Print this page
Published in News

Foxconn scales back American plans

by on30 October 2018

May not help “make America grate” after all

Foxconn has scaled back plans for the heavily subsidised Wisconsin Gigafactory.

The plan was controversial because, while it would create 13,000 jobs the state would have to shell out a $3 billion state subsidy – giving Foxconn $230,769 for each worker. 

The details of the deal were famously written on the back of a napkin when Foxconn chair Terry Gou and the Republican governor Scott Walker first met: a $3 billion state subsidy in return for Foxconn's $10 billion investment in a Generation 10.5 LCD manufacturing plant that would create 13,000 jobs.

Foxconn increasingly found the deal complicated and the Republican government kept jacking up the subsidy to $4.1 billion.

Foxconn has repeatedly changed what it plans to do, raising doubts about the number of jobs it will create. Instead of the promised Generation 10.5 plant, Foxconn now says it will build a much smaller Gen 6 plant, which would need a third of the guaranteed investment, although the company insists it will eventually hit the $10 billion investment target.

And instead of a factory of workers building panels for 75-inch TVs, Foxconn executives now say the goal is to build "ecosystem" of buzzwords called "AI 8K+5G" with most of the manufacturing done by robots.

That has not stopped the Republicans touting the deal as campaign-style speeches across the state. In October 2017, just a month after the legislature passed the Foxconn deal, a poll showed only 38 percent of the people in southeastern Wisconsin, where the plant would be located, thought the plant would be a net positive for the state.

This was followed by a March 2018 poll, which showed that 66 percent of people in the state believed their local businesses wouldn't receive help from the Foxconn deal, and only 25 percent thought it would be beneficial.

Walker has suddenly stopped talking about Foxconn. He didn't even mention the deal in a November 2017 speech announcing his run for re-election. It was unwelcome news for Foxconn, as every Democrat running for governor tried to condemn the agreement.

It looks like if Walker gets re-elected, then he will have to re-negotiate the scaled-back deal with less tax money involved and Foxconn might not be interested any more.

Last modified on 30 October 2018
Rate this item
(0 votes)