Foxconn Could Invest $13 Billion

The good news: Foxconn’s chairman, Young-Way Liu, speaking in Taipei on Tuesday, said the Taiwanese company could invest as much as $13 billion on its long-stagnant project in Mount Pleasant in Racine County. That’s $3 billion more than the company originally promised back in July 2017, when it signed a memorandum of understanding with then-Governor Scott Walker that became the basis for legislation that committed taxpayers to a massive tax subsidy for the company. This increase of up to 30% in the original investment was reported in a story by the Guardian.

The bad news: that big investment would come only if Foxconn decides to manufacture electric cars at the Mount Pleasant campus. It was just four weeks ago that Foxconn announced it would be making electric cars in a partnership with the California-based startup company Fisker Inc, and the most likely location was in Mount Pleasant. But now Foxconn says it won’t decide until July whether to manufacture electric vehicles, and also hasn’t decided whether it would do so in Wisconsin or Mexico and that decision may not happen until the end of the year. And even if it happens and is located in Wisconsin, production wouldn’t start until the end of 2023, more than six-and-a-half years after the deal with Wisconsin was first announced.

In short, this latest announcement is now just a maybe, coming after a long list of proposals Foxconn floated over the last three-plus years that have never happened. The company’s original plan to build a Gen 10.5 LCD manufacturing plant was abandoned and replaced by a plan to manufacture Gen 6 LCD products, which never happened. It has flirted with plans to make everything from airport coffee kiosks to fish farming or dairy exporting to data server racks. In May 2020 came the plan to manufacture ventilators, which was dropped a couple months ago without one ventilator being made.

For that matter, manufacturing electric vehicles is something Foxconn has by now promised with different companies and potential locations several times. As The Verge reported: “Already this year, Foxconn announced it will build cars with Geely, China’s largest private automaker, as well as with floundering Chinese startup Byton… Foxconn also announced in January 2020 that it plans to make electric vehicles with Fiat Chrysler… The status of that joint venture is unclear; Foxconn has not responded to multiple requests for comment on the project over the last year, and a spokesperson for Fiat Chrysler repeatedly declined to comment.”

There was a not-so-reassuring, Rip Van Winkle feeling to Young-Way’s comment, a good year or more since the electric car boom began, that “Recently we found maybe there’s a good product to have made in the US, and that is EV.”

It’s also not clear whether Foxconn would be be manufacturing cars or components. Young-Way suggested the goal was to compete with companies such as Magna, which recently announced a project to manufacture EV components.

“Asked if he was worried about domestic US perception of the company if the plans fell through again,” The Guardian reported, Young-Way said it made “business sense” to follow through. “We already have the land there, some factory buildings there,” he said. “We’re already there, so we better make good use of it. I’ll try my best to have good use.”

Which is sort of reassuring, though it does raise the question: how much more slowly would Foxconn’s Wisconsin project have progressed if company officials weren’t trying their best?