Economy

Report: Foxconn May Bring in Chinese Workers to Staff Their (Smaller) Factory

JM Ashby
Written by JM Ashby

Foxconn, the Taiwanese technology giant that signed a deal with the state of Wisconsin worth over $4.5 billion to subsidies, recently announced that it would be building a smaller factory than they initially committed to building.

The New Yorker reported this week that the smaller factory the company intends to build in Wisconsin will only employ about 3,000 people, not the 13,000 they initially committed to hiring.

Now, I was going to write a post about the New Yorker report (which also details how the subsidy has hurt Scott Walker's chances), but the Wall Street Journal reported something even more darkly comedic this morning.

According to the Wall Street Journal, Foxconn has been preparing to transfer engineers from overseas to work at the factory in Wisconsin for reasons that should have been obvious when development was first proposed: there aren't many engineers in rural Wisconsin.

MOUNT PLEASANT, Wis.— Foxconn Technology Group is considering bringing in personnel from China to help staff a large facility under construction in southern Wisconsin as it struggles to find engineers and other workers in one of the tightest labor markets in the U.S.

The company, the Taiwanese supplier to Apple Inc., has been trying to tap Chinese engineers through internal transfers to supplement staffing for the Wisconsin plant, according to people familiar with the matter. [...]

Foxconn Chairman Terry Gou is looking to company engineers in China to transfer, according to people familiar with the matter. Some engineers have expressed reluctance to relocate to Wisconsin, which is less well-known to Chinese workers than U.S. tech hubs in California or New York.

One engineer who declined to give his name said he wouldn’t want to move to a place he worried could be as cold as Harbin, a northern Chinese city known as “Ice City.”

This matters for reasons beyond appearances.

Even if Foxconn built a large factory that employs at least 13,000 people, the state's investment was not expected to turn a profit for the state until at least the year 2042. Moreover, that depends on the company hiring a majority of their employees from within Wisconsin.

Foxconn is not going to build a larger factory, they're not going to hire 13,000 people, and it seems all but certain that a majority of their employees won't be permanent residents of Wisconsin. Many of them may not even be Americans.

Foxconn has issued a statement denying the Wall Street Journal's report, but Alan Yeung, Foxconn's director of U.S. strategic initiatives, told the Journal that "no preference" has been given to residents of Wisconsin.

No shit.

All of this was predictable. We knew they were never going to build a larger factory to manufacture obsolete liquid crystal display (LCD) screens for the next 30 years. We knew their smaller factory would be heavily automated, and we knew they wouldn't find enough highly skilled (or even low skilled) workers in Paul Ryan's suburban milquetoast district.

Foxconn has already replaced tens of thousands of employees with robots in other countries and plans to replace 80 percent (800,000 out of 1 million in China alone) of their workforce within the next decade.

Call it a conspiracy theory if you'd like, but I believe Foxconn denied the Wall Street Journal's report this morning because it came out on election day. I'm certain we'll learn the Journal's report was accurate.

  • muselet

    “If after ten minutes at the poker table you don’t know who the patsy is, you’re the patsy.” –variously attributed

    Scott Walker was the patsy. Which would be mildly embarrassing—assuming Walker is capable of such a human reaction—if it weren’t the citizens of Wisconsin who will have to pay off his foolhardy bet.

    I fervently hope Wisconsinites don’t ever forget this.

    –alopecia

    • At least Walker lost bigly. That’s a relief.

  • 1933john

    Without a doubt, FOX-CON is the name of this game.

  • Wookie Monster

    Foxconn pulled this same scam in Pennsylvania: get the state to pony up huge subsidies with promises of lots manufacturing jobs, then slowly ratchet down expectations. At least in Wisconsin they actually broke ground. The site in Harrisburg that was supposed to be their new factory is still a vacate lot years later.

    • Governor Wolf wouldn’t build a big enough trough for Foxconn to feed at.

      • Wookie Monster

        This actually happened under his predecessor, Corbett.

        • Ah. That makes more sense.

  • Badgerite

    Just recently there was a University Place lecture on Wisconsin PBS by a professor Robert McChesney on his book, Digital Disconnect, How Capitalism is Turning the Internet Against Democracy. He mentioned that in private people like the head of Foxconn will tell you that they could now operate their facilities at close to %100 automation. And that they don’t because there would be an popular uprising against them. That is what keeps them from fully automating. And that is all that keeps them from it. The technology is there already.
    So….heck of an ‘investment’.

    • katanahamon

      It’s always a scam for the wealthy. Look at all the bullshit subsidies and taxpayer funded stadiums across the country. The Olympics are another story I could go on about how we got screwed, how Mitt Romney’s “rescue” wasn’t one. Corporations, sports, whatever. I had a colleague who had a fundamental rule..it was called “you’re always fucked.” I’d like to add another..”It’s always a scam for the rich.”

      • Badgerite

        Words to live by. I jest but yeah, that is why the trump is hitting the racist button so hard. To distract from how utterly he is screwing over his voters.

  • katanahamon

    The “little person” is getting smaller every day the Repubs stay in power.

  • simpfan

    There’s a reason why Walker hasn’t been overly eager to talk about this on the campaign trail. This will be his lasting legacy.

    • Draxiar

      What are the odds FoxConn paid him handsomely?

  • Why can’t the state withdraw the subsidies since FoxConn isn’t fulfilling it’s end of the “contract”? If Walker loses, can the next governor undo this stupid deal?

    • JMAshby

      My understanding is that some of the long-term tax breaks are tied to certain metrics, but a significant amount of money is locked in or has already been spent. The money they’ve already spent buying and clearing land is obviously gone. About $500 million of the $4.5 billion are indirect subsidies for things like widening roads and upgrading sewer systems and other infrastructure to accommodate a large factory (a factory that may never be built).