A lack of reliability: Foxconn adds yet another ridiculous proposal to a list of broken promises
In late February, Foxconn executives announced plans to begin manufacturing electric vehicles for California-based start-up Fisker Inc.
Both companies said the collaboration will “revolutionize the automotive industry.” They compared their work to the scientific discoveries of Isaac Newton. And hinted they could even manufacture the cars here in Wisconsin. The partnership announcement is the latest for the Taiwanese mega-manufacturer. It follows a string of high-profile announcements that have been abandoned by Foxconn or that have severely underperformed the company’s promises.
There were the coffee kiosks, which promised “a cutting-edge, cloud-based, robotic retail platform” for caffeine sales. There were the ventilators that were going to be produced in Wisconsin to help respond to the COVID-19 pandemic. Both projects ended soon after they were announced.
With Fisker, Foxconn Technology Group Chairman Young-way Liu says global leaders in innovation are joining forces. But critics who have followed the company are skeptical. Assembly Minority Leader Gordon Hintz, D-Oshkosh, is anticipating the deal to make electric cars won’t go very far, either.
“From the beginning the lack of transparency, the lack of honesty and the lack of accountability from Foxconn has really plagued the project and investment,” Hintz said. “It’s hard to take them seriously, even if there is a credible announcement.”
Hintz said the company’s Wisconsin operations have appeared to be virtually nonexistent for nearly four years.
“Time after time you have a company that seems to be trying to buy time in a state that has been waiting almost four years for something to be true, and they string people along by announcing the next best thing, but I don’t know how anyone can believe them at this point,” he said.
Along with dead-end partnerships, the one-time promise of manufacturing the latest high-tech LCD monitors in a “Generation 10.5” facility in Mount Pleasant is at a standstill. Roughly 2,500 acres of land in Mount Pleasant remain in a state of construction, marked with unfinished buildings — land that was once peoples’ homes, before they were forced out to make way for the company.
The original $3 billion contract between Foxconn and the state is being renegotiated. The state has denied Foxconn any consideration of tax credits because there’s no activity in Mount Pleasant resembling any of the detailed production included in the contract with the state, said Hintz, who is a board member of the Wisconsin Economic Development Corp., or WEDC.
The tech giant’s arrival in 2017 brought hope for more than just a massive manufacturing campus in southeastern Wisconsin. The worldwide company’s arrival brought dreams for new technologies, new educational opportunities and the possibility that the state would be put on the international stage — all promises made by Foxconn. Instead, for many, Foxconn’s failings have been a major disappointment. Here’s a look at what Foxconn promised Wisconsin — and where those promises stand today.
Making Milwaukee Foxconn’s North American Headquarters
In July 2019, Foxconn purchased a nondescript building in downtown Milwaukee and announced it would become the company’s North American headquarters. Soon, Foxconn would hire 500 employees to work on research and development, they promised. There was also talk of future expansion at the site.
A small sign was erected, but few Foxconn employees ever worked at the building. Jeff Fleming, spokesman for Milwaukee’s Department of City Development, said no one from his department has heard from the company in at least a year. Downtown Milwaukee city council member Robert Bauman said the last time he talked to anyone connected to Foxconn was about two-and-a-half years ago when he spoke to Alan Yeung, the company’s director of U.S. Strategic Initiatives.
“He assured me this was going to be a huge job generator and Milwaukee was going to be the epicenter of their business operation,” Bauman said. “I mean, we were skeptical. None of it really made sense, but you know, these were the plans they were making. They obviously were a very large employer. Maybe they knew something we didn’t. Well it turns out, they didn’t.”
Foxconn still owns the building and leases out the space. Its sign remains. Foxconn representatives did not respond to request for comment on the future of the building.
Building ‘Innovation Centers’ Across Wisconsin
In addition to the Milwaukee headquarters, Foxconn announced in 2018 and 2019 it would open so-called “innovation centers” in Green Bay, Eau Claire, Racine and Madison. Each of the centers were to employ 100 to 200 people in high-tech and research and development jobs, the company said.
Like in Milwaukee, Foxconn executives purchased buildings in each of the cities, but never moved forward with plans. Foxconn did not respond to request for comment on the innovation centers. Kevin Vonck was the development director for the city of Green Bay until August 2020 when he took a job in Richmond, Virginia. He worked closely with Foxconn on plans for the innovation center when it was first announced in June 2018, until he stopped hearing from the company in early 2020.
Vonck said he knew a 14,000 square-foot project in Green Bay wasn’t going to be high on the list of priorities for a worldwide company, but early on he said there was momentum for the project.
“Then they just seemed to slow down,” Vonck said. “The meetings just became fewer and far between, they had some staff turnover and Green Bay just didn’t seem like it was their top priority.”
The same has been true in Racine, Madison and Eau Claire, where representatives say they haven’t been in contact with Foxconn about the centers since the end of 2019.
“We were told at some point that they need to focus on meeting their obligations and the build-out of the campus in Mount Pleasant before the innovation centers,” said Shannon Powell, spokesperson for the City of Racine.
But that isn’t a good enough answer for Matthew Jewell, an engineering professor at the University of Wisconsin-Eau Claire. Jewell has been interested in the innovation centers since they were first announced as a potential place for his students to work. Foxconn planned to occupy the first floor of Haymarket Landing, a residence hall with private business space in downtown Eau Claire.
“This space is all glass enclosed on three sides, and it essentially hasn’t changed at all — bare concrete floor, bare walls, no discernible development that we can tell,” Jewell said.
Jewell said as a resident of Eau Claire, he was excited because the innovation centers were pitched as a transformational project that would bring good-paying jobs to the city.
“Certainly, as a faculty member at UW-Eau Claire, we’re looking for opportunities for students, and we were excited to get our students plugged into that, and of course that hasn’t been done,” he added.
At this point, no tax incentives have been provided to Foxconn for the innovation centers, and the company has reportedly been paying taxes on the buildings in all four cities.
Investing In Wisconsin’s Higher Education
In August 2018, Foxconn and its chairman and founder, Terry Gou, announced plans to invest $100 million in engineering and innovation research at the University of Wisconsin-Madison.
At the time, Gou said the agreement would establish the Foxconn Institute for Research in Science and Technology (FIRST), which would have its main location at the Wisconn Valley Science & Technology Park near Racine and would also have an off-campus presence in Madison. Since the 2018 announcement, the research center and off-campus location have not been established.
“At Foxconn, we see our role as not only being a major investor in Wisconsin, but also a long-term partner to the local community,” Gou said in 2018. “This includes promoting a vibrant environment that nurtures and enables Wisconsin’s talented workforce, allowing them to tap the immense opportunities that Wisconn Valley has to offer.”
In a statement, UW-Madison spokesperson John Lucas said, “A $700,000 sponsored research project in the College of Engineering represents Foxconn’s investment at the university, to date.”
The $700,000 is part of the $100 million promise — less than 1 percent. Lukas declined to provide further details about the project.
Lucas said the university will “continue to engage in discussions with corporations, including Foxconn, interested in sponsored research or other educational partnerships.”
Lucas referred all other questions to Foxconn, which did not respond to requests for comment.
Growing Wisconsin’s Ginseng Industry
In September 2018, Foxconn signed an agreement with the Ginseng Board of Wisconsin to jointly develop Wisconsin’s ginseng industry and grow its newly-established Wisconsin-based brand.
Jackie Fett, a spokeswoman for the Ginseng Board, said Foxconn developed the YongYue Health Management group to manage the Ginseng line as a separate entity of the Foxconn Corporation after the signing of the agreement in 2018. That product line is based in Taiwan, Fett said. The board visited Foxconn in China in November 2019.
“In regard to advancing the technology of the Wisconsin ginseng industry, there have been no new developments,” Fett said, adding that the growing and harvesting process of ginseng requires a lot of hand labor. “There have been no new technological developments since 2018.”
Turning Mount Pleasant Into Foxconn’s Manufacturing Center
Foxconn originally proposed a “Generation 10.5” facility that would manufacture the latest high-tech LCD monitors in Mount Pleasant. In return, the state’s GOP leaders, under former Governor Scott Walker, signed a $3 billion tax incentive deal based on job creation.
At the local and regional levels, Mount Pleasant and Racine County created a tax-increment financing district in 2017 to pay for a $764 million investment to support the Foxconn project. The public investment was later increased to $911 million.
Foxconn has changed its plans several times, and hasn’t been clear about what it’s building or how many people it will employ. Under the original contract, Foxconn was expected to have 2,080 people employed by the end of 2019. The company had employed 281 people in 2019, according to the Wisconsin Department of Economic Development Corp.
Because of this, the state, under Governor Tony Evers, has asked the company to renegotiate its contract. Foxconn representatives say they’re optimistic an amendment to the original $3 billion contract with the state is “within reach.”
“In response to market conditions that were unforeseeable three years ago, Foxconn formally came to the table with WEDC in August 2020 with a desire to lower taxpayer liability in exchange for flexibility that incentivizes future business development and job creation in Wisconsin,” Foxconn said in a February 24 statement. Meanwhile, Foxconn has announced other partnerships and products it planned to manufacture in Mount Pleasant.
Partnerships To Build New Products
In September 2019, Foxconn and start-up company Briggo partnered so Foxconn could manufacture robotic coffee machines. Briggo was acquired by Coca-Cola two months after the announcement and the partnership never moved forward. Foxconn did not respond to questions. A spokesperson at The Coca-Cola Company said the agreement between Briggo and Foxconn Technology Group “was dissolved prior to Briggo being acquired by The Coca-Cola Company.”
In June 2020, Foxconn announced that it partnered with a Minneapolis-based medical technology company Medtronic to manufacture ventilators in Mount Pleasant. The plan was to produce at least 10,000 ventilators in a year to help treat coronavirus patients.
The partnership ended in November.
John Jordan, a spokesman with Medtronic, said Foxconn did a great job preparing their factory, but there wasn’t enough demand to support the program moving forward.
In November, Bloomberg reported Foxconn planned to assemble key components of Google servers in Wisconsin. At the time, a Foxconn representative confirmed the company was developing its data center infrastructure and high-performance computing “capabilities” in Wisconsin, but declined to name any customers.
The current status of this project is unknown, and Foxconn representatives did not return requests for comment. Foxconn announced its partnership with Fisker to make electric vehicles on Feb. 24. But Fisker has struggled in the past. In 2013, the company laid off 75 percent of its workforce and filed for bankruptcy. Hintz said the very idea that an electric car would be made in the United States doesn’t make sense.
“Everything that they have promised so far, none of it has been true, and none of it has played out,” Hintz said. “A lot of the more ridiculous proposals seemed to be before the 2018 election. Some of the more recent proposals seem to be continuing to buy time for a company that is still more interested in maintaining favorable trade status than actually doing something here.”
On October 29, 2020, Racine County Supervisor Jody Spencer joined other elected officials on a tour of Foxconn’s Mount Pleasant facility, including its multi-purpose building. The tour was given by Foxconn representatives who walked them through the building for about 20 minutes. Spencer said something seemed off while she was there.
“It was a massive building with few people working,” Spencer said. “To be honest, I didn’t know what was real and what was framed for the tour.”
When Foxconn arrived in Wisconsin in 2017, Spencer wasn’t an elected official. She was a mail carrier in Racine. And like a lot of other people, she was doubtful the company could live up to its promises. She said she ran for office in 2020 for many reasons, but Foxconn’s lack of transparency was one them.
Like anyone else in the region, she wants to see the economic development that a massive new factory can bring. But she’s become even more skeptical that the company will ever deliver. She said the tour didn’t change her mind.