Foxconn Focuses on R&D, Backtracks on LCD Manufacturing in WI

President Donald Trump joins Gov. Scott Walker and Speaker Paul Ryan at Foxconn groundbreaking in Mt. Pleasant, Wis. (Wikimedia Commons)

Author: Will Kenneally

Foxconn is backtracking on plans to produce LCD screens in southeastern Wisconsin, and to instead focus on research and development in the state.

A Foxconn representative tells Reuters that the high costs of production and labor in the United States are causing the company to reconsider its plans for Wisconsin.

“The global market environment that existed when the project was first announced has changed,” the company released in a statement. “As our plans are driven by those of our customers, this has necessitated the adjustment of plans for all projects, including Wisconsin.”

The news puts into question whether Foxconn will deliver on the 13,000 jobs that were promised when the company announced its move to Wisconsin in 2017. Foxconn says it remains committed to employing 13,000 people in Wisconsin but has had slow initial progress. The Milwaukee Journal Sentinel reported Foxconn missed its first jobs target needed to receive state tax credits.

The makeup of the company’s workforce in the state will also look different than the manufacturing jobs the company initially touted. The company says it is exploring ways to integrate Wisconsin’s “knowledge workers” into an evolving plan for the state.

“We are also examining ways for Wisconsin’s knowledge workers to promote research and development in advanced industrial internet technologies and produce high-tech applications and solutions for industries such as education, medical and healthcare, entertainment and sports, security, and smart cities,” the company release in their statement.

Foxconn Chairman Terry Gou and UW-Madison Chancellor Rebecca Blank announce research partnership (Will Kenneally/WSUM)

Foxconn’s research into applications for their display technology may bolster existing relationships between the company and the university. Last year, Foxconn Chairman Terry Gou joined UW-Madison Chancellor Rebecca Blank in announcing a research partnership establishing a Foxconn presence at UW-Madison. Foxconn may also explore medical applications for their technology through partnerships with the UW Hospital.

Political reactions:

The tax incentives that were promised to Foxconn to invest money and create jobs in the state served as a flashpoint for Democrats and Republicans throughout the 2018 elections.

Wisconsin Republicans continued today to tout the economic promise of the Foxconn investment in the state in the wake of the day’s news.

“In a short time, Foxconn has made a positive impact across Wisconsin with more than 1,000 new jobs, an investment of $200 million, three innovation centers and one of the largest gifts ever of $100 million to the UW-Madison,” Republican legislative leaders said in a joint statement. “It’s also not surprising Foxconn would rethink building a manufacturing plant in Wisconsin under the Evers Administration.”

Senate Democratic leader Jennifer Shilling, D-La Crosse, criticized Republicans’ commitment of tax incentives to the company.

“Their negligence has put home-grown businesses at a competitive disadvantage while committing taxpayers to decades of economic costs and liabilities for a project that continues to shrink in size and scope,” Shilling wrote in a statement.

The Evers administration said it will continue to discuss the progress of the project with Foxconn leadership.

“Our team has been in contact with Foxconn since learning this news,” said Department of Administration Secretary-designee Joel Brennan, “and will continue to monitor the project to ensure the company delivers on its promises to the people of Wisconsin.”