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Inside Wisconsin’s Disastrous $4.5 Billion Deal With Foxconn - Bloomberg
A huge tax break was supposed to create a manufacturing paradise, but interviews with 49 people familiar with the project depict a chaotic operation unlikely to ever employ 13,000 workers.
foxconn  wisconsin  government-policy  economic-development-news  Around-the-web  this-week-448  china  business-globalization  taxes-incentives 
8 days ago by areadevelopment
Inside Wisconsin’s disastrous $4.5bn deal with Foxconn • Bloomberg
Austin Carr:
<p>[Foxconn chief Terry] Gou deputized his special assistant, Woo, and another lieutenant, Alan Yeung, Foxconn’s director of US strategic initiatives, to handle the details. They aggressively pursued cash subsidies, calling and texting at all hours. At one point, according to state records released to the public, Woo texted Neitzel at 1:17 a.m., “Give us 200m upfront then it is a done deal.” (Neitzel declined.)

As a bidding war heated up among a handful of states, including Michigan and Ohio, Wisconsin upped its offer. Foxconn demanded subsidies that would make US operations as cheap as in China, and Hogan says Foxconn estimated a 30% cost difference. He acknowledges the subsidy numbers grew “staggering” but says Foxconn won’t get those incentives without delivering the promised numbers of jobs.

Wisconsin’s final bid, written on a single piece of paper, offered as much as $150m in sales tax exemptions and $2.9bn in refundable tax credits on the condition that Foxconn meet certain hiring and capital investment thresholds. Other public costs, including $764m in local incentives from Mount Pleasant and its home county of Racine, made up the other third of the package. When the team slid the paper to Woo in July, Hogan recalls, he folded it up and said, “Terry wants to do business with Governor Walker.”

Even before Foxconn signed the contract in November 2017, Walker’s win began to morph into a political liability. As details of the mostly closed-door negotiations came to light, the narrative soured. At a time when Trump was stoking economic nationalism and ripping on companies that shipped jobs to China, many saw the subsidies as a desperate giveaway to a foreign company with close ties to Beijing…

…“There’s no way this will ever pay itself off,” says Tim Bartik, a senior economist at the W.E. Upjohn Institute for Employment Research. He says Foxconn’s incentives are more than 10 times greater than typical government aid packages of its stripe.</p>
foxconn  technology  wisconsin 
9 days ago by charlesarthur
Foxconn again shifts Wisconsin plan after Trump intervenes • Washington Post
Scott Bauer:
<p>on Friday, in yet another twist, Foxconn said after discussions with the White House and a personal conversation between Trump and Foxconn chairman Terry Gou, it plans to proceed with the smaller manufacturing facility.

“Great news on Foxconn in Wisconsin after my conversation with Terry Gou!” Trump tweeted.

The Foxconn statement did not say whether the commitment to this size factory would affect the type of workers who would be employed in Wisconsin. Foxconn executive Louis Woo told Reuters earlier this week that about three-quarters of workers in Wisconsin would be in research and development-type jobs, not manufacturing. Woo said the Wisconsin project would be more of a research hub, rather than having a manufacturing focus.

A Foxconn spokeswoman had no immediate comment about what its plans to build the “Gen 6” factory would mean for the makeup of the workforce. The difference between a “Gen 10” and “Gen 6” plant rests with the size of the original glass used to make the screens. The larger plant, which had been part of Foxconn’s initial plans, would have used glass more than three-times as large as what the smaller facility will use. The “Gen 6” plant can make screens ranging in size from a smart phone to a 75in television, while the larger plant would have allowed for devices as large as 9½ft by 11ft.

Foxconn, the world’s largest electronics company, said Friday the campus will house both an advanced manufacturing facility and a center of “technology innovation for the region.”</p>

Can they treat whiplash? (It won't matter; Trump will be gone by the time the plant goes live.) Also: are TVs and smartphones the only place where imperial measures still rule?
wisconsin  trump  foxconn 
14 days ago by charlesarthur
(429) https://twitter.com/i/web/status/1090743504672821248
RT : Here's my interview with about . Huge thanks to him and his stellar staff for having me on. And…
Foxconn  from twitter
15 days ago by delong
Foxconn's $20bn projects in US and China hit by growth fears • Nikkei Asian Review
Lauly Li and Cheng Ting-Fang:
<p>Foxconn will postpone most of the production planned in a 61bn yuan ($9bn) display panel project in the southern Chinese city of Guangzhou for at least six months, according to internal documents obtained by the Nikkei Asian Review. In the US, a $10 billion investment in display production in the state of Wisconsin has been suspended and scaled back as a result of negotiations with new Gov. Tony Evers, a Foxconn document obtained by Nikkei shows.

Foxconn's decision to delay work on the two factories throws into doubt the promise of fresh investment and employment at a sensitive time for both economies. China's economic growth has slowed to a 28-year low, while in the US, President Donald Trump continues to seek wins on his vow to bring manufacturing jobs back to America.

"Foxconn decided to slow the investment pace and scale back a bit at the moment because of weakening macroeconomic conditions and the uncertainties brought by the trade war," a person with knowledge of Foxconn's decision told Nikkei.

"If Foxconn expands as planned regardless of the rapidly changing market dynamics, it could eventually hurt the company's business. It's much safer to wait and carefully reconsider the next step," the person added.

Foxconn's moves to hold up planned investments come after the company took cost-cutting steps that included shedding 100,000 workers by the end of 2018.</p>


So not just Wisconsin. (Thanks to <a href="https://twitter.com/petekl/">Pete Kleinschmidt</a> for the pointer.)
foxconn  china  investment 
15 days ago by charlesarthur
Twitter
RT : Q for & watchers: What does today's news about the major down-sizing of the WI facility mean for…
highered  Foxconn  from twitter_favs
16 days ago by kohlmannj
Exclusive: Foxconn reconsidering plans to make LCD panels at Wisconsin plant • Reuters
Jess Macy Yu and Karl Plume:
<p>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.

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.

“In terms of TV, we have no place in the U.S.,” he said in an interview. “We can’t compete.”</p>


Apparently it's not going to be a factory, and rather than having 5,200 people by the end of 2020 that'll probably be more like 1,000. A neat bait-and-switch for the $4bn in tax breaks it got. Wisconsin narrowly voted for Trump. By the time the next election comes around, will voters feel the same?
foxconn  wisconsin 
16 days ago by charlesarthur
Foxconn May Scale Back $10 Billion U.S. Plant, Reuters Says - Bloomberg
Foxconn Technology Group is considering scaling back or even abandoning plans to make cutting-edge displays from a $10 billion plant it’s building in the U.S., Reuters reported.
this-week-448  Around-the-web  Matt  site-selection  economic-development  taxes-incentives  wisconsin  midwest  workforce  foxconn  electronics-industry  FDI  location-USA 
16 days ago by areadevelopment
Foxconn looks beyond China to India for iPhone assembly • WSJ
Yang Jie, Yoko Kubota, Newley Purnell and Rajesh Roy:
<p>Apple's largest iPhone assembler, Foxconn Technology Group, is considering producing the devices in India, people familiar with the matter said, a move that could reduce Apple’s dependence on China for manufacturing and potentially for sales.

Executives at Foxconn, a contract manufacturer that assembles a large portion of the world’s iPhones in China, are studying whether to include an India project in budget plans, one of the people said. Senior executives, possibly including Chairman Terry Gou, plan to visit India after next month’s Lunar New Year to discuss plans, the people familiar said.

Foxconn’s look at India comes as sustained friction between Washington and Beijing over trade and technology is pushing many companies to consider diversifying their supply chains away from China, a global center of assembly for smartphones, computers and other electronics.</p>

OK, but this isn't going to be sorted out by Christmas. For Foxconn to build a plant able to assemble iPhones in any volume is a 10-year project at least: find land, build plant, calibrate, test, full production. As a long-term shift, this is something Apple may be thankful for in the future, but it's not going to sort out its position between the rock and hard place of the US-China trade wars in a hurry.
Foxconn  iphone  apple  china  india 
24 days ago by charlesarthur
Foxconn to begin assembling top-end Apple iPhones in India in 2019 - Reuters
Apple Inc will begin assembling its top-end iPhones in India through the local unit of Foxconn as early as 2019, the first time the Taiwanese contract manufacturer will have made the product in the country, according to a source familiar with the matter.
Around-the-web  Matt  electronics-industry  manufacturing  india  made-in-america  location-USA  foxconn 
6 weeks ago by areadevelopment
Wisconsin’s $4.1 billion Foxconn factory boondoggle - The Verge
The details of the deal were famously written on the back of a napkin when Gou and the Republican governor first met: a $3 billion state subsidy in return for Foxconn’s $10 billion investment in a Generation 10.5 LCD manufacturing plant that would create 13,000 jobs.

KEY POINTS
Wisconsin Gov. Scott Walker wooed Foxconn with a huge subsidy plan, which was first drawn up on the back of a napkin
It now totals $4.1 billion, much of it in cash, and many doubt taxpayers will ever be repaid
Now, Foxconn no longer plans to build a Generation 10.5 factory manufacturing panels for 75-inch TVs
Instead, it plans to build a smaller factory manufacturing smaller panels and requiring far less investment
Foxconn maintains it will still create 13,000 jobs, but they will mostly be for knowledge workers developing an ecosystem it calls “AI 8K+5G”
Foxconn was given large exemptions from environmental regulations, raising concerns about pollution 
The Walker administration refused to talk to The Verge for this story
The size of the subsidy was stunning. It was far and away the largest in Wisconsin history and the largest government handout to a foreign company ever given in America. Like most states, Wisconsin had given subsidies to companies in the past, but never higher than $35,000 per job. Foxconn’s subsidy was $230,000 per job.
politics  Foxconn  walker  Wisconsin  WI 
8 weeks ago by ntschutta

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