What do the next 18 months hold for Foxconn construction?

Gov. Scott Walker operates construction equipment in a training area at the Foxconn site.

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

Foxconn Technology Group’s plans for a $10 billion LCD manufacturing campus in Mount Pleasant were remarkable in 2017 and 2018 for a number of reasons. The sheer size and scale of the project was unlike anything else contemplated in the state’s history. The incentive packages offered up by state and local leaders matched that size and drew their own controversy.

Given the size, perhaps one of the most remarkable elements of the project was its speed. Local elected leaders in Racine County made a big deal of the fact that construction equipment arrived on site a year after the first meeting between Foxconn and then-Gov. Scott Walker. It was less than a year from the project announcement at the White House to a groundbreaking that included President Donald Trump.

The first building, a 120,000-square-foot multi-purpose facility, was completed late last year. Company leaders often remark to local officials about how they have learned to operate at the speed of Foxconn.

In 2019, however, the speed of the Foxconn project, or perhaps the lack thereof, might be more consequential. A slowdown in the Chinese economy, global trade concerns and a shifting market for display screens have all conspired to change the economics of the project.

In January, Foxconn first acknowledged it was shifting its hiring plans and then said it was reconsidering whether it would make LCD screens before ultimately recommitting to its plans. The company also laid out plans for specific building projects it plans to complete in the next 18 months.

Those projects include a liquid crystal module backend packaging plant, a high-precision molding factory, a system integration assembly facility, a rapid prototyping center to work with startups, a research and development center, a data center located in or near the Mount Pleasant campus, and a town center to support those working in the park. 

Racine County executive Jonathan Delagrave said if local leaders had struck a rigid deal that did not allow for change, local residents would – rightly, in his view – criticize the project.

“We want them to be fluid and we want them to create products that are going to be relevant,” he said.

While the ambitious plans Foxconn originally laid out had a long-term goal of the campus being operational several years in the future, the list of projects for the next 18 months gives the overall endeavor a more defined set of objectives for the short-term. 

As of early March, no announcements had been made about which of the seven projects would be constructed first.

There are plenty of other projects beyond what is being built on the main Foxconn campus. American Transmission Co., for example, is building a substation just east of the campus. A 538-unit multi-family housing project was recently proposed a little farther east, along 90th Street and Braun Road. Several health care developments are in the works for the area. Out-of-state and local developers alike have taken a renewed interest in downtown Racine and a number of industrial projects have popped up closer to the Foxconn campus.

“We’ve certainly seen more development interest in the City of Racine in the last year than we’ve seen in the previous 30 years,” Racine mayor Cory Mason said.

He noted it is important to make sure the increased development interest translates into opportunity for everyone in the city. Racine and its partners have already trained about 100 people in the building trades, with a particular focus on water-related infrastructure.

Foxconn, too, has dedicated space at its Mount Pleasant construction site to training. More than 850 people have worked on the project already, but the original plans called for more than 10,000 construction jobs.

Delagrave said it is important to have communication with county residents to bring everyone along as development continues. He added the first priority should be making sure existing businesses are not hurt by Foxconn’s arrival.

“What we don’t want and what’s not going to happen is we’re not going to have a new normal of construction and that’s just the way it is. We’re efficiently going to get that done,” he said.

The prospect of billions of dollars in development would seem to threaten the county’s quality of life, but Delagrave said: “If done properly … we’re going to have a better way of life.”

The controversy over the project, however, has not been limited to the state incentive package or its ties to President Donald Trump. The Gimlet Media podcast “Reply All” in December put a national spotlight on Mount Pleasant’s local politics. Homeowners in the path of the mega project have been featured in a number of magazines and some have even gone to court to try to block the sale of their properties.

Delagrave said he understands the criticism of the project, but said the lack of challengers in upcoming elections suggests people approve of the project overall.

“I was fortunate enough that I don’t live in that area, so I think its fair criticism and I think that any time that change happens there’s going to be varying factions, rightfully so, that are concerned and have criticism. But I do think, overall, the people of Racine County believe in the project,” Delagrave said.

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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