Foxconn Technology Group is reconsidering its much-publicized plan to build a $10 billion manufacturing factory in Wisconsin. The plant was supposed to make liquid crystal display panels. The company said that it plans to hire researchers and engineers rather than a significant manufacturing workforce as earlier promised in the initial proposal. The plan was announced during a White House meeting in 2017 and was heralded by the Trump administration as an indication of growing efforts to bring jobs back to the US.
The plant is supposed to measure 20 million square feet and it would be the largest green-field investment by a foreign company in the US. Foxconn was also able to get a number of incentives from both federal and state authorities some of which were a bit controversial. Initially, the company said that the intention was to use the massive campus to build advanced large screen displays mostly for TVs and other consumer products.
Later, Foxconn said that it’s abandoning this plan. Instead, it will use the facility for smaller LCD screens. However, these plans might actually be shelved as new reports indicate that Foxconn may actually scale down significantly. According to Louis Woo, special assistant to Foxconn CEO Terry Gou, the steep cost of making advanced TV screens in the US is the main reason for the scale down. Labor expenses in the US are significantly higher compared to other countries like China. Woo said that it’s impossible to make TV screens in the US and that this plan could be abandoned completely.
Moving forward, Foxconn could replace the manufacturing campus with what it’s calling a technology hub. This hub will largely consist of research facilities as well as packaging and assembly operations. The goal is to use the plant to produce specialized tech products for the health care and industrial sectors. In essence, Woo made it clear that Foxconn will not build a factory in Wisconsin. However, the company had insisted earlier this month that it plans to create at least 13,000 jobs in the state as part of this investment but it has slowed down the pace of hiring.
Initial estimates would have seen at least 5,200 employees join the company by the end of 2020. This number is unlikely to be achieved now. In fact, Foxconn says that during this period it will only manage 1,000 workers at the facility. It’s not clear whether Foxconn intends to create the 13,000 jobs or when this will happen. But one thing is clear. The jobs the company intends to fill will largely be in R&D and design rather than blue-collar manufacturing jobs.
According to Foxconn, it’s much more profitable to manufacture LCD screens in China or Japan as opposed to the US. The products would then be shipped to Mexico for final assembly before they are imported into the US. The Wisconsin plant was seen as a huge investment and was even granted nearly $4 billion in tax breaks. But it seems things aren’t working out as expected.