In a huge blow to president Donald Trump's ego, Hon Hai Precision Industry Co., Ltd, or Foxconn, said it will no longer build a $10 billion factory in Wisconsin to produce liquid crystal display (LCD) panels used in computer screens, TVs and car dashboards.
Based in the Republic of China (Taiwan), Foxconn is the world's largest contract electronics manufacturer. It is the main manufacturer of Apple's iPhones.
Foxconn, however, said it will instead establish a "technology hub" in Wisconsin rather than a factory. It still plans to hire up to 13,000 workers for this tech hub, which will be located at the Wisconsin Valley Science and Technology Park and cover some 20 million square feet.
A top Foxconn executive said the company has decided a plant in Wisconsin "can't compete" with lower-cost flat panel plants elsewhere in the world. The technology hub Foxconn now says it will build will largely consist of research facilities plus some packaging and assembly operations.
Three-quarters of Foxconn's eventual jobs will be in research and development and design, not blue-collar manufacturing jobs, according to Louis Woo, special assistant to Foxconn CEO Terry Gou.
In a statement, Foxconn said it remains committed to the Wisconsin Valley Science and Technology Park project, the creation of 13,000 jobs, and to its long-term investment in Wisconsin.
It said the global market environment that existed when the project was first announced has changed. Foxconn noted that as its plans are driven by its customers, this has necessitated the adjustment of plans for all projects, including Wisconsin. While the project's focus will be adjusted to meet new realities, the Wisconsin project remains a priority for Foxconn.
If Foxconn had pushed through with its LCD factory, it would have qualified for up to $3 billion in state tax credits and breaks. Analysts said these overly generous incentives are among of the biggest incentive packages ever promised to a company to locate a plant in the United States.
The state government, however, appears to still want Foxconn to do business in the state, albeit in a downgraded state. The state incentive package allows Foxconn to adjust its plans in response to changing business conditions, said Mark Hogan, CEO of the Wisconsin Economic Development Corporation, which negotiated the package.
Hogan pointed out that Foxconn will get the full incentive package only if it hits all the targets for job creation and investment in the state.
Foxconn's decision to trash its LCD plant is a huge embarrassment for Trump, who bragged the plant is proof he's creating a lot of jobs in the USA.
"This is a great day for American workers and manufacturers and everyone who believes in the concept and the label 'Made in the USA,' " said Trump in a statement released by the White House. Trump even took part in the groundbreaking for the plant at Mt. Pleasant on June 28, 2018.
Foxconn in June 2018 pledged to invest $10 billion to build the LCD plant that could employ up to 13,000 workers and be eligible for $3 billion in subsidies from state taxpayers. The factory would have covered 1,000 acres.
