Foxconn's Wisconsin Site Will No Longer Be a Factory for Smartphone Displays, Instead Focusing on R&D

[MacRumors]

Foxconn is once again changing plans for its upcoming Wisconsin-based plant in the United States, according to a new report out today by Reuters. Originally set to produce large television displays, and then small to medium displays for smartphones, the location will now pivot to become largely focused on research and development.

Foxconn intends to hire "mostly engineers and researchers" instead of manufacturing workers at the Wisconsin plant. The plans to build smartphone displays, for companies like Apple, have either been greatly scaled back or shelved completely. This information comes from Louis Woo, assistant to Foxconn CEO Terry Gou.

Although the company has yet to formally announce this pivot, Woo says that Foxconn is "not building a factory" in Wisconsin at this point. According to Woo, the steep cost of making advanced screens for TV sets and other devices in the United States led to the decision.

Instead, Woo notes that Foxconn's more profitable solution is to make LCD panels in greater China and Japan, ship them to Mexico for final assembly, and import the finished products to the United States.

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.

The Wisconsin project was announced at the White House in 2017, and was used as an example by the Trump administration of a foreign company extending its manufacturing business into the United States. Now, Woo says that three-quarters of the Wisconsin plant will be staffed by people in R&D and design fields, or "knowledge" positions, rather than blue collar manufacturing jobs.

At the time, Foxconn said it would grow to employ as many as 13,000 workers at the site. In recent weeks, the company confirmed it had slowed its pace of hiring, down to about 5,200 people by the end of 2020. Now, a source within the company claims that figure is closer to 1,000 workers to start off. It's unclear if Foxconn still plans to grow to the full 13,000 workforce, and if so when that will happen.

Article Link: Foxconn's Wisconsin Site Will No Longer Be a Factory for Smartphone Displays, Instead Focusing on R&D

 

[applebreed]

World's most expensive campaign advertisement . . . and the guy that put the scheme together didn't even win his reelection bid.

 

[M.PaulCezanne]

Difficult to make screens at 25 below zero.

 

[DrJohnnyN]

Foxconn is synonymous with suicide. What a shame.

 

[9081094]

Hiring engineers for R&D... is this the legal way of luring technology out of the USA and mass produce in China?

 

[applebreed]

Hiring engineers for R&D... is this the legal way of luring technology out of the USA and mass produce in China?

I know this area very well and it's a legal way of saying that nobody around that plant that could really use a good factory job is going to get one.

 

[Sasparilla]

Bummer, but the chickens of an outrageously expensive PR "win" for former gov / legislature in WI are coming home to roost. Not the first time foxconn has drastically changed a deal in the U.S.. It is the first time Wisconsinites are being left with the bill though - if memory serves each job originally was going to be like a $230,000.00 in WI citizen funds each, probably going to be much more expensive now that its scaled back to 1,000 jobs.

Yep, heard about this story in the Reply All podcast...This is exactly what they said would happen.

https://itunes.apple.com/us/podcast/reply-all/id941907967?mt=2&i=1000425267892

Episode and date please? I'm not finding it looking through the shortened lists and want to hear these guys.

 

[ersan191]

Man, Wisconsin got absolutely screwed - last I read they were giving Foxconn something like $3 billion in tax breaks to build the plant. Not to mention they gave away the land for free and had to pay hundreds of millions to update the roads and infrastructure. I would be livid if I lived there.

 

[lunarworks]

World's most expensive campaign advertisement . . . and the guy that put the scheme together didn't even win his reelection bid.

Looks like someone got 'conned.

 

[joshavtech]

Man, Wisconsin got absolutely screwed - last I read they were giving Foxconn something like $3 billion in tax breaks to build the plant. Not to mention they gave away the land for free and had to pay hundreds of millions to update the roads and infrastructure. I would be livid if I lived there.

Yep, heard about this story in the Reply All podcast...This is exactly what they said would happen.

https://itunes.apple.com/us/podcast/reply-all/id941907967?mt=2&i=1000425267892

 

[mtneer]

Did the state really throw in everything they had before Foxconn even scratched the surface? Who makes these kinds of front loaded deals? They should have trickled the benefits with the company achieving certain milestones. I just hope the bozo government negotiators put in some clawback riders in there.

 

[johannnn]

Foxconn is synonymous with suicide. What a shame.

LOL stop with the fake news. Foxconn have lower suicide % than the country it operates in (China).
Learn the facts.

 

[genovelle]

I know this area very well and it's a legal way of saying that nobody around that plant that could really use a good factory job is going to get one.

In fact they realized that moving such an operation to the US would be limited in profitability for them, while exposing them to unnecessary uncertainty from a trade perspective. Remember GM and Ford both had to scrap plans because they lost over a billion in expected profit because of abrupt trade decisions that affected their manufacturing business.
I would want to build a plant under those conditions. Too much uncertainty.

 

[9081094]

I know this area very well and it's a legal way of saying that nobody around that plant that could really use a good factory job is going to get one.

Sad, I was hoping it would be a good stimulant for the local economy.

 

[uecker87]

Man, Wisconsin got absolutely screwed - last I read they were giving Foxconn something like $3 billion in tax breaks to build the plant. Not to mention they gave away the land for free and had to pay hundreds of millions to update the roads and infrastructure. I would be livid if I lived there.

Yep. I live there. Can confirm that I’m pissed.

But also can confirm that we thankfully got the idiot that signed off on this deal out of office.

Everyone except for the Walker/Trump/GOP camp knew it was an absolutely horrible deal.

 

[PickUrPoison]

Is there even a labor pool of R&D engineers and researchers to draw from? This sounds like as poorly a thought out idea as their previous ones.

Factory asssmbly jobs are possible in the US, but the federal minimum wage of $5.75 (welcome to the 1970s) would have to be repealed; these jobs are more like $2.50-3.00.

 

[MacOH21]

I guess it was hard to find a company that could make custom screws?

 

[applebreed]

Is there even a labor pool of R&D engineers and researchers to draw from? This sounds like as poorly a thought out idea as their previous ones.

Yeah – Milwaukee, Chicago, the surrounding suburbs of each; maybe some people in the general area but they'd still be considered part of the Milwaukee-Chicago metropolitan area, anyway. The problem for Wisconsin, though, is that the plant is close enough to the Wisconsin-Illinois border (with fast access to Chicago via I-94 and commuter rail) that the Illinois hires wouldn't feel any need to move to Wisconsin. Everyone else is already close-by.

So, basically, no new retail, real estate, or commercial business development spurred by this. Maybe some new fast food and chain restaurants to serve a lunchtime crowd, but it sounds like there won't even be enough long-term traffic for that.

 

[jmgregory1]

Yeah – Milwaukee, Chicago, the surrounding suburbs of each; maybe some people in the general area but they'd still be considered part of the Milwaukee-Chicago metropolitan area, anyway. The problem for Wisconsin, though, is that the plant is close enough to the Wisconsin-Illinois border (with fast access to Chicago via I-94 and commuter rail) that the Illinois hires wouldn't feel any need to move to Wisconsin. Everyone else is already close-by.

So, basically, no new retail, real estate, or commercial business development spurred by this. Maybe some new fast food and chain restaurants to serve a lunchtime crowd, but it sounds like there won't even be enough long-term traffic for that.

It's unfortunate that they couldn't figure out something to make in the proposed factory, even if it ended up being manned by robots, because there would have been some bump just from the logistics and services required to run a giant plant like they talked about. Agree with you that they'll now pull prospective engineering employees away from Chicago and Milwaukee area businesses, so it won't necessarily even provide an increase in tax base, if you're talking 1,000 people over 5-10 years.

The Wisconsin State Journal should be hounding Walker on this debacle, reminding all the rural Walker supporters that he really didn't have their backs, or fronts.

 

[DrJohnnyN]

LOL stop with the fake news. Foxconn have lower suicide % than the country it operates in (China).
Learn the facts.

As a Chinese citizen (you know, where the company is based), whose entire family is heavily involved in tech, I am more than intimately aware of The Facts. The stats you read on a spreadsheet aren't necessarily the reality.

 

[69Mustang]

Yeah – Milwaukee, Chicago, the surrounding suburbs of each; maybe some people in the general area but they'd still be considered part of the Milwaukee-Chicago metropolitan area, anyway. The problem for Wisconsin, though, is that the plant is close enough to the Wisconsin-Illinois border (with fast access to Chicago via I-94 and commuter rail) that the Illinois hires wouldn't feel any need to move to Wisconsin. Everyone else is already close-by.

So, basically, no new retail, real estate, or commercial business development spurred by this. Maybe some new fast food and chain restaurants to serve a lunchtime crowd, but it sounds like there won't even be enough long-term traffic for that.

I lived in Chicago for 3 years during the early 00's. The concerns you bring up now were the same concerns I heard back then. SE Wisconsin and NW Indiana's proximity to Chicago kinda made those areas effectively suburbs of the Windy City. Like you, I doubt too many would trade Chicago for life in Wisconsin.

 

[ThisBougieLife]

Manufacturing (especially of tech) just isn’t going to return to the U.S.. Not when it can be done for a fraction of the cost in China or Mexico or elsewhere. No one should be surprised this didn’t work out.

 

[Macaholic868]

World's most expensive campaign advertisement . . . and the guy that put the scheme together didn't even win his reelection bid.

Crony capitalism at its finest delivered on the backs of taxpayers. When will people rise up and put a stop to crap like this that anyone with a brain can see coming from a mile away?

 

[MacDann]

As a former resident of southeast Wisconsin, I can't see how this would come as a surprise to anyone. The area's politicians are wizards at doing the "This will be great for the area and its residents!!" to the locals when it comes to these sorts of projects.

I'm still pissed about the tax that was put in place in the surrounding Milwaukee counties to fund the Brewer's stadium. You would think the politicos would learn from prior actions - nearly every officeholder who voted for that tax was promptly voted out of office in the next election cycle as the voters promised to do.

MacDann

 

[AxiomaticRubric]

This puts the CON back in FoxCONn.