Foxconn, A Taiwanese technology giant who was lured by President Donald Trump to invest $10 billion in Wisconsin to manufacture advanced liquid panel displays is considering to scale back on the plans to hire blue collar workers at the new base. The decision will blow a huge setback to Trump Administration as it offered a $4.8 billion state subsidy to the giant for creating jobs in Wisconsin.
The White House ceremony in 2017 where the project was announced received huge media attention. The event was attended by Wisconsin Congressman and then House speaker Paul Ryan, Wisconsin Governor Scott Walker, President Donald Trump and Foxconn CEO Terry Gou. President Trump praised the project as being the testimony to his ability to create thousands of jobs and revive manufacturing in the USA.
In an interview with the Reuter’s, special assistant to Foxconn CEO, Louis Woo said that although Foxconn initially planned to manufacture large LCD panels at the Wisconsin site, it is planning to scale back on manufacturing jobs and instead convert the facility to a technology hub where research, assembly and packaging operations will be undertaken. This will be a reversal from 2017 promises of the company to bring up to 13,000 jobs to Wisconsin.
Mr. Woo Said that the company is evaluating options as there is a steep cost attached to manufacturing advanced LCD screens in US owing to the higher labor cost. It would be more profitable to manufacture the screens in China, assemble them in Mexico and import them to United States for sale, he added. The Wisconsin site of the company which is under construction covers an area of 22 million sq. ft may become only a research facility as a result of the new decision.
The decision will bring new wave of controversy as the deal was equally criticized at the time of announcement of the project in 2017 owing to the massive tax subsidies of $4.8 billion offered by the state of Wisconsin. The project promised job creation ranging from 3000 to 13,000; however the critics said that even if 13,000 jobs materialized the state and consequently taxpayers would pay $346,153 per job at a $4.5 billion subsidy. If 3000 jobs get created, the amount is outrageously high at $1.5 million per job for the taxpayer. The bargain seems far inclined towards the corporate side in the deal, critics added.
The so-called push for job creation may be uncalled for as the current unemployment rate is much lower than the national average at 3%. The facility would have to bring workers from other states including neighbor Illinois in order to meet the labor requirements. The environmental conservationists added further fuel to the fire when they criticized the state for granting access to 7 million gallons of water from Lake Michigan to the project. They called it an unprecedented betrayal of the 2008 agreement to save the Great Lakes ecosystem. Democrats have criticized the project as being just another corporate giveaway by the Trump Administration.
This is not the first time Foxconn has backed away from job promises as earlier instances included projects in Pensylvania and Brazil. Foxconn which supplies its products to Apple, estimated to employ 5200 workers by 2020 but now it may hire only 1000 workers. A former iron worker and labor activist Randy Bryce said that the state should now reconsider the huge tax subsidies it offered to Foxconn in the event of reversal from promises.