Is It Time to Label the Foxconn Project in Wisconsin a Boondoggle?

Tags Jobs
President Trump, Vice President Mike Pence, and Wisconsin leaders like then-Gov. Scott Walker and then-Speaker Paul Ryan (R) welcomed Foxconn Chairman Terry Gou to the White House in July 2017 to announce that the company would build a factory in the Badger State to make LCD panel products. Progress on the facility has since stalled, and many — including the state’s new governor — are doubtful about the plant’s potential. | Photo by White House

Spoiler: Things aren’t going so well.

President Trump went to Wisconsin on Saturday night for his annual not-going-to-the-White-House-Correspondents-Dinner rally, where he spent an hour and a half on stage talking about everything from the economy to immigration to abortion to the Mueller report to the 2020 Democratic presidential field.

One thing he didn’t mention? Foxconn.

It’s been awhile since we last checked in on what was happening with the Badger State’s planned Foxconn factory, and boy has a lot happened (or not happened, depending on how you look at it). For one, Wisconsin has a new Democratic governor — and he’s working to redo the deal that former Republican Gov. Scott Walker put together.

Meanwhile, the Wall Street Journal reported on Monday that residents of the small Wisconsin town of Mount Pleasant are dealing with the real-world consequences of the deal. Foxconn razed 75 homes and cleared hundreds of farmland acres in Mount Pleasant to build the new factory, but progress has largely stopped, leaving residents to pick up the pieces.

In case you aren't familar with the Foxconn saga, here's a recap: Foxconn announced in 2017 that it would build a massive factory to build flat-panel display screens for various consumer electronics products, creating up to 13,000 jobs and pumping billions of dollars into the state. The state agreed to give Foxconn around $4 billion in public subsidies if it upheld its end of the deal.

Now, Trump loved this deal. He made sure to announce it at the White House, and he even traveled to Wisconsin for the groundbreaking ceremony in 2018.

But there was skepticism from the start. Some thought the state had given too much away, while others — including AAM President Scott Paul — noted that Foxconn has a history of not following through on its job creation promises.

There also were big environmental concerns, since the deal exempted Foxconn from the state’s environmental rules (despite the fact that the production expected to take place at the factory involves plenty of chemicals that need to be properly disposed of).

And the cracks in the deal soon began to emerge, as Foxconn almost immediately began changing what it planned to do at its Wisconsin facility. Instead of building a Generation 10.5 plant as promised, the company announced it will instead build a Gen 6 plant, a much smaller facility that is mostly run with robots. 

The turmoil has continued. Just a few weeks ago, The Verge published a big investigation showing that many of the “innovation centers” that Foxconn said it would open in Wisconsin to support the factory stood empty. Foxconn said that investigation contained “a lot of inaccuracies,” but as of last week had yet to clarify to The Verge what those inaccuracies were.

Now it looks like expectations for the factory are officially shifting. New Wisconsin Gov. Tony Evers said on April 17 that he doesn’t expect Foxconn to create the 13,000 promised jobs, and now hopes to renegotiate the state’s massive deal with the company:

“Clearly, the deal that was struck is no longer in play… The present contract deals with a situation that no longer exists, so it’s our goal to make sure the taxpayers are protected and environmental standards are protected.”

Foxconn is apparently game; the governor said the company even approached him about making changes to its contract with the state.

What that will eventually look like is anybody’s guess, although the Associated Press reported that it is likely Foxconn will want to officially lower jobs expectations and the state will want to make "the benefits less generous." One thing is clear — it doesn’t look like Foxconn is going to be the big manufacturing game changer that Trump, Walker and others touted it as back in 2017.

How is Trump taking all this? Well, a campaign spokesperson told the Milwaukee Journal Sentinel that Evers should be “optimistic and hopeful that 13,000 jobs would come to the state of Wisconsin” and encouraged the governor to work to make the deal happen.

But Trump’s decision not to bring up Foxconn in his big speech on Saturday — despite the fact that he talked about like, everything else, including factory jobs! — may be a more accurate sign of where his head is at.