Foxconn’s promise to build a factory in Wisconsin has always been controversial, with critics pointing to huge state subsidies and the high cost of US labor as reasons not to take the Chinese firm at its word. Now, it seems Foxconn is facing the reality of the situation, too, with a special assistant to Foxconn’s chief executive saying that the company is considering shelving plans for a factory altogether.
“In Wisconsin we’re not building a factory. You can’t use a factory to view our Wisconsin investment,” Louis Woo, a special assistant to Foxconn chairman Terry Gou and a key negotiator in the Wisconsin deal, told Reuters.
Bloomberg reports that Woo said there were no plans to scrap the facility altogether but that the company was reconsidering what operations might be best for the site.
Woo told Reuters that Foxconn couldn’t compete in the US TV market if it used domestic labor to build LCD panels — something that outside commentators have previously noted. “In terms of TV, we have no place in the U.S.,” said Woo. “If a certain size of display has more supply, whether from China or Japan or Taiwan, we have to change, too.”
Earlier this month, Foxconn admitted that hiring for the plant was going slowly. The company originally promised to create some 13,000 jobs in the state, but it has already fallen short of modest targets. Instead of creating a promised 260 jobs in 2018, it only created 178, making it ineligible for tax credits. The company originally promised to employ 5,200 workers by the end of 2020, but Reuters now reports that this figure is closer to 1,000.
As well as the number of jobs diminishing, the type of work is changing, too. Instead of focusing on factory work, Foxconn claims it will create higher-skilled, R&D occupations. Woo told Reuters that about three-quarters of the jobs Foxconn will create in the state will be so-called “knowledge” positions.
Foxconn was given exemptions from environmental regulations and subsidies worth $4.1 billion to create manufacturing jobs in Wisconsin. However, ever since the flurry of publicity with which the deal was announced (including a photo-op with President Trump, former Wisconsin Gov. Scott Walker, and Gou breaking ground on the new site), the terms of the arrangement have been continually downsized. It’s not clear how much further they may be changed.
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