On September 12th, the village of Mount Pleasant, Wisconsin, where Foxconn is supposed to be building its enormous factory, released plans for a new building: a nine-story glass orb that would serve as Foxconn’s data center.
By that afternoon, the company withdrew the plans, Wisconsin Public Radio reported, to “explore additional design options.”
Instead, Foxconn is moving forward with plans for a more conventional-looking structure: a boxy 260,000-square-foot facility that plans say will house manufacturing and office space.
The quick building swap isn’t the first change of course for Foxconn, which initially promised a 20 million-square-foot Generation 10.5 large-panel LCD manufacturing facility, which President Trump heralded as “the eighth wonder of the world.” After former Gov. Scott Walker signed the deal promising a record-breaking $4.5 billion in subsidies, Foxconn downsized the factory to a far smaller Generation 6 facility. It then appeared to cancel the factory altogether, only to backtrack after a call from Trump.
For a while, Foxconn was promising something it called its AI 8K+5G ecosystem. It’s now building a smaller factory it says will make small LCD screens as well as automotive controls, servers, and various other devices. It’s approximately 1 million square feet, one-twentieth the size of the initial plan. The rest of the land controversially taken from homeowners for the original factory will now be a kind of manufacturing “mall,” according to the company, with Foxconn “providing the anchor tenants and working to bring in other businesses to fill out the rest of the space.”
Foxconn’s new subsidiary, Fii, is not covered under the original deal with Wisconsin
What’s different about the new buildings is that they are under the control of Foxconn Industrial Internet, or Fii, a subsidiary of Foxconn’s parent company that’s not covered in the original contract with Wisconsin.
A spokesperson for the Wisconsin Economic Development Corporation (WEDC) confirmed that Foxconn Industrial Internet is not a party to the contract, which would need to be amended and approved for Fii to qualify for subsidies.
The plans for the Fii building submitted to Mount Pleasant say that it will be used to manufacture components for server racks, though a Fii executive named Richard Vincent recently told the BizTimes that that is just one potential application among many in a “high-mix, low-to-medium volume” manufacturing facility. So far, Fii has announced plans to make automated coffee kiosks for Briggo and smart home security devices for an alarm system company called Qolsys.
Foxconn had already strayed from the original contract when it scaled down the factory it was building. (The contract is explicit about defining the project as a Generation 10.5 facility.) It has also fallen far behind the hiring and investment timelines required for the company to receive subsidies.
Despite not being included in the initial contract, Fii appears to be taking on greater prominence in the project. In September, Louis Woo, the Foxconn executive who had represented the company in Wisconsin, stepped down and was replaced by Jay Lee, a University of Cincinnati professor and vice chairman at Fii.
Since then, Foxconn has been holding a series of “tech talks” around Wisconsin, some of them attended by Lee. The talks represent a move toward greater transparency for the notoriously secretive company (Woo once compared operating under the scrutiny of US media to “living in a glass fishbowl”), but they are still oddly opaque. Attendees report being required to sign nondisclosure agreements, even at an on-campus event at the University of Wisconsin-Madison.
About a year ago, Foxconn pledged $100 million to the University of Wisconsin-Madison for a new engineering building and research. The university has received less than 1 percent of the money so far.
Illinois is a different state than Wisconsin
This week, however, Foxconn signed a partnership with the University of Illinois to build a Center for Networked Intelligent Components and Environments on the Urbana-Champaign campus. Under the agreement, Foxconn will contribute $50 million to the $100 million project, which will develop technology for self-driving vehicles and various other smart devices. Illinois is a different state than Wisconsin.
An attendee who went to a tech talk advertised on Meetup.com at Foxconn’s Milwaukee headquarters says Lee spoke about using AI to improve industrial processes and teased the opening of an “AI institute” to train future workers. “They said we’re going to launch it, but it was unclear whether they wanted people to talk about it because we had to sign this super vague NDA,” says the attendee. “It said don’t distribute confidential materials, and don’t take any pictures or videos. I’ve never been to a meetup that didn’t want you to talk about the meetup.”
“I’ve never been to a meetup that didn’t want you to talk about the meetup.”
But because all this is happening under Fii, it’s clear the contract with Wisconsin has to be revised. Indeed, before he left, Woo met with Gov. Tony Evers and expressed interest in altering the contract to include new Foxconn subsidiaries, among other changes, according to documents obtained through a records request.
The state also has reason to revise the contract. According to a study requested by the Evers administration earlier this year, if the current subsidy levels are kept, Wisconsin taxpayers would end up paying about $290,000 per job Foxconn creates.
It’s unclear where any contract revision stands. Neither the Evers administration nor WEDC responded to questions about the status of any contract negotiations.
The company has repeatedly reiterated its commitment to employ 13,000 people in the state and invest $10 billion. Though the factory will bring Foxconn nowhere near that goal, the company has said it is only the first step. It has never clarified what the subsequent steps might be.
Foxconn did not respond to questions about the contract or about Fii’s role in the Wisconsin project.