Last week, Foxconn made headlines when it announced it was building a new factory in Wisconsin. This factory would employee at least 3,000 workers and represents a $10 billion investment for Foxconn. In theory, this would be great for Wisconsin workers seeking jobs in technology manufacturing. The plant would produce flat-panel displays for TVs and other consumer products. So far, so good.
“TV was invented in America,” Mr. Gou, chairman of Foxconn, said at the White House, before noting that products like LCDs and similar technology were no longer made here. “We are going to change that. It starts today in Wisconsin.”
But, as TechCrunch points out, Foxconn has a long history of making grandiose promises and then failing to follow through. In 2013, Foxconn promised to build a plant in Pennsylvania. It never happened.
The company has previously signed letters guaranteeing it would bring factories to Vietnam, Indonesia, and Brazil. The result? Nothing happened.
President Trump announced last week that Apple would move manufacturing back to the US, with absolutely no comment or response from Apple, which had previously said it would be extremely challenging to do so. Attempts to build native US manufacturing plants the way Microsoft did (and have now shuttered) underscores the difficulty of going this route.
A Foxconn factory in Shenzen.
Foxconn is a Chinese company. Its entire supply chain and design are directed towards fulfilling the promises it has made to its customers. Its business model includes housing some 200,000 employees on-site in China — an approach that simply won’t work in Wisconsin, even if it aids people in getting jobs more quickly.
In short, don’t hold your breath for Foxconn to actually deliver on these promises in any particular way. Its track record is poor and its business practices not much better. Automation and increased employee productivity — laudable goals in and of themselves — have led to the decline of US manufacturing jobs. As a result, manufacturing’s share of the US economy has fallen from roughly 25 percent in the 1960s to just a little over 8 percent today. If President Trump was serious about improving the lives and existence of American workers, a visit to Walmart or Amazon might be in order, as opposed to Carrier or Foxconn.
The GOP may have dropped its interest in the BAT (Border Adjustment Tax), which would’ve required Foxconn to pay a 20 percent import tax on any goods it brought to America. But the math behind moving an entire supply chain to the US from China don’t make much sense. It would take years, in any case, to bring the fab online and fix these issues. I hope Foxconn follows through, builds the plant, and helps Midwesterners get a chance to grab some high-profile tech jobs. Given the company’s history of promising, then ignoring, plans to expand its factories, though, I’m not holding my breath.