It’s a groundbreaking ceremony for (a much smaller) Foxconn today. This very morning one reads confirmation – yet again – that taxpayers’ billions for Foxconn are paying for a project that’s now a giant bait & switch. Rick Romell reports Foxconn scales back plans for its first factory in Mount Pleasant:
The Foxconn Technology Group manufacturing complex that President Donald Trump helps launch Thursday in Mount Pleasant will differ significantly, at least initially, from the original plans.
While two economic-impact analyses prepared last year and the state’s contract with Foxconn say the company will build a type of factory that carves display panels out of immense sheets of wafer-thin glass, Foxconn now says it first will erect a plant that uses much smaller sheets of glass.
Such factories typically are much smaller and less-expensive than the sort of plant Foxconn originally planned, industry observers say.
Here’s that switch:
Last year, as the company was considering Wisconsin as a potential site for a massive new display panel factory, Foxconn’s consultant analyzed the impact of a “Generation 10.5” liquid crystal display plant, and shared the findings with state officials.
A second consulting firm, hired by the Wisconsin Economic Development Corp., also analyzed the impact of a Generation 10.5 plant to review the findings of Foxconn’s consultant.
Contracts Foxconn later signed with both the state and the local governments also refer to the “Generation 10.5” fabrication facility the company will operate.
But Foxconn no longer plans to initially build such a plant. Instead, the company first will build a “Generation 6” factory — Gen 6 in industry shorthand. Such plants are much smaller and much less costly than Gen 10.5 factories, use different machinery and turn out different arrays of products, industry watchers say.
The shift was first reported in May by Japan-based Nikkei Asian Review, in a story citing industry sources, and then by Milwaukee publication BizTimes last weekfollowing an interview with Foxconn executive Louis Woo. A Foxconn spokesman confirmed the BizTimes report.
Here’s how supine the Walker Administration is:
Asked whether Foxconn had communicated with WEDC about its change in plans for Mount Pleasant, Mark Maley, WEDC’s public affairs and communications director, said by email:
“It’s up to Foxconn — and not state government — to determine what the best use of that facility is. Foxconn is one of the largest companies in the world and has a 44-year history of success, so we’re confident it will continue to make decisions to ensure that continued success. It’s not the state’s role to get involved in the business operations of one of the largest and most successful companies in the world.”
Smaller and less costly for Foxconn; different from the contracts with the state, to the benefit of Foxconn. The WEDC’s spokesman won’t question Foxconn’s downsizing even with billions of public money spent to support that Taiwanese company. Foxconn’s not an independent third party – it’s a publicly-subsidized foreign corporation building at Wisconsin taxpayers’ expense.
Everyone on the state side of this project should be dismissed or voted from office.
Among those who should go – if competency and integrity mean anything – would be Matt Moroney, the same longtime Walker operative that Whitewater’s 501(c)(6) business league trotted out as a guest speaker on the Foxconn project. Moroney’s presentation as dutifully reported (and ludicrously unquestioned) in the Daily Union shows that neither the organization that invited him nor the paper that reported on his invitation has even a thimbleful of economic or policymaking sense. See A Sham News Story on Foxconn and Foxconn as Alchemy: Magic Multipliers.
Flacking Foxconn won’t bring a greater Whitewater, but instead only a lesser Wisconsin.
Previously: 10 Key Articles About Foxconn, Foxconn as Alchemy: Magic Multipliers, Foxconn Destroys Single-Family Homes, Foxconn Devours Tens of Millions from State’s Road Repair Budget, The Man Behind the Foxconn Project, A Sham News Story on Foxconn, Another Pig at the Trough, Even Foxconn’s Projections Show a Vulnerable (Replaceable) Workforce, Foxconn in Wisconsin: Not So High Tech After All, Foxconn’s Ambition is Automation, While Appeasing the Politically Ambitious, and Foxconn’s Shabby Workplace Conditions.
So: the State agreed to pay for 10 lbs. of hamburger and Foxconn was to deliver 10 lbs of hamburger. (It is very debatable that the 10 lbs of hamburger from Foxconn is worth what the State agreed to pay for it- maybe we’re giving up money that is worth 15-20 lbs., or more, of hamburger). Now- the State is telling us that we will be receiving 6 lbs. of hamburger, instead of the agreed-to 10 lbs. The State must adjust its payment downward- significantly. The ROI on this project is very suspect to begin with (20% of workforce coming from Illinois, average workers’ wages, robotics-usage, waste water/ environmental issues, etc…)… and now?!? The latest is that a Foxconn executive is on record saying something to the effect, “WI residents should be more thankful for what we are going to do for them..” #boondoggle.
There it is in your analogy – the heart of the matter. If the costs were slight, then one might not be concerned.
Yet, the costs are anything but slight, and our state has truly pressing needs too long neglected.
That’s it: #boondoggle.
The glass excuse is an interesting issue. The glass panels for Gen 10.5 LCD’s are very large, about 11’x9.5′ and extra thin. It’s not like window glass at all. They don’t travel all that well. There is no way that Foxconn didn’t know where their glass was coming from, so it certainly seems like they threw an “Oh, by the way…We need you to give us 2/3 of the money we need to build a glass factory in Wisco-World” move at Walker. That WEDC didn’t ask the right questions seems entirely plausible, given WEDC’s legendary incompetence.
This Baby Ruth just floated to the top of Walker’s hot tub and he is now being very quiet about how did such a smart move with Foxconn.
You’ve been clear, and right, about the direction of this project (and its technical limitations) from the beginning. It’s like watching an auto accident unfold slowly before one’s eyes, where someone else has already explained the regrettable trajectories.