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Foxconn reconsiders plan for Wisconsin manufacturing hub

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Posted at 1:14 PM, Jan 30, 2019
and last updated 2019-01-30 14:14:11-05

MADISON (AP) — Foxconn Technology Group said Wednesday it is shifting the focus of its planned Wisconsin campus away from blue-collar manufacturing to a research hub, while insisting it remains committed to creating 13,000 jobs as promised.

The much-ballyhooed facility was heralded by President Donald Trump and former Wisconsin Gov. Scott Walker as a once-in-a-generation opportunity to return manufacturing to the Midwest and the United States. Foxconn, a major supplier to Apple, is the world's largest contract maker of electronics and China's largest private employer.

In a statement Wednesday, Foxconn said it remains committed to the project, the creation of 13,000 jobs and "to our long-term investment in Wisconsin." But because the global market environment that existed when the project was first announced in 2017 has shifted, "this has necessitated the adjustment of plans for all projects, including Wisconsin."

Foxconn previously said it could invest as much as $10 billion in the project, but did not recommit to that number in Wednesday's statement.

Louis Woo, special assistant to Foxconn CEO Terry Gou, told Reuters in a story published Wednesday that it is scaling back and possibly shelving plans to build liquid crystal display panel screens.

"In terms of TV, we have no place in the U.S.," Woo told Reuters. "We can't compete."

Woo said a factory would not be built in Wisconsin: "You can't use a factory to view our Wisconsin investment."

Instead, Woo said Foxconn wants to create a "technology hub" that would largely consist of research facilities along with packaging and assembly operations. Woo said about three-quarters of the jobs created will be in research and development and design, rather than blue-collar manufacturing jobs.

Foxconn said in its statement that it was broadening its base of investment in Wisconsin to ensure the company and workforce will be positioned for long-term success. That includes focusing on research and development in advanced industrial internet technologies and producing high-tech applications and solutions for industries such as education, medical and health care, entertainment and sports, security, and smart cities, Foxconn said.

"Every step of the way Foxconn has overpromised and under-delivered," said Democratic Wisconsin Assembly Minority Leader Gordon Hintz in a statement. "This news is devastating for the taxpayers of Wisconsin. We were promised manufacturing jobs. We were promised state of the art LCD production. We were promised a game-changing economic opportunity for our state. And now, it appears Foxconn is living up to their failed track record in the U.S. — leaving another state and community high and dry."

The Taiwan-based company billed the massive 20 million-square-foot (1.86 million-square-meter) Wisconsin campus as its first North American manufacturing site for the next generation of liquid crystal display panels to be used in a wide variety of products, including large-screen TVs, self-driving cars, notebooks and other monitors.

Wisconsin state and local governments promised roughly $4 billion to Foxconn, the largest incentive in state history and the biggest promised by a state to a foreign corporation in U.S. history. Foxconn was required to invest $10 billion and create 13,000 jobs to get the full incentives.

It hired 178 full-time employees rather than the 260 targeted in 2018, failing to earn a state tax credit worth up to $9.5 million.

The president of Wisconsin's Technology Council, Tom Still, said he's not surprised that Foxconn wants to change course since televisions are becoming less expensive and iPhone sales are declining.

Still, a supporter of the project, noted the company has already invested as much as $200 million in Wisconsin so he's not worried that the company might pull out.

"I do think that it's likely that they'll adjust to what the market conditions are," said Still, whose group nurtures tech in Wisconsin and advises state leaders on policy.

Assembly Speaker Robin Voss (R) and Senate Majority Leader Scott Fitzgerald (R) released a joint statement saying, "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. Governor Evers has an anti-jobs agenda and pledged to do away with a successful business incentive for manufacturing and agriculture."

The statement concludes with, "This news only strengthens our commitment to Wisconsin: we aren't going to let our state move backward."

Democratic critics, including Evers, said the incentives promised to Foxconn were too rich and questioned whether the company would ever fulfill its job creation and investment promises. They also said the massive plant that was relying on water from nearby Lake Michigan posed serious environmental risks.

Secretary-designee Joel Brennan said on behalf of Gov. Evers, "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."

A spokesman for the Wisconsin Economic Development Corporation, which brokered the deal with Foxconn, didn't immediately respond to messages seeking comment, nor did Wisconsin Republican legislative leaders who pushed the Foxconn project .

The White House also has yet to comment. Last summer, Trump highlighted his economic policies at a groundbreaking event for the massive Foxconn complex, which state officials initially said could house 11 football fields.

"America is open for business more than it has ever been open for business. Made in the USA: It's all happening and it's happening very, very quickly," Trump said in June after visiting the Foxconn site. "Today we're seeing the results of the pro-America agenda. America First, Make America Great Again. Greatest phrase ever used in politics, I suspect."

Still, the technology council head, said Foxconn can succeed if the plant becomes more research-oriented because their areas of interest match up with Wisconsin's strengths — such as robotics, medical imaging, and industrial imaging.