Commentary: Foxconn, what’s up?

Last updated on July 2nd, 2019 at 09:11 pm

Wisconsin’s deal with Foxconn has been getting a lot of negative media attention lately, including the recent cover of Bloomberg Businessweek with the headline, “Did Foxconn Con Wisconsin?”

It’s too early to give up on the Foxconn deal or to call it a “disaster,” as some have.

But it’s not too early to be concerned about the changing nature of the project and the lack of detail provided by the company.

In a 2017 announcement at the White House, Foxconn chairman Terry Gou said the company would build a $10 billion, LCD 8K+5G manufacturing complex in Wisconsin. It could eventually have 13,000 employees, then-Gov. Scott Walker said.

To attract Foxconn, Walker and the Republican-controlled Legislature approved $3 billion in state incentives, tied to job creation and capital investment. Another $1.5 billion was committed in local incentives and infrastructure upgrades.

Foxconn selected a site in Mount Pleasant and work there began last spring. Initial plans called for 15 buildings, including a generation 10.5 LCD fabrication facility (to make huge display screens).

Then, in May 2018 a Nikkei Asian Review report said Foxconn was changing its plans and would not make large LCD screens in Wisconsin. Foxconn called the report “inaccurate.”

But in June Louis Woo, special assistant to Gou, told BizTimes the company would build a Gen 6 plant in Mount Pleasant (not a Gen 10.5 plant as originally planned) to make smaller screens. The change gave the company more flexibility and removed the need to have a Corning glass plant on-site.

Part of the justification for the Foxconn subsidies was, in addition to the thousands of jobs it would create, there would also be a massive supply chain creating thousands of additional jobs. Dropping plans for the glass plant was significant.

But Woo said Foxconn would still create 13,000 jobs and invest $10 billion in the state. Construction work progressed in Mount Pleasant and the first building was completed.

Then in late January, Reuters reported that Foxconn was reconsidering plans to make LCD panels in Wisconsin. The company is creating a technology hub in Wisconsin with research facilities, the report said. Foxconn said it needed to make changes to the project to adjust to global economic shifts, but remains committed to creating 13,000 jobs in Wisconsin.

The company also detailed its Mount Pleasant construction plans for the next 18 months, listing no LCD fabrication plants.

Two days later, Foxconn issued another statement saying after consulting with the White House, including a personal conversation between President Donald Trump and Gou, the company actually would move ahead with plans for a Gen 6 LCD fabrication facility.

What’s going on here? Foxconn has moved quickly while only providing generalities of its evolving plans. It seems like the company is still trying to figure out what it’s going to do here.

Wisconsin taxpayers, who have so much invested in this project, deserve a more detailed explanation.

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Andrew is the editor of BizTimes Milwaukee. He joined BizTimes in 2003, serving as managing editor and real estate reporter for 11 years. A University of Wisconsin-Madison graduate, he is a lifelong resident of the state. He lives in Muskego with his wife, Seng, their son, Zach, and their dog, Hokey. He is an avid sports fan and is a member of the Muskego Athletic Association board of directors.

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