Last week, the Wisconsin Economic Development Corporation (WEDC) rejected electronics maker Foxconn’s tax subsidy application for failing to not only hire the number of employees it promised, but to build a Gen 10.5 LCD factory. The company had instead built a Gen 6 facility to manufacture phone screens instead of a larger factory for TV displays, and hired only 550 out of the 13,000 employees it was supposed to, 281 of whom did not qualify under the terms of the contract. But now, a report from The Verge has confirmed the Gen 6 facility is not being used to manufacture anything at all.
In an interview with The Verge, Wisconsin Secretary of the Department of Administration Joel Brennan said it’s clear “the Gen 6 that’s been discussed and built in Mount Pleasant is not similar to other Gen 6 fabs around the world.”
Basically, it’s a fake factory. The building is there, but nothing is being made.
According to a report from Wisconsin’s Division of Executive Budget and Finance, not only has Foxconn not purchased any of the necessary manufacturing equipment to make LCDs, but it’s currently using the facility as storage. If manufacturing were to happen in the building, it would only be able to accommodate the final assembly of components—LCDs and other phone parts would be shipped to the facility and then assembled there.
In an interview with The Verge, Wisconsin Secretary of the Department of Administration Joel Brennan said that this industry was new to Wisconsin, and there was “justified criticism of the [former Governor Scott] Walker administration for entering into this contract.” No outside experts were consulted, and it appears there wasn’t any thorough discussion around how a contract like this would affect the community, nor if it was particularly viable considering LCD manufacturing wasn’t something that hadn’t really been explored in Wisconsin before.
The fake factory would definitely not result in the 13,000 jobs Foxconn needed to get its subsidies. It could also explain why the company has hired such a small number of people to date. If final assembly is the only thing taking place in the facility, that wouldn’t require anywhere close to the same amount of employees as a full-fledged factory would.
To make matters worse, Foxconn allegedly hired local college students and recent graduates on visas in a futile attempt to bolster its employment numbers, according to an investigation by The Verge. Foxconn wasn’t able to hire enough people to get its subsidies, so many of those new hires were laid off once the deadline had passed. Many of them were also hired with no work to do.
It’s somewhat of an unsurprising end to a deal that never should have happened in the first place. In 2019, Foxconn had decided to not build a factory in Milwaukee, Wis., even after purchasing a 500-person office building. The company told Gizmodo at the time that factors within the global market changed its plans. But 24 hours later, after a phone call with President Trump, Foxconn execs did an about-face and decided to follow through with constructing the factory. It probably should have just walked away, considering how much of an unnecessary headache this entire saga has turned into.