Foxconn’s Profits Plunge By 90%
Factories in China shut down for weeks, sales down, still hoping for subsidy for Wisconsin operation.
Foxconn Technology Group, the Taiwan-based manufacturer with a still shadowy operation in Wisconsin, posted a 90 percent decline in its first quarter earnings for 2020, compared to the first quarter of 2019, as the Wall Street Journal has reported. The company’s net profit for the quarter was 2.08 billion (in new Taiwan dollars) compared to 19.83 billion in the first quarter of 2019. Much of that loss came because the company shut down its plants in China, where most of its business is located, due to the COVID-19 outbreak. It was the lowest quarter profits posted by the company in two decades, Reuters reported.
“The pandemic will continue to cast a shadow of uncertainty over the company,” the WSJ reported, “with April-June revenue expected to fall on year by a single-digit percentage, said Young-Way Liu, Foxconn’s chairman.” In a conference call Liu said “the visibility of our outlook for the whole year is limited” and “there is no way I can offer the outlook for the latter half of this year.”
Foxconn is the world’s electronics contract manufacturer, and most of its production sites have now returned to normal operation, Liu said. But its biggest customer is Apple, and demand for consumer products like smartphones is likely to decline in the current quarter, Liu noted. But the company “will stabilize in the second quarter,” Foxconn said in a statement, as Reuters noted.
“For consumer electronic products, because everyone is staying at home, naturally it affects consumers’ purchasing power and such power might take a very long time to recover,” Liu said.
Meanwhile, Foxconn’s much ballyhooed operation in Wisconsin remains mired in controversy, with all of its promised “innovation centers” in four different Wisconsin cities amounting to nothing more than empty buildings and continuing questions about its main campus in Mount Pleasant in Racine County, where there is little sign of activity and it remains unclear what will be manufactured there. The company has submitted documents to the State of Wisconsin stating it has hired 550 full-time employees and invested more than $280 million in capital expenditures to develop its Mount Pleasant campus, and is requesting a state subsidy worth nearly $45 million. But officials in the administration of Gov. Tony Evers have yet to certify that any subsidy was earned and have repeatedly informed the company it is out of compliance with the contract it signed with the state.
If you think stories like this are important, become a member of Urban Milwaukee and help support real, independent journalism. Plus you get some cool added benefits.
More about the Foxconn Facility
- Microsoft Will Pay $50 Million For Mount Pleasant Data Center Site - Evan Casey - Apr 20th, 2023
- Microsoft Data Center Proposed for Foxconn Land - Evan Casey - Mar 29th, 2023
- Foxconn, We Energies Building Solar Farm at Factory Campus - Joe Schulz - Mar 10th, 2023
- Former Foxconn Employee Alleges Company Commits Wage Theft - Evan Casey - Feb 10th, 2023
- Slate of Foxconn Opponents Running for Mount Pleasant Board - Evan Casey - Jan 4th, 2023
- Foxconn Earns $8.6 Million In Wisconsin Tax Credits - Joe Schulz - Dec 23rd, 2022
- Last Home in Foxconn Site Could Be Sold - Evan Casey - Jul 27th, 2022
- UW-Madison Hires Former Foxconn Executive - Rich Kremer - Apr 5th, 2022
- Nelson Calls on Congressional Oversight Committees to Pursue Information on Botched Foxconn-Oshkosh Defense Postal Deal - Tom Nelson - Mar 30th, 2022
- Foxconn Rebuffed Oshkosh Defense Bid to Build Mail Trucks? - Rich Kremer - Mar 28th, 2022
Read more about Foxconn Facility here
Back in the News
State Imprisons More People Than Any NationSep 8th, 2021 by Bruce Murphy
Brandtjen Looks Foolish on Election AuditSep 7th, 2021 by Bruce Murphy
Evers’ Search for Lt. Governor Hits SnagAug 31st, 2021 by Bruce Murphy