Foxconn Tore Up a Small Town to Build a Big Factory—Then Retreated

The iPhone maker got fat incentives to build a $10 billion LCD plant that largely hasn’t materialized on land where Mount Pleasant, Wis., razed homes and crops

MOUNT PLEASANT, Wis.—Six miles west of Lake Michigan lies a cleared building site half again as big as Central Park, ready for Foxconn Technology Group’s $10 billion liquid-crystal-display factory.

Contractors have bulldozed about 75 homes in Mount Pleasant and cleared hundreds of farmland acres. Crews are widening Interstate 94 from Milwaukee to the Illinois state line to accommodate driverless trucks and thousands of employees. Village and county taxpayers have borrowed around $350 million so far to buy land and make infrastructure improvements, from burying sewer pipes to laying storm drains.

One thing largely missing: Foxconn.

President Trump and Foxconn Chairman Terry Gou hatched the factory plan in 2017, and both attended last summer’s gold-shovel groundbreaking in Mount Pleasant, 20 miles south of Milwaukee.

As of Dec. 31, the Taiwanese manufacturing giant, famous as an AppleInc. supplier, had spent only $99 million, 1% of its pledged investment, according to its latest state filings. The company projected as many as 2,080 in-state employees by the end of 2019 but had fewer than 200 at last year’s end, state filings show. The village is still awaiting factory building plans for review. Locals said Foxconn contractors have recently been scarce on the site.

The impact on Mount Pleasant, by contrast, is palpable. Its debt rating has slipped. Local politics has become fraught. Neighbors have fallen out over land seizures.

“At some point we’re talking about things that are just imaginary,” said Nick Demske, a commissioner in Racine County, where the plant is. “We’re pretending.”

.. The Foxconn project is among the biggest U.S. public-incentive deals ever offered to a foreign company, a more than $4 billion package of state and local tax breaks and investments. A Foxconn video last year showed renderings of a futuristic campus resembling Apple’s spaceshiplike Silicon Valley headquarters, with light rail shuttling workers. Foxconn said the video was for illustration purposes.

.. Foxconn, known formally as Hon Hai Precision Industry Co., is the main assembler of Apple’s iPhone and a major employer in China. It reported annual revenue of $5.29 trillion New Taiwan dollars (US$171 billion today) in 2018 and said profits have been under pressure from lower iPhone sales in China.

Foxconn had planned to make large state-of-the-art screens in Mount Pleasant but said last summer it would make small screens of an older technology instead, citing the distance from the Asia supply chain after Corning Inc. said it wouldn’t build a glass facility next door.

In January, Foxconn said it was backing out of the plan to build an LCD factory in the village, citing high U.S. labor and material costs. Days later, after a phone call between Mr. Trump and Mr. Gou, Foxconn reversed course and said it would go ahead with the facility making small screens, adding some other functions.

Why our generals were more successful in World War II than in Korea, Vietnam or Iraq/Afghanistan

The Fleet Admiral Chester W. Nimitz Memorial Lecture
Thomas E. Ricks is a Senior Fellow at the Center for a New American Security (CNAS). Concurrently with his duties at CNAS, Ricks writes an online blog for ForeignPolicy.com called, “The Best Defense,” serves as contributing editor for Foreign Policy. http://nimitz.berkeley.edu/
..It’s worth mentioning that General Shinkseki was fired for being a pessimist. But it turned out his pessimism was deeply warranted. Perhaps Marshal was mistaken when he imagined us as being forever unprepared for the next war in the sense that we’re more than prepared for any conventional war, but that we no longer fight conventional wars. During the conventional Gulf War we suffered no defeats and hardly any losses. Perhaps in a situation like Iraq or Vietnam, the pessimists should be given a chance to challenge the holders of orthodox views.
Show less