Foxconn’s Empty Wisconsin Factories Are Still Empty, One Year Later
More than a year ago, news began to surface that Foxconn would renege on its promises to Wisconsin after having been awarded $4.5B in tax credits in exchange for building in WI in the first place. Then, after a conversation with Trump, the project was supposedly back on. That was in late Jan / early Feb of 2019.
In May of 2019, The Verge reported that all of Foxconn’s WI “buildings” were, in fact, empty shells of buildings with no equipment or hardware inside them to speak of. Foxconn took exception to this report and denounced The Verge’s reporting. Foxconn’s Alan Yeung stated that the story had “a lot of inaccuracies, and we will actually make a correction, and we will make a statement about that.”
This is another PR tactic, to briefly continue the MediaTek conversation from last week. Announce that there are lots of inaccuracies and that you will “actually make a correction.” Then do nothing. People will often treat your declaration as equivalent to having proved that said inaccuracies actually exist.
One year later, the Verge revisited the same empty factories it found in 2019, to see if any work had begun. Here’s the 2019 picture:
And here’s an updated picture in 2020:
This is completely normal for Foxconn, which has a long history of making huge announcements that it never actually bothers to complete. The company has reversed itself multiple times on what sort of facility would be built in WI. Initially, it was a leading-edge Gen 10 LCD manufacturing facility (back in 2017), which would employ 13,000 mostly blue collar workers. Then it was a Gen 6 facility for building smaller panels of glass, with less demand for workers. Then it was a knowledge and research hub for “AI 8K+5G” which you might notice is less a coherent market strategy and more a bunch of buzzwords with no particular relation to each other.
This (Still) Isn’t How You Build a Manufacturing Facility
What we wrote over a year ago is still true:
When foundries and IDMs like TSMC, Samsung, Intel, or GlobalFoundries make plant announcements, they build what they said they would. If those plans change mid-cycle, it’s treated as major news. Yet since signing off on the Wisconsin deal, Foxconn has made multiple dramatic alterations to its plans for the facility. First, it was a Gen 10.5 plant. Then it was a Gen 6 factory. Then it became a buzzword ecosystem to promote and research “AI 8K+5G” (that’s the actual term used), with most of the manufacturing done by robots. Yesterday, Foxconn told Reuters it would create a “technology hub” in Wisconsin, with research facilities, packaging, and assembly operations, with a focus on producing specialized tech for industrial, healthcare, and professional applications. That’s four distinct visions for the purpose of a facility that’s supposedly been under construction for over six months.
And now that the facility has supposedly been under construction for over 18 months and there’s nothing to show for it, will Foxconn once again claim it’s been misrepresented in the media? Undoubtedly. Covid-19 will almost certainly be blamed for the company’s total physical inaction over the previous 12 months, as though the outbreak of coronavirus in March 2020 had actually prevented Foxconn from taking any action to complete this facilities for all of 2019. Don’t believe it. Foxconn has a long history of this sort of thing. The company has promised to open manufacturing plants in Pennsylvania, Indonesia, Brazil, and Vietnam. None of these initiatives came to anything resembling what was originally promised on the rare occasions that they came to anything at all. The company has a very long history of overpromising and then not-delivering.
The chances that Foxconn ever completes this US facility seem slim indeed, at this point. According to the Verge’s follow-up reporting, Foxconn spent 2019 responding to periodic investigations by pledging that it still intended to build factories, than failing to do so. No building permits have been issued and other building tenants have seen no Foxconn employees. A former Foxconn employee told the publication that the company never had any idea of what to do with the “innovation centers” it planned to build and had constantly pivoted from one idea to the next.
“The entire time I was at Foxconn, the only thing that was profitable were those spaces where we had leasing tenants. Nothing else brought in profit, or revenue,” he said. “For the ones that were completely empty like in Eau Claire, obviously we didn’t bring anything in. That was a loss.”
Foxconn is building one facility in Mount Pleasant, WI, where it employs more than 550 people, a far cry from the more than 13,000 it originally promised. The plant does not make LCD screens at all, despite being supposedly intended to do so. Instead, it’s supposed to build robotic coffee kiosks and alarm system components. The facility has supposedly pivoted to making ventilators instead, but under the circumstances, ¯\_(ツ)_/¯).