Reuters reports Foxconn Reconsidering Plans to Make LCD Panels at Wisconsin Plant.
Foxconn Technology Group is reconsidering plans to make advanced liquid crystal display panels at a $10 billion Wisconsin campus, and said it intends to hire mostly engineers and researchers rather than the manufacturing workforce the project originally promised.
Announced at a White House ceremony in 2017, the 20-million square foot campus marked the largest greenfield investment by a foreign-based company in U.S. history and was praised by President Donald Trump as proof of his ability to revive American manufacturing.
Revival Not
Foxconn, which received controversial state and local incentives for the project, initially planned to manufacture advanced large screen displays for TVs and other consumer and professional products at the facility, which is under construction. It later said it would build smaller LCD screens instead.
Now, those plans may be scaled back or even shelved, Louis Woo, special assistant to Foxconn Chief Executive Terry Gou, told Reuters. He said the company was still evaluating options for Wisconsin, but cited the steep cost of making advanced TV screens in the United States, where labor expenses are comparatively high.
Earlier this month, Foxconn, a major supplier to Apple Inc., reiterated its intention to create 13,000 jobs in Wisconsin, but said it had slowed its pace of hiring. The company initially said it expected to employ about 5,200 people by the end of 2020; a company source said that figure now looks likely to be closer to 1,000 workers.
Conn Job
Rather than manufacture LCD panels in the United States, Woo said it would be more profitable to make them in greater China and Japan, ship them to Mexico for final assembly, and import the finished product to the United States.
“In terms of TV, we have no place in the U.S.,” he said in an interview. “We can’t compete.”
This was a “Conn” job from the get go. Foxconn had to know US labor costs would be too high. The company never intended to manufacture here.
The clear intent was to gain access to US engineers and researchers.
Had Foxconn stated that upfront, there would have been no deal. So Foxconn promised 13,000 jobs and got $4 billion in tax breaks.
Mission Accomplished
Foxconn will lose those tax breaks because it will not meet hiring goals, except its own of course. The entire purpose of this con job was to hire the brightest US engineers.
The manufacturing jobs will be in China with assembly in Mexico. Foxconn gets US engineers.
Mission accomplished.
Mike “Mish” Shedlock
Sounds like a con job to me to. China is good at doing that.
“In terms of TV, we have no place in the U.S.,” he said in an interview. “We can’t compete.”
Then there are the H1B’s brought in to put currently working Americans out of a good paying job right in our own country, as the immigrant will work for less pay.
The surprise is that this is a surprise! I presume that the only ones that are surprised are those who refuse to believe that someone is ready to work for $2 per hour is more economical than someone who earns $40 per hour. Hello GOP and its fans…
Foxconn making LCDs in the US never made sense. Almost all LCDs are made in China. The entire supply chain is there. Why would anyone make LCDs in the US? It would be like building a corn processing plant in Hawaii.
Yes, compared to places with much weaker labor and environmental laws the USA is a more expensive place to manufacture.
The brightest engineers don’t all live in the USA… besides the plethora of PhDs from India and Asia resident on B1 visas. However what a USA based research facility populated by US citizens does offer is full access to ITAR regulated technologies and ideas. It’s nice to think the USA is the technological center of the world but actually its more a case of throwing $600 billion at the defense industries to get a 100 million dollars worth of usable innovation 10 years hence.
Yes please follow the ball
Focxonn initially planned to manufacture advanced large screen displays for TVs
Foxconn later said it would build smaller LCD screens instead.
Foxconn won’t build any screens or LCDs
Yes, please keep your eye on the ball
Cant believe i read this tripe here .. what are you doing ? you are making assumptions without any single shred of proof .. US Engineers recruited and that’s their primary goal ?
this is just pure economics , would FOXCONN do this if APPLE still flying high ? Money Talks and sorry mish , you just adding Bullshit to this news ..
The “slave labor” is too high!!Avg wage in US is less than $10 an hour,mexican $2 an hour,Chinese roughly $1-$1.5 an hour,so can you reall blame them?
Even cheaper wages in Haiti. Yet no companies move there.
Maybe there is more to it.
Haiti’s education system doesn’t produce the workers needed for tech manufacturing.
Foxconn may be big but they don’t have a market share in TV’s. China mfg’s Sony, Samsung & TCL has been price dumping in our market for at least 3 years. They have built huge plants that can make displays for everyone in the world. Please try to follow the slow moving ball.
Somehow I think there is waaaaaaaay more to this story.
We used to have journalists that used to investigate this kinda of stuff.
Rather than just say “US labor costs too high (like this wasn’t researched and understood in great detail beforehand)” and “Trump man baaaaad…”
Like there is now a new far left wing anti-business Governor of Wisconsin – is he destroying this deal to pay back unions? These were nearly all non-union jobs.
or
Owen-Corning did not get any deals (near the same terms) to come to Wisconsin to build their TV glass panel factory so Foxconn determined to get these panels elsewhere?
US labor cost is high , you can see how expensive the US weapons system compared to other nations such as russia and china who made better weapons far cheaper.. China made more modern Destroyers and Frigates in one year than US made in 5 years
Mish tackled the point about the labor costs in his posts, and no-one said that it is due to Trump the deal changed. Mish’s hypothesis is that the deal was set up to be played this way by Fox Conn, which seems like a fair probability to me. Ironically this is sntirely in line with the Art of the Deal, where breaking promises is part of the strategy to squeeze out more.
Um, where will the engineers come from? There already aren’t enough, and Wisconsin is not a location which will attract many millennial’s away from Austin, San Jose, and New York. Big H2-B push coming up?
Number of employed engineers in the US is down by about 25% over 10 years ago, there’s no shortage at all. Also, University of Wisconsin produces alot of talent. Wisconsin: reasonable cost of living, nice people. I’d move back there in a second if I could get a job.
There’s tons of engineers unemployed or underemployed. Firms throw hundreds, sometimes thousands of job applications from US citizen engineers into the garbage, most often sight unseen.
“The manufacturing jobs will be in China with assembly in Mexico. Foxconn gets US engineers.”
It was the same with the Carrier plant that Trump claimed he had saves. Carrier pulled a fast one on him, saving engineering jobs on the East Coast but closing down the other factories and moving them to Mexico as soon as Trump and the media spotlight moved away.
Here are some facts to go along with your Trump Derangement Syndrome…
Stop reading propaganda and go to the underlying figures:
Year Mfg Jobs
2008 160841
2009 142174
2010 138344
2011 140725
2012 143124
2013 144230
2014 146210
2015 148022
2016 148231
2017 149333
2018 152506
Just to make it easy for you:
From 2012 to 2013 there were 4.78 million new manufacturing jobs.
From 2017 to 2018 there were 4.27 million new manufacturing jobs.
Trump isn’t even able to beat Obama when he pumps $1.5T into the economy, but Mike Pence and Forbes don’t let reality stand in their way.
Let me make it easy for you.
Those with TDS are a funny lot. They present data with a yuuuuge graph showing manufacturing jobs exploding under Trump (that’s the line on the graph at your BLS website going from lower left to upper right) and just ignore it.
Fyi – the same data is in the Forbes article that you obviously didn’t read.
‘At a town hall in June 2016, President Obama famously said that some manufacturing jobs “are just not going to come back.” He went on to mock then-candidate Trump by saying he’d need a “magic wand” to make good on this manufacturing job promises.’
Did it ever occur to you to ask why Forbes would cherry pick 21 months for the comparison? The numbers are there for you to see – I gave them to you. You don’t need some bias fool to interpret them to you in a propaganda rag.
Take a look at the “yuuuuge graph” and show me where the 10X explosion in growth happened?
A blithering fool in a low end rag played with numbers. The graph shows fairly steady growth, with some level areas and some areas of steeper growth. The steepest growth was in 2013 and 2014, but that was inconvenient for this blithering fool so he picked one 21 month period and compared it to another convenient 21 month period to suit his story. Forbes, of course, lapped it up as it plays into their larger themes.
You were the person asking where all the investigative journalists went. Well, they went where the money is, and that is where paid subscriptions support quality journalism (since Google and Facebook have disrupted the advertising market). Check it out, but here is the rub, you have to be able to take the reality you don’t like with the reality you do. If you want to feel good, read the free rubbish that fits your preconceived bias – e.g. HuffPo, Forbes, Infowars, Fox News, ,Daily Kos, etc.
This is useful:
LMAO! This is what a bought Wharton degree gets you. Incompetent, clueless twit.
Wouldn’t you know it after all that crooked eminent domain wrangling June 2018…
“More than four square miles of Mount Pleasant were declared Monday to be a blighted area, giving the Village Board further leverage to seize property by eminent domain for Foxconn Technology Group’s massive manufacturing complex and surrounding development. Trustees voted 6-1 to declare as a blighted area some 2,800 acres of open farmland and a few dozen homes”.
Blighted farmland?
Every worker who is willing to work for lower wages in order for this to be a competitive strategy, please raise you hand. Yeah…. I thought so. And last I heard about half of college grads were not working at jobs within their discipline two years after graduation. College degrees are not guarantees to high paying positions.
You are right. I propose we classify college degrees into three buckets:
Degrees for which there is currently high demand: Engineering, Electrical Engineering, Chemistry, the Professions (e.g. Medicine), etc.
Pure (research) Degrees: Physics, Math, etc. where the graduate has a universal set of skills that typically don’t match to any specific profession, but are valuable in innovative areas where there are no, or very few, graduates – e.g. Bioinformatics today, or Computer Programming in the 1980s. These are also valuable for advanced research positions.
Degrees that don’t fall into [1] or [2]. Back in the 1970s and maybe the 1980s a far lower percentage of high school leavers went to tertiary education and thus a 4 year degree was a symbol of rigor in its own right, and thus very often a door to a higher level position in business. But now that 30%+ of kids go to college, the value of these degrees has waned.
This seems to be a common story. States and localities grant tax advantages only to have the number of jobs be less than promised. Delaware spent $30 million in infrastructure to attract AstraZeneca several years ago. That ended with AZ tearing down 340,000 sq feet of research lab space several years later with jobs disappearing. Bloom Energy was attracted to the state by promising jobs which have never showed up. Part of Bloom’s incentive package is being paid for by an energy surcharge each Delawarean pays on their electric bill. Buying jobs with tax incentives does not seem to be a great strategy for the taxing authorities.