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What's going on with Foxconn?

Fully Charged
Bloomberg

Hey y'all, it's Austin. President Trump held a campaign rally earlier this month in the crucial swing state of Wisconsin. In front of a crowd of thousands, he promised to make America a "manufacturing superpower" and said he would draw investment from "very strong companies" who wouldn't work with Democrats—"companies, like, as an example, Foxconn."

Foxconn, the world's largest contract manufacturer of electronics, has a fraught history in Wisconsin. Three years ago, the president helped strike a deal with the company to create a sprawling, $10 billion factory hub that would bring 13,000 new jobs to the state. Trump promised the facility would become "the Eighth Wonder of the World" and restore "America's industrial might" against China. 

Since the project's dramatic announcement, it's been marred with problems, from jarring shortfalls in local hiring and capital expenditures to confusing shifts in the factory's scale and purpose. The question now is what—if anything—Foxconn is going to build in Wisconsin.

In a letter sent this month to Foxconn denying it government subsidies after the company whiffed on its contractual obligations for a second year in a row, the Wisconsin Economic Development Corporation wrote that it could grant subsidies in the future, but only once "Foxconn is able to provide more accurate details of the proposed project, such as its size, scope, anticipated capital investment, and job creation."

From the outset, Foxconn's goals kept changing. The company initially agreed to construct what's called a "Generation 10.5" plant that would manufacture large glass displays. Then it altered course and said it would only build a "Generation 6" factory, a much smaller operation that would make smaller displays.

While I was researching the company for a Bloomberg Businessweek cover story last year, I watched Foxconn's director of U.S. strategic initiatives try to outline what exactly the facility would make. Over the course of his 39-minute presentation in Madison, he said Foxconn could get into 8K video streaming, cloud computing, 3D printing, 5G wireless networks, smart cities, the sharing economy, artificial intelligence, facial recognition, the internet of things, renewable energy, autonomous vehicles and digital microsurgery. In other words, a hodgepodge of every buzzy tech trend.

Since then, Foxconn's Wisconsin project has only grown more amorphous. In September 2019, the company announced it would build robotic coffee kiosks for Texas-based startup Briggo. After the Covid-19 pandemic erupted, Foxconn announced plans to manufacture ventilators. The Verge reported last week the company has also explored eclectic ideas for "Wisconn Valley," as it's known, ranging from exporting dairy products to investments in esports to developing a WeWork competitor called "Blaze."

Last week, Foxconn founder Terry Gou said that "market conditions and the Covid-19 pandemic have altered the timing of our expansion, the specifics of our manufacturing plans, and our product lines have changed." But the company remains committed to the Wisconsin project, he said, "as long as policy makers at the federal, state, and local levels remain committed to Foxconn." The state is now trying to improve the deal and adjust for what the WEDC has called Foxconn's "new and substantially changed vision for the project."

While Foxconn's actual plans for its factory hub in Wisconsin remain a mystery, what's clear is that it won't be adding 13,000 manufacturing jobs there any time soon. Austin Carr

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