The Taiwanese electronics company Foxconn reneged on its promise to build a $10B facility in Wisconsin.
Despite agreeing on a massive factory that President Trump called “the 8th wonder of the world,” Foxconn now plans to build a small R&D facility.
It’s a sad but predictable outcome: The Fox-conn artists have pulled off similar scams across 3 continents.
Who wins? Spoiler: It’s not Mount Pleasant, Wisconsin.
Foxconn, which supplies components to Apple, Xiaomi, Nintendo, and Nokia, announced plans to build a massive factory in the village of Mount Pleasant, WI, (pop. 26k) in 2017 after the state agreed to provide $4B in tax credits over a 15 year period.
Local village politicians hammered out a ‘deal’ with Foxconn that promised 13k jobs for Wisconsinites at a factory that would build LCD TV screens. But yesterday Foxconn announced its manufacturing plans will not materialize after all.
“In terms of TV, we have no place in the US,” a special assistant to Foxconn CEO Terry Gou told Reuters. Instead, Foxconn plans to build a small ‘technology hub’ that will only serve as an R&D facility.
Based on its contract, Foxconn will still receive benefits even if it under-delivers: To remain eligible for its enormous tax benefits this year, Foxconn only needs to create 520 jobs.
This leaves Wisconsin and its workers in a deep hole: Foxconn now needs 20% as many employees, and it won’t need any unskilled workers. According to budget analysts, it will take 25 years for Wisconsin taxpayers to recoup their losses.
Wisconsin politicians got played. But the Badger State isn’t the only place to get outfoxed by Foxconn: 6 other US states (and Brazil, Vietnam, and Indonesia) have fallen for Foxconn’s well-wired scheme.
Wisconsin’s woes are a good reminder that it’s nearly impossible to produce consumer electronics in America’s expensive labor market: It took far less than a Foxconn fakeout to unscrew Apple’s attempts to make ’Merican Macs.