What’s up with Foxconn? It depends on the minute
Reuters shocked Wisconsin officials with a report that Foxconn Technology Group, the Taiwanese manufacturer building a massive plant in southeastern Wisconsin, was reneging on original plans in a significant way. The report, quickly picked up by media outlets around the world, indicates that the company is rethinking its Wisconsin project due to a globally changing market, the high cost of manufacturing in the U.S., and other factors, which Reuters bases on an interview with Louis Woo, special assistant to Foxconn CEO Terry Gou.
A few hours later, Woo reportedly called Gov. Tony Evers and leaders of the Milwaukee 7 regional economic development group to explain that Foxconn remains committed to Wisconsin and that his comments were quoted out of context, according to a Milwaukee Business Journal story.
Now it seems that the Taiwanese company has reversed its decision — reportedly after a conversation with U.S. Pres. Donald Trump — and now plans to build a Generation 6 facility and still create 13,000 jobs in Wisconsin. The Gen 6 plant will manufacture smaller glass screens for phones, notebooks, and wearable devices as opposed to the Generation 10.5 plant originally announced, according to multiple reports. For an AP Fact Check on the latest news, click here.
Foxconn announced plans to downscale last year, from manufacturing huge liquid crystal display (LCD) screens in Wisconsin, to significantly smaller screens — and thus a less costly plant — such as those used on tablets or phones, but the latest report from Reuters suggests that may not happen either.
Wisconsin Economic Development Corp. officials say taxpayers were protected in a carefully crafted contract with the state, which promised Foxconn nearly $4 billion in state and local tax credits that were tied to job creation. In other words, no jobs, no tax credits, and that situation played out earlier this month when it was announced that Foxconn created 82 fewer jobs than the 260 minimum promised last quarter. It could still receive the credits, however, if the jobs are created down the road.
Reportedly, Foxconn makes more than half of its revenues from one client, Apple Computers, and it may be struggling as Apple has seen a decline in iPhone sales. Foxconn recently cut 50,000 seasonal jobs in China earlier than usual, and it may be signaling a move of the Apple assembly plant to India where manufacturing costs are lower, according to a freightwaves.com report.