Everything you need to know about Foxconn in Wisconsin

It has never been clear what Foxconn is attempting to do in Wisconsin, and every time the company or one of its executives tries to explain it, things have just gotten weirder. For example, the company has said for years that its empty warehouse in southeastern Wisconsin is the centerpiece of an “AI 8K+5G” strategy, without ever explaining what that means. (Nothing. It means nothing.)

Anyway, throw that mystery out of your brain because AI 8K+5G has been completely scrubbed from Foxconn’s Wisconsin website. Instead, get ready for “3+3=∞,” which is Foxconn’s new strategy, or Foxconn 3.0, which the company claims follows the famous and beloved Foxconn 1.0 and Foxconn 2.0 strategies that totally made sense and revolutionized the industrial economy of southeastern Wisconsin.

Alan Yeung is a professor of entrepreneurship at the University of Wisconsin-Madison and the former head of the Foxconn project in Wisconsin.

If you don’t quite remember, the Foxconn project in Wisconsin was announced in 2017 as a massive deal to build the first “Generation 10.5” LCD factory in North America. It was also one of the first big moments in the Trump presidency, complete with President Trump holding a golden shovel at a lavish groundbreaking ceremony where he said the factory would be “the eighth wonder of the world.”

iPhone builder Foxconn is dangling a massive electric vehicle project in front of Wisconsin after burning the state with promises of a multibillion-dollar LCD factory that never happened. The Taiwanese conglomerate has also already fallen behind its own arbitrary deadline for choosing where it will build the EV factory.

The Taiwanese conglomerate said Friday that it has started talks to the Wisconsin Economic Development Corporation (WEDC) about making EVs with California startup Fisker Inc. at the mostly empty site it owns in the state. This is despite chairman Young Liu saying in March that he would decide between building EVs in Mexico or Wisconsin by July 1st, and Foxconn and the WEDC agreeing to a far smaller tax subsidy package in April that reflected the failure of the LCD project.

After more than three years of grandiose promises and missed deadlines, Foxconn and Wisconsin have agreed to amend their contract to reflect the reality of a much-diminished project. Under the amendment, which was approved by the Wisconsin Economic Development Corporation (WEDC) today, the company will receive vastly smaller tax subsidies in exchange for greater flexibility about what business it ultimately pursues in the state. 

Foxconn had originally promised to build an enormous LCD factory employing 13,000 workers and costing $10 billion. With the amendment, it now says it will employ a total of 1,454 people and invest $672 million. In return, the tax subsidies the company is eligible for have been slashed, from $2.85 billion to $80 million. 

The chairman of Taiwanese manufacturer Foxconn says the electronics giant is considering making electric vehicles at its mostly empty worksite in Wisconsin, where the company originally planned to make LCD panels. Either that, or Foxconn may make EVs in Mexico. The decision will be made by July 1st, chairman Young Liu said at a press conference Tuesday.

Best known for manufacturing iPhones, Foxconn has recently shifted some of its attention to the booming electric vehicle space as a way to diversify its revenue. Late last year, the conglomerate announced an EV platform on which other companies could build. This year, Foxconn announced tie-ups with China’s largest private automaker, Geely, and with a number of EV startups. It has agreed to build an electric vehicle with Fisker Inc., struggling startup Byton, and may even build one with Faraday Future (as part of the deal with Geely), which is now flush with cash after years on the brink.

In October, Wisconsin denied Foxconn subsidies because it had failed to build the LCD factory specified in its contract with the state. As The Verge reported, it had created a building one-twentieth the size of the promised factory, taken out a permit to use it for storage, and failed to employ anywhere near the number of employees the contract called for. Nevertheless, Foxconn publicly objected “on numerous grounds” to Wisconsin’s denial of subsidies. 

Documents obtained through a records request show Foxconn’s rationale: it doesn’t think it was specifically promising to build an LCD factory at all. According to a November 23rd letter to the Wisconsin Economic Development Corporation (WEDC), Foxconn does not think the factory specified in the contract, an enormous Generation 10.5 LCD fabrication facility, was actually a “material” part of the contract. (“Material” is a legal term that means relevant or significant.)

A state report on Foxconn’s Wisconsin factory depicts a project gone far off course. The report, issued this month by Wisconsin’s Division of Executive Budget and Finance and obtained through a records request, confirms that the company has not built the enormous Gen 10.5 LCD factory specified in its contract. It also says that the building the company claims is a smaller Gen 6 LCD factory shows no signs of manufacturing LCDs in the foreseeable future and “may be better suited for demonstration purposes.”

The report notes that Foxconn received a permit to use its so-called “Fab” for storage, which The Verge first reported this week. Furthermore, according to an industry expert consulted by the state, Foxconn has not ordered the equipment that would be needed to make LCDs. If the building were to be used as an LCD manufacturing facility, the expert notes it would be the smallest Gen 6 in the world and “would appear to be more of a showcase than a business viable for the long term.” 

Through the many twists and turns of Foxconn’s troubled Wisconsin project, one thing has long been clear: the company is not building the promised 20 million-square-foot Gen 10.5 LCD factory specified in its contract with the state. Even before President Trump broke ground on the supposed factory in June 2018, Foxconn said it would instead build a far smaller factory than it had proposed.

The discrepancy between what Foxconn is doing and what it said it would do in its contract has only grown since then, and it has brought Wisconsin and the company to an impasse. Documents obtained by The Verge show that attempts to renegotiate that contract have so far failed, and today, the Wisconsin Economic Development Corporation (WEDC), which oversees the deal, rejected Foxconn’s application for tax subsidies on the grounds that Foxconn had not carried out the Gen 10.5 LCD factory project described in its original contract.

Last April, The Verge reported that the Foxconn “innovation centers” scattered around Wisconsin were largely empty and that renovations were stalled. Several days after that article published, Foxconn held a press conference to announce that it had bought yet another building and told reporters that The Verge’s reporting was incorrect.

Specifically, Foxconn’s Alan Yeung said The Verge’s story had “a lot of inaccuracies, and we will actually make a correction, and we will make a statement about that.”

Foxconn’s Wisconsin plant, the controversial recipient of billions of dollars in tax subsidies and the focus of multiple Verge investigations, will produce ventilators with medical device firm Medtronic. The partnership was announced by Medtronic CEO Omar Ishrak in an interview with CNBC, who said that Foxconn will be manufacturing ventilators based on its PB-560 design in the next four to six weeks. 

Foxconn’s Wisconsin plant was first announced way back in 2017 as a $10 billion LCD factory. It was labeled the “eighth wonder of the world” by President Trump, but Foxconn’s plans for the site appear to have changed repeatedly over the years. At various points, Foxconn has said that it would build a smaller LCD factory, no factory at all, or that it would produce other items like a robot coffee kiosk. Now, it appears the factory will, in part at least, produce ventilators, after its planned opening next month.

Whatever Foxconn is building in Wisconsin, it’s not the $10 billion, 22 million-square-foot Generation 10.5 LCD factory that President Trump once promised would be the “eighth wonder of the world.” At various points over the last two years, the Taiwanese tech manufacturer has said it would build a smaller LCD factory; that it wouldn’t build a factory at all; that it would build an LCD factory; that the company could make any number of things, from screens for cars to server racks to robot coffee kiosks; and so on. 

Throughout these changes, one question has loomed: given that Foxconn is building something completely different than that Gen 10.5 LCD facility specified in its original contract with Wisconsin, is it still going to get the record-breaking $4.5 billion in taxpayer subsidies?

Electronics manufacturer Foxconn’s promised Wisconsin “innovation centers,” which are to employ hundreds of people in the state if they ever get built, are officially on hold after spending months empty and unused, as the company focuses on meeting revised deadlines on the LCD factory it promised would now open by next year. The news, reported earlier today by Wisconsin Public Radio, is another inexplicable twist in the nearly two-year train wreck that is Foxconn’s US manufacturing plans.

The company originally promised five so-called innovation centers throughout the state would that employ as many as 100 to 200 people each in high-skilled jobs, with the Milwaukee center promising as many as 500. Those jobs were to complement the more than 13,000 jobs Foxconn said its initial Wisconsin electronics manufacturing factory would bring to the US, in exchange for billions in tax breaks and incentives that Governor Scott Walker granted the company back in 2017.

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.”

Taiwanese manufacturing giant Foxconn is expanding its controversial Wisconsin presence with automated coffee robots. The manufacturer, known best for helping create the world’s most popular electronics devices predominantly in its Chinese factories, today announced a partnership with a Texas-based company called Briggo, which makes automated coffee dispensers the size of modest mall kiosks mostly for airports and corporate offices. The news was reported by the Milwaukee Business Times.

Foxconn will help the company manufacture its units in its Wisconsin LCD factory, which doesn’t exist yet — and thus produces no LCDs, or any other product for that matter — and which Foxconn has previously claimed it plans to use for a variety of manufacturing purposes.

In 2017, Wisconsin offered Foxconn a record-breaking subsidy to build an LCD factory in the state, only to see the promised factory fall behind schedule and grow progressively smaller. Now, the Wisconsin Department of Administration has requested a reassessment of the costs and benefits to the state regarding the far-tinier facility.

The report, which was conducted by Tim Bartik of the Upjohn Institute for Employment Research, finds that the smaller facility raises the already unusually high cost per job even further. If the subsidy levels in the current contract are kept, each Foxconn job would cost taxpayers about $290,000, Bartik found, compared to $172,000 if Foxconn built the original $10 billion, 13,000-job facility. For comparison, Bartik estimated the subsidies Virginia offered Amazon for its second headquarters amounted to between $10,000 and $13,000 per job.

The Foxconn factory in Wisconsin will only create 1,500 jobs when it starts production next May, Gov. Tony Evers told CNBC yesterday. That’s the same number Foxconn has been saying since it shifted plans for the factory a few months ago, and far short of the 13,000 jobs that were promised when President Trump broke ground a year ago. Evers has been negotiating with Foxconn since he replaced former Wisconsin governor Scott Walker, and he says he now has “clarity” on Foxconn’s plans.

1,500 jobs is short of the 1,800 jobs required for Foxconn to get the next set of tax credits under its $4 billion deal with the state. Foxconn already missed its first jobs target under that contract, hiring only 156 employees instead of the required 260 last year. Instead, Foxconn has bought a series of empty buildings for “innovation centers” around the state as part of a promised “AI 8K+5G ecosystem” (although it’s never specified what that ecosystem actually is). While Foxconn initially disputed The Verge’s reports of the buildings being empty, it has now been 89 days since the company promised a statement or correction regarding the plans for the innovation centers.

Foxconn’s plan to build an LCD factory in Wisconsin — subsidized by up to $4 billion in tax credits, infrastructure investment, and direct cash payments from the state — isn’t going so well. Over the past year, the company has tried to cancel the plan, restarted it at behest of President Trump, and then scaled it down and pushed it back repeatedly, all while buying empty buildings across the state.

All of that is certainly a problem for the Wisconsin taxpayers footing the bill, the homeowners who were moved off their land under eminent domain, and the people dying because the expansion of I-94 to support the project has created a construction “death trap.” But now Foxconn itself would like some sympathy, because it’s not used to anyone paying attention to its plans.

It’s been exactly one year since President Trump pushed a golden shovel into a field in Mount Pleasant, Wisconsin, breaking ground on a planned Foxconn factory he called “the eighth wonder of the world.” 

“This is one of the great deals, ever,” he said at the ceremony. The proposed facility would employ more than 13,000 Wisconsin workers and manufacture high-resolution LCD screens. And it would be huge, he said. “Think of it: more than 20 million feet, and that’s probably going to be a minimal number,” he claimed. The factory, Trump said, was evidence he was bringing manufacturing back to the United States, “restoring America’s industrial might.”

During the 2018 campaign, Wisconsin’s governor Tony Evers criticized the Foxconn project as a bad deal, but a done deal: the bill offering the Taiwanese tech giant up to $4.5 billion in subsidies had been passed into law, and the state and local governments had already acquired land and started building infrastructure for what was supposed to be an enormous manufacturing facility. For good measure, outgoing governor Scott Walker, who aggressively wooed Foxconn and repeatedly touted the project in his failed reelection bid, signed lame duck legislation limiting his successor’s ability to oversee it. With so much already in motion, Evers said it was too late to change the project and instead promised to make the Foxconn deal work as best he could for Wisconsin taxpayers.

But six months into the Evers administration, Foxconn has fallen so far behind schedule and changed its plans so drastically that it may have opened the door to revise the contract. In fact, it could now be in the company’s interest to make those revisions.

Last summer, Foxconn announced that it would buy buildings across Wisconsin and turn them into “innovation centers” as part of its record-breaking $4.5 billion tax subsidy agreement with the state. The initial agreement with Wisconsin had been for a large-screen LCD manufacturing facility, but by 2018, the company had downsized the factory to a far smaller type. That factory would employ only a tiny fraction of the 13,000 people Foxconn had promised to hire, and the company’s plan to make up the shortfall was to hire people to develop an as-yet undefined “AI 8K+5G ecosystem.” These employees would work on Foxconn’s main campus in Mount Pleasant as well as in the innovation centers scattered across the state, which were supposed to open early this year.

In March, The Verge visited Foxconn’s innovation centers across Wisconsin and found them mostly empty. Several dozen employees worked in its Milwaukee headquarters, but only minor renovations had been done to the building, half of which was rented out to a financial services firm. The owner of a building Foxconn had promised to buy in Eau Claire had canceled the contract after the deal stalled and Foxconn tried to renegotiate. The other Eau Claire innovation center also appeared to be stalled, and no one involved with remodeling it had received a contract or been paid. In Green Bay, the parts of the building Foxconn bought that weren’t vacant were rented out to unrelated businesses. The same went for the buildings Foxconn had bought in Racine.

Foxconn’s founder and chairman Terry Gou went on a quick US tour this week, first stopping at the White House on Wednesday to meet with President Trump, and then dropping by the Milwaukee airport on Thursday to meet with Wisconsin Governor Tony Evers.

The purpose of the visit appears to be reassuring everyone that the company’s Wisconsin project is moving forward — that despite the company’s changing plans and lack of progress, it will eventually hire the thousands of people and build the manufacturing hub it promised in 2017 when Wisconsin offered it $4.5 billion in subsidies.

Earlier this month, The Verge published an investigation checking in on the many “innovation centers” Foxconn had announced it would open in Wisconsin. Foxconn had promoted the buildings as part of its effort to turn the state into a technology hub employing 13,000 people, with the centerpiece being a heavily subsidized LCD factory on Lake Michigan. But as of early April, the buildings stood empty. Some hadn’t even been bought, and no one in Wisconsin seemed to know what was going on with them.

Just two days after The Verge’s report, Foxconn announced it was buying yet another building. Alan Yeung, Foxconn’s director of US strategic initiatives, said the story contained “a lot of inaccuracies,” and that the buildings are not empty but, people also shouldn’t be “climbing trees” to check, and that the company would issue a correction soon.

Even as Foxconn continues to promise Wisconsin that it will, in fact, bring jobs and an LCD plant to the state in exchange for an unprecedented $4 billion in tax breaks, it may be quietly attempting to renegotiate the deal.

According to a letter from Wisconsin Governor Tony Evers (via Wisconsin Public Radio and also confirmed by The Verge), Foxconn was actually the one to first propose changing the deal back in March, and the company is apparently planning to submit “the necessary documentation” to start that process in a mere matter of weeks.