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Foxconn exec: “We’re not building a factory” in Wisconsin

Wednesday, Jan 30, 2019

* Reuters

Foxconn Technology Group is reconsidering plans to make advanced liquid crystal display panels at a $10 billion Wisconsin campus, and said it intends to hire mostly engineers and researchers rather than the manufacturing workforce the project originally promised. […]

[Louis Woo, special assistant to Foxconn Chief Executive Terry Gou, told Reuters] the company was still evaluating options for Wisconsin, but cited the steep cost of making advanced TV screens in the United States, where labor expenses are comparatively high. […]

Rather than a focus on LCD manufacturing, Foxconn wants to create a “technology hub” in Wisconsin that would largely consist of research facilities along with packaging and assembly operations, Woo said. It would also produce specialized tech products for industrial, healthcare, and professional applications, he added. […]

“In Wisconsin we’re not building a factory. You can’t use a factory to view our Wisconsin investment,” Woo said.

Earlier this month, Foxconn, a major supplier to Apple Inc., reiterated its intention to create 13,000 jobs in Wisconsin, but said it had slowed its pace of hiring. The company initially said it expected to employ about 5,200 people by the end of 2020; a company source said that figure now looks likely to be closer to 1,000 workers.

OK, so how are they gonna convince all those techies to live in the middle of nowhere Wisconsin? Those folks are gravitating to cities like Chicago.

* What a mess

On Friday, The Wall Street Journal reported that the company “fell short of the minimum number of jobs it was required to create in 2018 to claim state-job creation tax credits.” The Wisconsin Economic Development Corp says that the company needed to create 260 full-time jobs, but only created 178. As a result, the company won’t receive tax credits for 2018. The WSJ cites the state’s low employment rate as a factor for the slow hiring, and notes that the company could earn $19.1 million in tax credits if it passes its hiring goal of 2,080 jobs this year. The company denied reports last November that it had been looking to bring in workers from China to bolster its workforce.

* More

First, roughly half the Wisconsin taxpayer money is guaranteed whether or not Foxconn ever hires anyone. And second, even if the company’s dramatic re-imagining of the project does shrink the total that taxpayers will pay, it will likely prolong rather than shrink the 25-year optimistic timeline for recouping the state’s expenses here, as the Milwaukee Independent explained on the one-year anniversary of the deal’s formal passage through the state legislature.

I wonder if the Tribune editorial board still thinks this was a good idea.

- Posted by Rich Miller        

72 Comments
  1. - njt - Wednesday, Jan 30, 19 @ 10:36 am:

    Highly recommended podcast:

    https://www.gimletmedia.com/reply-all/132-negative-mount-pleasant


  2. - wordslinger - Wednesday, Jan 30, 19 @ 10:37 am:

    –First, roughly half the Wisconsin taxpayer money is guaranteed whether or not Foxconn ever hires anyone.–

    Wow. Did Walker sell out the taxpayers for an election-year boondoggle or what?

    He considers himself a “fiscal conservative free marketeer.” But he’s a grifter of the worst sort.


  3. - Dan Johnson - Wednesday, Jan 30, 19 @ 10:37 am:

    Abolish company-specific subsidies. States almost always have less negotiating power than companies (especially global companies).


  4. - 47th Ward - Wednesday, Jan 30, 19 @ 10:38 am:

    Paging Nelson Muntz. Nelson Muntz please come to the white courtesy phone.


  5. - Not a Billionaire - Wednesday, Jan 30, 19 @ 10:39 am:

    This should finish of Trump as well but he can take revenge with tariffs which I would support. What a conn….Every should cut them off let them due . Discovery will expose the fraud.


  6. - anon - Wednesday, Jan 30, 19 @ 10:41 am:

    This kind of thing is happening in our own backyard.
    https://newrepublic.com/article/152836/elwood-illinois-pop-2200-become-vital-hub-americas-consumer-economy-its-hell


  7. - Anonymous - Wednesday, Jan 30, 19 @ 10:42 am:

    And Illinois has never done an independent audit of EDGE. Just sayin. The new Governor should look into doing that. We might need more attorneys at DCEO to clawback all that money after the audit. Or do we look the other way still?


  8. - LTSW - Wednesday, Jan 30, 19 @ 10:43 am:

    The techies will likely be H1B visa holders. If you’re not in a major metro area that is mostly all your job candidates. That’s what is happening in Springfield. No complaints about the work product.


  9. - Oswego Willy - Wednesday, Jan 30, 19 @ 10:43 am:

    If you build it… they still want a big city to live in.

    It’s like taking stacks of cash and using then to start your fireplace.


  10. - NeveroddoreveN - Wednesday, Jan 30, 19 @ 10:46 am:

    Please follow njt’s Link and listen to that podcast. It will provide you an exceptional backstory to all of this.


  11. - Annonin' - Wednesday, Jan 30, 19 @ 10:48 am:

    So WI and world got jived by Foxcomm ..completely….partially ??? Maybe someone could ring up Uline or GovJunk for a quick soundbite (special emphasis on bite)


  12. - DuPage Saint - Wednesday, Jan 30, 19 @ 10:49 am:

    I know there is a fancy German word for it that I cannot spell so all I can say is better them than us
    Also maybe it will stop the threatened pollution


  13. - wordslinger - Wednesday, Jan 30, 19 @ 10:49 am:

    –[Louis Woo, special assistant to Foxconn Chief Executive Terry Gou, told Reuters] the company was still evaluating options for Wisconsin, but cited the steep cost of making advanced TV screens in the United States, where labor expenses are comparatively high.–

    So the Usual Suspects on RTW, workers comp and regulations can chime in anytime now.


  14. - Conn Smythe - Wednesday, Jan 30, 19 @ 10:50 am:

    They’ll reverse engineer an argument that had we added causation to workers comp cases, been more polite to venture capital tech bros, and passed a term limits amendment the whole thing would have been better in Illinois to begin with.


  15. - Grandson of Man - Wednesday, Jan 30, 19 @ 10:51 am:

    “United States, where labor expenses are comparatively high”

    Scott Walker and the Wisconsin GOP tried to lower labor costs with RTWFL, but that’s apparently not race to the bottom enough.

    “First, roughly half the Wisconsin taxpayer money is guaranteed whether or not Foxconn ever hires anyone”

    Literally giving free money to those who need it least. When it comes to spending of tax dollars, many strain the gnats of helping low-income communities with jobs and education investment but swallow the camels of massive tax giveaways to the richest. It serves the people who elected Scott Walker and Republicans right.


  16. - Been There - Wednesday, Jan 30, 19 @ 10:52 am:

    ===, so how are they gonna convince all those techies to live in the middle of nowhere Wisconsin? ====
    I thought one of reasons they decided on Kenosha besides the subsidies was the access to lake water. Obviously without a factory that need is pretty much now gone.


  17. - Henry Francis - Wednesday, Jan 30, 19 @ 10:52 am:

    Trump’s guy Walker gives out US taxpayers’ dough to Chinese company, that fails to deliver US jobs.

    And I noticed Rauner’s college roommate and former chair of Intersect’s board quietly jumped ship.


  18. - Anon - Wednesday, Jan 30, 19 @ 10:53 am:

    DD, “schadenfreude?”


  19. - Covert - Wednesday, Jan 30, 19 @ 11:00 am:

    The “authorities” should also investigate Camelot, the English company hired to “privatize/manage” the Lottery. And why are profits scheduled to be exported to Canada.


  20. - lakeside - Wednesday, Jan 30, 19 @ 11:02 am:

    I also came here to post the Reply All podcast. If you can’t listen, though you should, the Verge also interviewed the producer, Sruthi Pinnamaneni, who reported it all out. This is as devastating as it was always going to be.

    https://www.theverge.com/2018/12/11/18136020/foxconn-wisconsin-deal-reply-all-vergecast-interview-sruthi-pinnamaneni


  21. - Arsenal - Wednesday, Jan 30, 19 @ 11:07 am:

    I can’t believe how thoroughly WI got suckered.


  22. - Angry Republican - Wednesday, Jan 30, 19 @ 11:12 am:

    Anyone with a few active brain cells could have predicted what a disaster this Foxconn plant would be, and figured out it was nothing more than pandering to the political stars of the day - Paul Ryan, Trump, Walker - and a hedge against the Trump tariffs. For more on why manufacturing won’t come back to the US, read how hard it was for Apple to get something as mundane as a screw:https://www.nytimes.com/2019/01/28/technology/iphones-apple-china-made.html


  23. - Dysfunction Junction - Wednesday, Jan 30, 19 @ 11:15 am:

    Yes, Anon, Schadenfreude is the word. See also “Bears/Packers Rivalry,” “Cubs/Brewers Rivalry,” and Jonathan Brandmeier’s “Hey Der Milwaukee Polka.” Anyone think this will stem the tide of Illinois outmigration (at least the northward kind)?


  24. - Anonymous - Wednesday, Jan 30, 19 @ 11:17 am:

    Good point Covert. That whole deal smells. The Hinshaw Culbertson investigation was a sham.


  25. - Anon - Wednesday, Jan 30, 19 @ 11:18 am:

    Foxconn ran a similar grift in Pennsylvania in 2013 so Walker and company can’t say they didn’t se this coming


  26. - dbk - Wednesday, Jan 30, 19 @ 11:18 am:

    [@njt thanks for the link to the podcast series]

    This sounds suspiciously like the Foxconn version of bait and switch to me.

    Also recommended: the link on Elwood IL (@10:41), which has evolved into a nightmare-level distribution hub.


  27. - Baloneymous - Wednesday, Jan 30, 19 @ 11:18 am:

    Note to self:
    Never give billions to a company with “con” in their name. Or a company that Scott Walker supported.


  28. - Grandson of Man - Wednesday, Jan 30, 19 @ 11:21 am:

    “I can’t believe how thoroughly WI got suckered.”

    Gullible people believe that if you give tax dollars to billionaires and strip worker protections, the billionaires will bring them prosperity. Republicans and their funders know these people very well.


  29. - Ginhouse Tommy - Wednesday, Jan 30, 19 @ 11:25 am:

    The old adage of If it sounds too good to be true, it probably is applies here. I’m waiting on a statement from former Gov. Walker.


  30. - Not a Billionaire - Wednesday, Jan 30, 19 @ 11:26 am:

    I was suspicious there was that much demand for get more tv sets of any other electronics. If they were smart they would have used the money to set up for US iPhone production but it seems their claims of automation are fake too.


  31. - A Jack - Wednesday, Jan 30, 19 @ 11:29 am:

    Wisconsin has also spent a large amount for transportation improvements to get those 178 workers to that job. And they wanted expanded Amtrak service.


  32. - wordslinger - Wednesday, Jan 30, 19 @ 11:31 am:

    –I can’t believe how thoroughly WI got suckered.==

    Walker and his Assembly cronies just wanted the press pop in an election year. Wasn’t their money, so who cares? Thirteen thousand jobs sounds good on the TV box news.

    Foxconn has a track record on these scams.


  33. - Lyle Langley - Wednesday, Jan 30, 19 @ 11:36 am:

    Foxconn did some deals with Brockway, Ogdenville, and north haverbrook, and by gum it put them on the map


  34. - Generic Drone - Wednesday, Jan 30, 19 @ 11:37 am:

    What? A company reneging on its promise of new jobs for tax breaks? No way. They have been doing this for decades people.


  35. - JS Mill - Wednesday, Jan 30, 19 @ 11:38 am:

    If only Wisconsin were more competitive though. They could have those jobs. Have they considered lowering wages to $1.00 per hour? That could help./s
    Rauner was always on this “be more competitive” mantra. That is really code for drop wages to 3rd world rates.

    These people need a history lesson.


  36. - Chicagonk - Wednesday, Jan 30, 19 @ 11:39 am:

    What a mess. It would be smart if Midwestern states would band together and get smart about these corporate subsidies.


  37. - Da Big Bad Wolf - Wednesday, Jan 30, 19 @ 11:43 am:

    I hope for Wisconsin’s sake Foxconn builds something, with the citizens being on the hook for half the subsidies and all. Wasn’t the total something like 3 billion? Is there a danger they might pull out completely like in PA and take the money and run?


  38. - Albany Park Patriot - Wednesday, Jan 30, 19 @ 11:44 am:

    What a bunch of rubes.


  39. - Anon221 - Wednesday, Jan 30, 19 @ 11:48 am:

    That factory… or technology hub…or “peaches” is really starting to show some not unsurprising “rot”.


  40. - DeseDemDose - Wednesday, Jan 30, 19 @ 11:55 am:

    Uihlein, Bueller, Uihlein, Bueller….


  41. - Anonymous - Wednesday, Jan 30, 19 @ 12:01 pm:

    The idea that Foxconn was suddenly going to start building LCD panels in the midwest was so foolish.

    Yes they will take the money and run. Wonder if regular citizens can get in on the free cash giveaway from Wisconsin. Might create some actual economic growth.


  42. - Benjamin - Wednesday, Jan 30, 19 @ 12:02 pm:

    While I agree Racine will be a bit of a tough sell for the kind of highly educated workers Foxconn says they’ll hire, it’s not as tough as it could be. I’ve long thought Racine had some advantages. It’s not a bad small city, and it’s cheap, but it’s within commuting and reverse commuting distance of Milwaukee and the North Shore (for couples with two jobs). It’s no problem going to Milwaukee for big city amenities, and it’s an easy day trip to Chicago. Finally, it’s within a reasonable drive of O’Hare and Mitchell airports. You could do a lot worse.

    Doesn’t change the fact that the Foxconn deal was a huge swindle, but the people of Racine should at least feel like they can do better.


  43. - Streamwood Retiree - Wednesday, Jan 30, 19 @ 12:03 pm:

    While I fully concur, isn’t Illinois keeping the special property tax break on Sears’ HQ in Hoffman Estates? Bankrupt Sears, now the personal property of the former CEO, which no longer has any stores in Illinois?


  44. - Anon - Wednesday, Jan 30, 19 @ 12:07 pm:

    It’d be nice if some of our dedicated public servants (I’m assuming it’d fall to an AG’s office) would start investigating some of these big deals these companies solicit with an eye for fraud.


  45. - njt - Wednesday, Jan 30, 19 @ 12:21 pm:

    ===Doesn’t change the fact that the Foxconn deal was a huge swindle, but the people of Racine should at least feel like they can do better.===

    Hope those feelings will lighten the load of the $700 million in debt they fronted.


  46. - Anyone Remember - Wednesday, Jan 30, 19 @ 12:21 pm:

    Sadly, these “competitions” went beyond the pale with the mid 1980s siting of the Saturn plant. And who pushed that one beyond the pale? James R. Thompson. “‘’The circus began,'’ Hoglund said, ‘’when (Illinois) Gov. (James) Thompson called and said he`d signed a seat belt law and said he`d trade it for the (Saturn) plant.”

    http://www.chicagotribune.com/news/ct-xpm-1985-07-31-8502200076-story.html
    :(


  47. - Jocko - Wednesday, Jan 30, 19 @ 12:27 pm:

    You have to wonder if Ryan and Walker started getting weak in the knees…wondering if they’d be the ones holding the Foxconn bag.

    Just out of curiosity, does Mt. Pleasant still get access to Lake Michigan water?


  48. - Not a Billionaire - Wednesday, Jan 30, 19 @ 12:32 pm:

    I just looked their Chinese factories up. I bet they didn’t cost as much as what they got from WI.They are close to the port and get all the parts in assemble and ship out. I doubt they develop anything advanced. It was a scam from the beginning.


  49. - Anonymous - Wednesday, Jan 30, 19 @ 12:35 pm:

    This is good news for Great Lakes water quality: that plant also got a free pass to pull a LOT of clean lake water and output pollution.


  50. - Not a Billionaire - Wednesday, Jan 30, 19 @ 12:43 pm:

    Walker finally responded claims Fox Conn won’t get any money ….Twitter response o n 🔥 over money spent and if he is lying.


  51. - @misterjayem - Wednesday, Jan 30, 19 @ 12:52 pm:

    Just print a couple-dozen business cards that say “Wallet Inspector” and a Wisconsin vacation will pay for itself.

    – MrJM


  52. - Anonymous - Wednesday, Jan 30, 19 @ 12:58 pm:

    I mean, who could have possibly seen this coming, other than anyone with half-functional eyes and/or ears and 40 percent of a functioning brain who was paying the least bit of attention?


  53. - VanillaMan - Wednesday, Jan 30, 19 @ 1:10 pm:

    –Foxconn, a major supplier to Apple Inc–

    Hello?
    Have you been awake? Apple has lost 40% of its value over the past year. Foxconn isn’t doing these things in a vaccuum. Its decision is based upon Apple.

    Apple is in trouble, so Foxconn is too. Geez people. No one got snookered.


  54. - JoanP - Wednesday, Jan 30, 19 @ 1:11 pm:

    The NYT had an article about the weather here, and someone left the following comment: “I remember when I said it would be a cold day in Hades before Foxconn would build a plant here. Well, it is, and they’re not.”

    Ha.


  55. - Pundent - Wednesday, Jan 30, 19 @ 1:36 pm:

    =Its decision is based upon Apple.=

    This plant was intended to make LCD tv screens not the OLED screens being used in iPhone the press release said as much.

    “the company was still evaluating options for Wisconsin, but cited the steep cost of making advanced TV screens in the United States, where labor expenses are comparatively highs.”


  56. - M - Wednesday, Jan 30, 19 @ 1:37 pm:

    - VanillaMan - Wednesday, Jan 30, 19 @ 1:10 pm: “No one got snookered.”

    Keep telling yourself that… but Foxconn knew what the market was before they struck a deal with WI.


  57. - pool boy - Wednesday, Jan 30, 19 @ 1:38 pm:

    If they want to make some serious money, they need to distribute spotted cow to the other 49 states.


  58. - efudd - Wednesday, Jan 30, 19 @ 1:50 pm:

    But, but, but, a “business minded” Republican brought this “job creator” to the state, and Illinois wasn’t in the running due to unions, workers comp, property taxes, etc…..
    That’s what Greg Bishop and IRN told me anyway.


  59. - efudd - Wednesday, Jan 30, 19 @ 1:53 pm:

    Vanilla man-
    I strongly suggest you look at Foxxconn’s history.
    Especially in the Philippines.
    They got sheared like a bumpkin at his first county fair.


  60. - Pundent - Wednesday, Jan 30, 19 @ 1:56 pm:

    And whether or not anyone got snookered is certainly debatable. The labor issues that Foxconn is citing today are not fundamentally any different than when they agreed to take the state’s money. But anyone interested in doing some casual research on the company would quickly see that there’s a pattern to this. So in that sense I would argue that Wisconsin hasn’t been duped. Foxconn did what they pretty much always have done.


  61. - @misterjayem - Wednesday, Jan 30, 19 @ 2:23 pm:

    As the oft-cited podcast will make clear, many people saw many problems with the Foxconn deal from the get-go.

    https://www.gimletmedia.com/reply-all/132-negative-mount-pleasant

    The “give land and tax money to the rich and we’ll all be better off” flim-flam never fails with a certain flavor of conservative mark.

    Something very similar is happening right now with Lincoln Yards in Chicago.

    – MrJM


  62. - wordslinger - Wednesday, Jan 30, 19 @ 2:43 pm:

    –No one got snookered.–

    None of the politicians cared. They just wanted a big splash before the election.

    Even under the most optimistic projections with the factory being built with maximum employment, Wisconsin wasn’t going to get to the break-even point for 25 years.

    Do you know what electronics will be like in 25 years?

    Racine has already made improvements from the proceeds of TIF bonds backed by property taxes on a plant that now will not be built. So guess who gets to pay off those bonds? Every other property taxpayer.


  63. - njt - Wednesday, Jan 30, 19 @ 3:06 pm:

    ===Apple===

    “Foxconn Technology Group is reconsidering plans to make advanced liquid crystal display panels”

    Didn’t know when Apple started selling TVs


  64. - Aldyth - Wednesday, Jan 30, 19 @ 3:57 pm:

    I do believe that Walker has said that he’s considering running for office at some point in the future.

    The Democratic candidate’s ad writes itself.


  65. - ike - Wednesday, Jan 30, 19 @ 4:31 pm:

    Trump could have just gotten his wall money from Walker, since he was so willing to give 5 billion to Foxconn for nothing.


  66. - Flapdoodle - Wednesday, Jan 30, 19 @ 5:09 pm:

    @ njt 3:06

    Catch up: https://www.apple.com/apple-tv-4k/


  67. - Anonymous - Wednesday, Jan 30, 19 @ 6:06 pm:

    A couple of “smart” real estate guys bought up lots of land near that area. The next big thing. Ugh.


  68. - 47th Ward - Wednesday, Jan 30, 19 @ 7:20 pm:

    https://www.wuwm.com/post/president-trump-applauds-foxconn-development-after-ceremonial-groundbreaking-racine-county#stream/0

    Sorry for the long link, but this is a “Mission Accomplished” moment in Presidential Advance Regrets. Couldn’t happen to a nicer bunch of guys either. Except for Tank. I hope Tank gets to keep his job. The rest? Two out of three are already retired.


  69. - Shemp - Wednesday, Jan 30, 19 @ 7:58 pm:

    Hindsight is always 20/20


  70. - wordslniger - Wednesday, Jan 30, 19 @ 8:47 pm:

    –Hindsight is always 20/20–

    Hindsight? A sixth grader typing on the google “foxconn failed record on jobs promises” would have provided more thorough due diligence. Takes about 20 seconds to get the drift of their grift.

    But due diligence wasn’t the objective — it was to make a big p.r. splash on the taxpayer dime to hopefully drag Walker across the finish line in November.

    Didn’t work. But the taxpayers are still on the hook.

    Strange behavior by “fiscal conservative, free marketeers,” don’t you think? I’m starting to question their sincerity to their espoused principles.


  71. - Shemp - Wednesday, Jan 30, 19 @ 10:31 pm:

    Conversely, when someone doesn’t take a good swing in misses, they are also crucified. At least Wisconsin had triggers in place for some of the incentives. I have been a party to the economic development game and it’s always a damned if you do, damned if you don’t matter. A good chunk of the public will pounce no matter the outcome.


  72. - wordslinger - Wednesday, Jan 30, 19 @ 10:48 pm:

    –Conversely, when someone doesn’t take a good swing in misses, they are also crucified.–

    Wow, tough crowd at Mixed Metaphor Park. Who were you playing, the Pontius Pilots?.

    Your way with words is reminiscent of Ricard I: “They have vilified me, they have crucified me; yes, they have even criticized me.”


Sorry, comments for this post are now closed.


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