UPDATE: Jan. 31, 2019: Foxconn may not build a $10 billion manufacturing campus in Wisconsin despite its claims last week that construction is on schedule with more than $200 million invested so far, according to Reuters, which reported yesterday that the company has signaled that it may scale back or even abandon its original plans.
The Taiwanese firm originally planned to manufacture LCD technology products at the site, but officials have since said that production in the U.S. would not be economically feasible. The assessment is based on how much it would cost to create the required 13,000 manufacturing jobs, for which state and city officials promised tax credits and incentives in return. Instead, the company indicated it would hire mostly researchers and knowledge workers to make the location more of a technology hub than a plant.
Foxconn executives, however, reportedly told local Wisconsin officials yesterday that, despite reports this week, it will indeed invest as much as $10 billion in the project and carry through with the goal of hiring the total number of manufacturing employees highlighted in its original plan.
Dive Brief:
- Terry Gou, CEO of the Taiwanese manufacturing company Foxconn Technology Group, notified the Wisconsin Economic Development Corp. through its FEWI Development Corp. arm last week that it would not yet try to tap into hiring incentives for its $10 billion LCD display factory in Mount Pleasant, Wisconsin, because it has failed to meet the agreed-upon goals.
- Gou said the company created 1,032 direct jobs in 2018, including 854 construction-related positions, but only 178 qualified for the incentive program. The company could have earned $9.5 million in tax credits, the Milwaukee Business Journal reported, if it had created 260 jobs. The manufacturer is in line for approximately $3 billion incentives if it creates a total of 13,000 full-time Foxconn jobs at the facility.
- Despite the setback, Foxconn reported that construction is on schedule, that it has invested more than $200 million into the project so far and has hired 95% Wisconsin-based companies. Gou added that crews have moved 4 million cubic yards of dirt and completed construction of a 120,000-square-foot multipurpose building.
Dive Insight:
In July, Foxconn announced that it had hired 37 contractors to perform work on the now-complete multipurpose building, where contractors, during the construction phase, will share space with company research and development teams. This brought total contract awards to $14 million. The general contractor for the project is the joint venture of M+W Group and Gilbane Building Co.
The joint venture has set a project goal of 60% Wisconsin-based contractors, with state residents performing 70% of the work hours — 10% of the 70% going to minorities, women and veterans. The team will aim for 10% Racine County, Wisconsin, subcontractors as well.
Whether in rural or urban locations, owners and developers that want to build large construction projects often realize benefits when they are prepared to make commitments to the local community and listen to their preferences. This could even mean changing the very nature of the project.
One instance of this was evidenced by a Chicago project making headlines this week. Sterling Bay proposed a massive mixed-use project anchored by an 18,000-seat soccer stadium and a Live Nation entertainment district. Twice Sterling Bay had to revise its master plan to meet the approval of local residents and Alderman Brian Hopkins. Most residents that chimed in wanted more public and park space and independent music venues instead of such large event facilities. This opposition was driven by concern about potential congestion and a decrease in the quality of life for those who already live near the site. On Jan. 20, Hopkins announced that the developer had removed the soccer stadium and Live Nation components.
