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Back in 2017, Apple’s premier iPhone assembly partner, Foxconn Technology Group, announced a bold initiative to build a $10 billion LCD manufacturing plant in the heart of Wisconsin, U.S.A.
The factory would create as many as 13,000 new manufacturing jobs pursuant
Yet while Foxconn’s proposed 20 million-square-foot facility initially resulted in the firm receiving upwards of $4 billion in controversial tax incentives (for eventually employing so many Wisconsinites to build large screen LCD displays for everything from TVs, to computers, smartphones and more) — a company spokesperson announced earlier this week, via Reuters, a change in those plans.
“We can’t compete,” the spokesperson added, noting that while Foxconn is still actively evaluating options at this time, ultimately, “In Wisconsin, we’re not building a factory.”
“In terms of TV, we have no place in the U.S.,” said Louis Woo, special assistant to Foxconn Chief Executive Officer, Terry Gou, in an interview with Reuters.
“You can’t use a factory to view our Wisconsin investment.”
Ultimately, Foxconn promised an estimated 13,000 new manufacturing jobs to the benefit of local Wisconsinites. However, Woo explained to Reuters, in lieu of LCD manufacturing, his firm now wants to create a “technology hub” in the State. The tech hub would consist of R&D facilities, as well as some packaging and assembly operations focusing on “specialized tech products for industrial, healthcare, and professional applications,” he said.
But while Foxconn, earlier this month, reiterated this original goal of creating 13,000 new jobs in Wisconsin by the end of 2020, another source within the company allegedly told Reuters, as per its initial report, that this figure may be cut-back substantially as the firm “reconsiders” its plans.
A Change of Heart?
While the report triggered backlash in light of Foxconn’s original pledge, a newer report published this morning says the firm will ultimately deliver those promised jobs, one way or the other.
The new report, published Thursday morning by DigiTimes, was put-out in apparent response to Reuter’s original story — to help quell any concerns that Foxconn might be completely abandoning its plans to create 13,000 jobs in Wisconsin — which the firm reiterated will still happen (eventually).
Speaking with the publication on Foxconn’s behalf, Woo expressed that “about three-quarters” of the firm’s eventual Wisconsin-based workforce will be given R&D and design — what he described as “knowledge” — positions, as opposed to the blue-collar manufacturing jobs previously projected.
Instead, Foxconn will employ mainly engineers and researchers at the Wisconsin plant, with DigiTimes adding that the facility will also focus on the Internet of Things (IoT) devices, as well as products for the education, entertainment, security, and Smart device markets.
Ultimately, these plans align more with Foxconn’s “fluid, good business model,” Woo suggested, confirming what we already knew: that it would ultimately be more profitable for the company to make LCD displays in countries like China, Japan, Taiwan or even India, ship them to Mexico for assembly, and then import the finished product to the United States.
He cited, for example, the “steep cost” associated with building large and advanced LCD displays in the United States, where labor expenses are “comparatively high,” in justifying his company’s decision to change course.
Considering factors like the strained state of U.S. China trade relations, it’ll be interesting to see how these slightly revised proposals fly (or flop?) with the Trump Administration, as well as with State and local officials in Wisconsin, who were almost holding out hope for those 13,000 manufacturing jobs.