By LAUREN ZUMBACH
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| Kim Mahoney stands outside her home near the ongoing construction at Foxconn's manufacturing facility on Feb. 13, 2020 in Mount Pleasant, Wisconsin. Mahoney and her family moved into their house in February 2017 and later that year they learned that Foxconn planned to build. (Stacey Wescott / Chicago Tribune) |
By the end of the year, Taiwanese electronics giant Foxconn expects to start production at a brand-new liquid crystal display manufacturing plant in southeast Wisconsin.
The million-square-foot building’s outline is visible from what used to be quiet two-lane roads, widened to accommodate the surge of activity Foxconn is expected to bring to an area that was once largely farmland. A handful of additional buildings and a power substation are taking shape nearby.
Foxconn’s plans have changed dramatically since its initial announcement, feeding skepticism over whether it can deliver on a pledge to create 13,000 jobs and turn southeast Wisconsin into a hub of high-tech electronics manufacturing. Some question whether the project will pay off for Mount Pleasant and Racine County, which are investing hundreds of millions of dollars and have seen several residents displaced from their homes.
“It’s like a bait-and-switch,” said Kim Mahoney, who lives in the only house still standing in what used to be a small subdivision on the Foxconn site.
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| Kim Mahoney's house is the only house still standing in area in a small subdivision near the Foxconn construction site, in Mount Pleasant, Wisconsin, shown July 1, 2019. (Coburn Dukehart/Wisconsin Watch) |
But backers say Foxconn’s arrival has been a much-needed shot in the arm for workforce development efforts in an area lacking in skilled manufacturing workers and they remain confident even a scaled-down project will boost the local economy.
“You would love the movie if you hadn’t seen the trailer,” said Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce.
It was “the trailer” that convinced the state to offer an incentive package worth up to $3 billion if the company hit benchmarks tied to jobs, wages and investment and to fast-track preparations for Foxconn’s arrival. Local government agencies agreed to front investments in infrastructure improvements and buy property promised to Foxconn, at a total cost currently estimated at $808 million.
The company’s agreement with Mount Pleasant and Racine County calls for those expenditures to be repaid over time through property taxes and special assessments. Foxconn is obligated to make up any shortfall if it doesn’t raise the value of the main site to $1.4 billion by 2023.
Foxconn continues to fulfill its financial obligations under the local contract, which “ensures strong taxpayer protections and minimum valuation guarantees,” Racine County Executive Jonathan Delgrave said in a statement. The company paid $8.4 million in property taxes and special assessment payments, in addition to a one-time $60 million payment, as of Dec. 30.
Meanwhile, Wisconsin officials have said the company’s shifting plans call into question its eligibility for up to $3 billion in incentives negotiated at the start of the project. Foxconn missed job creation and investment targets required to earn tax incentives in 2018, and won’t report on last year’s progress until April.
It’s not that nothing is happening in Mount Pleasant. Foxconn said earlier this year it has invested nearly $372 million at the site, where it has started building a 260,000-square-foot plant that will manufacture and assemble components for computer servers and a data center with offices, in addition to the million-square-foot liquid crystal display factory.
But it’s also building a different kind of factory than the one agreed to in its contract with Wisconsin. The company originally was to build a Generation 10.5 factory that would produce large LCD panels often used to make large flat-screen TVs. Instead, it will build a Generation 6 facility producing smaller panels with potential applications in education, medicine, entertainment and the military.
A smaller Generation 6 factory would be less likely to attract additional suppliers to hoping to do business with Foxconn to Mount Pleasant, said Bob O’Brien, co-founder and president of Display Supply Chain Consultants, who was recently hired by the state as an expert on the flat-panel display industry.
Those other businesses would have brought more jobs and helped build out a “Wisconn Valley” beyond just Foxconn.
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