is necessary to review the revised aspects of the project and evaluate how changes can most fairly benefit both the company and our state,” Evers said.
Asked for an update on any contract talks, WEDC spokesman David Callender said the state and company have ongoing discussions, but declined to outline a timeline for any potential changes.