Foxconn is reconsidering plans to make advanced liquid crystal display panels at a $10bn Wisconsin campus, and said it intends to hire mostly engineers and researchers rather than the manufacturing workforce the project originally promised.
Announced at a White House ceremony in 2017, the 20m sq ft campus marked the largest greenfield investment by a foreign-based company in US history and was praised by Donald Trump as proof of his ability to revive American manufacturing.
The deal relied on a potential $4.8bn in subsidies and has proved highly controversial. One of the deal’s biggest critics, Randy Bryce, a former iron worker who lives neat the Foxconn site and ran for House speaker Paul Ryan’s seat as a Democrat, said the deal appeared to be “unravelling”.
“It shows what happens when government puts corporations before people,” said Bryce. “They absolutely should not get that money now.”
Foxconn initially planned to manufacture advanced large screen displays for TVs and other consumer and professional products at the facility, which is under construction. It later said it would build smaller LCD screens instead.
Now, those plans may be scaled back or even shelved, Louis Woo, the special assistant to Foxconn chief executive Terry Gou, told Reuters.
Woo said the company was still evaluating options for Wisconsin, but cited the steep cost of making advanced TV screens in the US, where labor expenses are comparatively high. “In terms of TV, we have no place in the US,” he said in an interview. “We can’t compete.”
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, 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.
It is unclear when the full 13,000 workers will be hired.
But Woo, in the interview, said about three-quarters of Foxconn’s eventual jobs will be in R&D and design – what he described as “knowledge” positions – rather than blue-collar manufacturing jobs.
Woo said it would be more profitable to make them in greater China and Japan, ship them to Mexico for final assembly, and import the finished product to the US.
The Foxconn project was championed by Scott Walker, the Republican former Wisconsin governor who helped secure around $4bn in tax breaks and other incentives before leaving office. Critics of the deal, including a number of Democrats, called it a corporate giveaway that would never result in the promised manufacturing jobs and posed serious environmental risks.
The company’s own growth projections and employment goals suggest the taxpayer investment would take at least 25 years to recoup, according to budget thinktank the Wisconsin Budget Project.
“This deal was done with so much secrecy. Now that we have a governor who actually cares about people hopefully Foxconn will be held to account,” said Bryce.
Foxconn chief executive Gou plans to meet with Wisconsin’s new Democratic governor, Tony Evers, a past critic of the deal, later this year to discuss modifications of the agreement, according to the source familiar with the company’s thinking.
Evers could not be reached for comment.