Updated at 3:45 p.m. with statements from local and state elected officials and agencies.
In the wake of the early Wednesday morning news that Foxconn Technology Group was rethinking some of its plans for what products it might manufacture at the company’s massive campus under development in Mount Pleasant, local and state officials were quick to speak up.
Louis Woo, special assistant to Foxconn Chief Executive Terry Gou, told Reuters the company is considering hiring more engineering and research personnel, moving the company away from manufacturing advanced liquid crystal display panels as it had previously announced.
That news appeared to surprise officials both locally and across the state; numerous media outlets were quick to repeat and repost the Reuters information.
But local officials say the Taiwanese-based firm is still moving forward with the first of a three-phase project to build a 22-million square-foot manufacturing facility.
Still, Woo told Reuters that economic conditions might require the company to abandon its original plans to manufacture ultra-large display panels and might, instead focus on technology, engineering and research. How such a change might affect the levels of financial support negotiated by the former governor and the Legislature was the topic of multiple released statement from elected officials and agencies across Wisconsin today.
Foxconn could be eligible for as much as $3 billion in state tax incentives for building its $10-billion manufacturing campus in Mount Pleasant and creating as many as 13,000 jobs. Other local incentives for the project and infrastructure improvements could amount to another $1.5 billion.
Vos and Fitzgerald react
Assembly Speaker Robin Vos (R-Rochester) and Senate Majority Leader Scott Fitzgerald (R-Juneau) released a joint statement noting, “The company is reacting to the wave of economic uncertainty.”
“In a short time, Foxconn has made a positive impact across Wisconsin with more than 1,000 new jobs, an investment of$200 million, three innovation centers and one of the largest gifts ever of $100 million to the UW-Madison. We don’t blame Foxconn for altering plans in an ever-changing technology business. It’s also not surprising Foxconn would rethink building a manufacturing plant in Wisconsin under the Evers Administration.”
“It’s disappointing to see Democrats rooting for the failure of Foxconn and trying to undermine this historic opportunity for our state,” the joint Vos-Fitzgerald statement said. “Democrats don’t want thousands of family-supporting careers; they want a political talking point.”
“From the very beginning, we looked out for the best interest of the taxpayers of the state. Not a dollar would be paid out until jobs in the Foxconn development area were created. The incentive package is based on fulfilling the contract. We will continue to work with Foxconn to help the company meet its repeated goal of creating 13,000 jobs in Wisconsin. Again, the company has reiterated that this goal hasn’t changed.”
The Milwaukee Journal Sentinel reported last week that Foxconn had fallen short of its 2018 benchmark to qualify for a portion of $1.5 billion in tax credits. But it can still make up those credits in future years.
Governor’s office in ‘weekly communication’ with Foxconn
The office of newly elected Gov. Tony Evers was also quick to respond with a statement from Wisconsin Department of Administration Secretary-designee Joel Brennan.
“The administration is in regular, weekly communication with senior leadership at Foxconn, however, we were surprised to learn about this development,” Brennan’s statement said “While some of the information reported today has been previously reported publicly, other details about the continuing evolution of this project will require further review and evaluation by our team.
“The governor has always said that protecting Wisconsin taxpayers, the local communities that have already made significant investments in this project, and our environment are his chief concerns.
“In the coming weeks, the Evers Administration will continue to commit time, resources, and personnel to ensure that the interests of Wisconsin workers and taxpayers are protected and promoted by our approach to the Foxconn project.”
WEDC reiterates terms of Foxconn agreement
“Over the past 45 years, Foxconn’s success has been based on the company’s ability to foresee and adapt to technological advancements,” said a statement released by the Wisconsin Economic Development Corp. “Foxconn’s long-term success both globally and within Wisconsin is centered around the alignment of its business model with ever-changing global economic conditions, including evolving customer demands.”
WEDC was the agency responsible for negotiating the agreement between the state and Foxconn.
“WEDC’s performance-based contract with Foxconn provides the company the flexibility to make these business decisions, and at the same time, protects Wisconsin’s taxpayers,” the WEDC statement added. “As has been reported, Foxconn will not qualify for tax credits until, at the earliest, 2020, and then only if the company meets its annual job creation and capital investment requirements. Our ongoing discussions with company officials reflect Foxconn’s continued commitment to the State of Wisconsin.”
Local leaders speak up, too
The news also brought about a quick response from Village of Mount Pleasant President David DeGroot, Racine County Executive Jonathan Delagrave and Jenny Trick, Executive Director of the Racine County Economic Development Corp. regarding reported changes in the direction of the Foxconn project.
Over the next few months, construction is expected to begin on phase 1 of the project.
“To date, Foxconn has invested over $200 million in Wisconsin,” the local officials stated. “We have seen much of this locally – including Foxconn’s investment in more than $100 million in construction contracts that have transformed the project site, the completion of the first 120,000 square foot building on the campus and the entire 3 million square foot pad that will serve as the base for the next phase of construction, which will begin in Spring 2019.”
The Milwaukee Business Journal reported that in communication between Woo and Gale Klappa, chairman and CEO of WEC Energy Group, the Foxconn exec said the company was rethinking what technology it will build in Wisconsin due to “the changing dynamics of the economy the past two years.”
Foxconn will proceed with six components of the Mount Pleasant project over the next 18 months, Woo said in an email, according to Klappa. They are:
• A liquid crystal module packaging plant;
• A high-precision molding factory;
• A system integration assembly facility;
• A rapid prototyping center;
• A research-and-development center;
• A high-performance data center; and
• A town center to support employees in Mount Pleasant.
The Reuters story also stated that “a company source” said Foxconn would employ about 1,000 workers by 2020 rather than the initial plan to employee 5,200.
Klappa said Woo’s email did not specifically address that point. However, Klappa said he believes Woo’s assurances.
Previous Racine County Eye article below.
According to published reports, Foxconn Technology Group will reconsider its previously announced plans to manufacture advanced liquid crystal display panels at a $10 billion manufacturing center now under construction in Mount Pleasant. The company, reportedly, plans to employ people for research and engineering as opposed to a workforce of 13,000 mostly manufacturing positions the company originally promised.
That original high headcount was, in part, the foundation for a multi-billion-dollar package of tax incentives and direct payments the state of Wisconsin made available to Foxconn to lure the company to the state in the first place.
Often described by former Gov. Scott Walker and others who pursued the Foxconn operation as “family-supporting jobs,” the large number of manufacturing positions was the linchpin in state support for the project.
Louis Woo, special assistant to Foxconn Chief Executive Terry Gou, and the face of the company in Wisconsin is named as the source of the information. According to Reuters, Woo said Foxconn is “evaluating options.”
In an interview with Reuters, Woo noted that the high cost of making advanced TV screens in the United States, where labor costs are comparatively high, was a factor.
“In terms of TV, we have no place in the U.S.,” Woo said in the Reuters interview. “We can’t compete.”
Unveiled at the White House in 2017, the 20-million square foot Mount Pleasant campus was destined to become the largest greenfield investment by a foreign-based company in U.S. history.
Foxconn, which received massive state and local incentives for the project, initially said it would manufacture advanced large screen displays for TVs and other consumer and professional products at the Racine County site. Foxconn later said it would build smaller LCD screens instead.
Now, according to Reuters, Woo explained “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. It would also produce specialized tech products for industrial, healthcare, and professional applications.” he added.
Woo told Reuters that the Foxconn investment in the state should not be viewed as a factory. “You can’t use a factory to view our Wisconsin investment,” Woo told the news service.