Foxconn: Media report about suspending construction project inaccurate

Foxconn
One of the buildings in Foxconn's proposed $10 billion manufacturing complex in the Village of Mount Pleasant is shown Thursday January 31, 2019 . Work on the complex has been suspended according to a report first published in the Japanese Nikkei Asian Review. The move is attributed, in part, to changing economic conditions. The story follows by a day a report that the company is now considering the complex to be more of a research facility than a factory. (c) Mark Hertzberg for www.racinecountyeye.com

Despite a media report indicating that Foxconn Technology Group planned to suspend work on a 20-million square-foot manufacturing campus in Mount Pleasant, the work continues and Foxconn officials are calling those reports inaccurate.

Foxconn and local officials reiterated that the construction project is moving forward and the company still plans to hire 13,000 people. But the type of jobs, the timing of those hires, and the products made at the 20-million square-foot manufacturing facility may change. This is not new news, according to state and local officials.

But the narrative around the story plays into political positioning between Republicans and Democrats at the state and federal level as media sources point to the trade war between China and the United States, and the political shift from a Republican-controlled governorship to a Democratic-controlled office.

Read the recent project update.

Taiwan-based Foxconn Technology Group makes products for the education, medical and healthcare, entertainment and sports, security, and smart cities. A story by the Journal Sentinel Thursday morning cited a story published by the Nikkei Asian Review, saying that the $9 billion project has been “suspended and scaled back as a result of negotiations with new Gov. Tony Evers.”

In a statement released on Thursday, Foxconn officials noted that the interactions they have had with Evers and his team “have been constructive” and they called the Nikkei story inaccurate.

The Nikkei story also said Foxconn isn’t planning to fully abandon the Wisconsin project, only “slow the investment pace and scale back a bit at the moment because of weakening macroeconomic conditions and the uncertainties brought by the trade war.”

Foxconn and local officials say: Construction project moving ahead

Citing anonymous sources, the Nikkei story alleged that Foxconn officials changed the construction schedule after Walker lost the election citing Walker as a “Trump ally.”

In Wisconsin, Foxconn officials remained committed to the Wisconn Valley Science and Technology Park project and said they still planned to create 13,000 jobs. But what Foxconn plans to make in those buildings has shifted as the global market remains an issue.

Meanwhile, David DeGroot, president of the Mount Pleasant Village Board, told the Racine County Eye that a number of bids totaling millions of dollars have been awarded, that up until a few weeks ago over 1,000 gravel dump trucks a day were bringing in gravel to the site and that the work is slated to begin again on the first phase of the project this spring.

“It’s business as usual for us,” he said. “They are still going to build in Mount Pleasant, in multiple phases. We just released two to three big bids on the project. The facility will be built, we just don’t know what will be coming out of the door.”

In a letter from Dr. Louis Woo, special assistant to Foxconn CEO Terry Gou, to Mark Hogan, secretary and executive director of the Wisconsin Economic Development Corporation, the development has created 1,032 jobs, 178 of those positions met the requirements for the investment tax credit, but it fell short of the number it needed to seek that credit from the state.

If the project was on shaky ground, Woo’s letter — dates January 17 — didn’t elude to any disruption in the construction schedule.

“Foxconn continues to make good progress on all fronts related to the Wisconn Valley Science and Technology Park, as well as our network of Innovation Centers established throughout Wisconsin to support the project and the state’s technology ecosystem,” Woo wrote. “We recently provided the Wisconsin Economic Development Corporation with highlights of our progress related to construction, hiring, environmental sustainability, educational initiatives, and community engagement.”

Read the full Letter to WEDC from Dr. Woo.

Political positioning over Foxconn

President Donald J. Trump and Foxconn Chairman Terry Gou shake hands before Trump’s speech at Foxconn’s Opus facility, 13315 Globe Drive, Mount Pleasant, Thursday June 28, 2018. The event followed a ceremonial groundbreaking event at one of Foxconn’s nearby construction sites. (c) Mark Hertzberg for www.racinecountyeye.com

So what’s at work here since Foxconn has for months said it will likely need to shift its production plans? Politics.

The Nikkei story asserted that Foxconn’s shift in its production decision was because of the trade war between the United States and China. The Foxconn Technology project — one of the largest manufacturing investments in U.S. history — was rolled out by President Donald Trump in 2017.

“China’s economic growth has slowed to a 28-year low, while in the U.S., President Donald Trump continues to seek wins on his vow to bring manufacturing jobs back to America,” according to the Nikkei story.

The report also pointed to issues with the leadership change at the Wisconsin State Capitol with the election of Tony Evers as governor.

Evers’ office denied the allegations Thursday in a Twitter post:
“Claims made today that @GovEvers has tried to renegotiate the Foxconn contract are false. It is unfortunate that Republicans would rather try to make headlines with political finger-pointing than work with the governor to protect Wisconsin taxpayers,” wrote Melissa Baldauff, Evers’ spokeswoman.

Officials from the Wisconsin Economic Development Corporation and Foxconn also denied that Evers wanted to make changes to the contract with Foxconn, according to the Journal Sentinel:

Mark Hogan, CEO of the Wisconsin Economic Development Corp., told the Journal Sentinel reporter that Evers never sought to renegotiate any element of the Foxconn project.

“I have been involved with the Foxconn project from day one and there never have been any side deals and the contract stands on its own,” Hogan said Thursday. “In addition, there have been no attempts by either the company or the Evers’ or Walker administrations to renegotiate WEDC’s contract.”

State Republicans – Assembly Speaker Robin Vos (R-Rochester) and Senate Majority Leader Scott Fitzgerald — blamed Ever on Wednesday for the project going south calling his position on a manufacturing and agriculture credit equated to an “anti-jobs agenda.” They also pointed to how Evers planned to do away with tax incentives for manufacturing and agriculture.

“The company is reacting to the wave of economic uncertainty that the new governor has brought with his administration,” according to the joint statement released Wednesday. “Governor Evers has an anti-jobs agenda and pledged to do away with a successful business incentive for manufacturing and agriculture.”

But Woo’s letter paints a different picture:

“We will be conducting further information sessions for contractors in coming months,” Woo wrote. “As part of the first phase of the project, we expect to start construction of facilities to house cutting-edge display development, advanced manufacturing, and 8K+5G research and development capabilities in the spring.”

About Denise Lockwood 3254 Articles
Denise Lockwood has an extensive background in traditional and non-traditional media. She has written for Patch.com, the Milwaukee Business Journal, Milwaukee Magazine and the Kenosha News.

1 Comment

  1. AP, BBC also reporting change in plans for 13,000 manufacturing jobs following analysis of market analysis (what new factors have surfaced over past 12 months?)…Owen Corning asked for but did not receive similar tax incentives, so will not move, that we know, shift from large to small screen production (plans) research facility holds promise of another sort….time will lend clarity, economics, profitability drive business decisions…politics or economics?

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