(Reuters). Foxconn Technology Group is redefining plans for the production of modern LCD panels for displays on the campus in Wisconsin for 10 billion dollars and states that it intends to hire mostly engineers and researchers, rather than the production workforce, which the project originally promised.
PHOTO: The shovel and FoxConn logo are visible before the arrival of US President Donald Trump when he takes part in the laying of the foundations of the Foxconn technology group for his LCD display campus, in Mount Pleasant, Wisconsin, USA, on June 28, 2018. REUTERS / Darren Hauck
Announced at a ceremony at the White House in 2017, a 20 million square foot campus marked the largest foreign investment projects in the history of the United States and was marked by President Donald Trump as proof of his ability to revive American manufacturing.
Foxconn, which received conflicting state and local incentives for the project, originally planned to produce modern widescreen displays for televisions and other consumer and professional products at the facility under construction. Later it was said that smaller LCD screens would be built instead.
These plans can now be phased out or even postponed, said Fox Wu, special assistant to Foxconn CEO Terry Gow, to Reuters. He said that the company is still evaluating options for Wisconsin, but cited the high cost of making advanced television screens in the United States, where labor costs are relatively high.
“From the point of view of television, we have no place in the United States,” he said in an interview. "We can not compete."
When it comes to the production of modern screens for televisions, he added: "If a certain size of displays has more supplies, whether from China, Japan or Taiwan, we must also change."
According to Wu, instead of focusing on LCD production, Foxconn wants to create a “technology center” in Wisconsin, which will consist mainly of research centers, as well as packaging and assembly operations. It will also produce specialized technical products for industrial, medical and professional applications, he added.
“In Wisconsin, we are not building a factory. You cannot use the factory to view our Wisconsin investment, ”Wu said.
Earlier this month, Foxconn, a major supplier of Apple Inc., confirmed its intention to create 13,000 jobs in Wisconsin, but said it slowed down the pace of hiring. Initially, the company announced that by the end of 2020 it will employ about 5,200 people; A source in the company said that now this figure is likely to be close to 1,000 workers.
It is unclear when all 13,000 workers will be hired.
But Wu said in an interview that three-quarters of Foxconn's potential jobs would be doing research and development — what he called “knowledge” posts — not workplaces. Foxconn is officially known as Hon Hai Precision Industry Co.
According to Wu, instead of producing LCD panels in the United States, it would be more profitable to produce them in large China and Japan, send them to Mexico for final assembly and import finished products to the United States.
He said that this would be a supply chain that fits into Foxconn’s current “flexible, good business model.”
Strongly criticized in some circles, the Foxconn project was supported by former Wisconsin Governor Scott Walker, a Republican who helped get about $ 4 billion in tax benefits and other incentives before leaving the post. Critics of the agreement, including a number of Democrats, called it a corporate distribution, which will never lead to the promised jobs, and create serious environmental risks.
The company's own growth forecasts and employment goals show that it will take at least 25 years to pay back taxpayer investments, according to the budget analysis center of the Wisconsin project.
Foxconn CEO Gow plans to meet with the new Wisconsin Governor Tony Evers, a former agreement critic, later this year to discuss changes to the agreement, according to a source familiar with the company.
Evers could not be reached for comment.
Currently, for tax benefits, Foxconn must meet certain hiring and investment objectives. She did not reach the goal of employment in 2018 – hired 178 full-time jobs instead of the planned 260 – could not get a tax rebate of up to $ 9.5 million.
A company may be willing to give up future incentives if it cannot meet Wisconsin’s job creation and investment requirements, according to a source familiar with this issue.
Jesse Macy Yu in Taipei and Carl Plume in Wisconsin; Editing by Jonathan Weber and Paul Tomash