CBS58 - Emilee Fannon
Apr 19, 2022
MADISON Wis. (CBS 58) -- A former Foxconn executive is putting blame on the Evers administration, media reports, and the business climate as reasons why the company was unable to deliver
MADISON Wis. (CBS 58) -- A former Foxconn executive is putting blame on the Evers administration, media reports, and the business climate as reasons why the company was unable to deliver on many of its promises and commitments to Wisconsin.
Former Foxconn executive Alan Yeung tried to explain what went wrong with Foxconn on an episode of Decoder, a podcast from the Verge who reports on the business and technology sector.
Yeung said one of the main reasons Foxconn faced challenges to build and create thousands of manufacturing jobs in Wisconsin is because of a change of leadership in 2019 after then-Governor Scott Walker lost to Democratic Governor Tony Evers.
"The business environment and investment climate changed a lot in Wisconsin, partly because we did have a change of leadership within the governor’s mansion," Yeung said on the podcast. "That is not the entire reason, but it is a big chunk of it."
Tony Evers being sworn into office was not a reason why Foxconn didn't build a factory or reach its commitments, said the Wisconsin Economic Development Corporation, the agency who tried to amend Foxconn's contract under two administrations.
In 2017, Foxconn reached a deal with the state to build the first Generation 10.5 LED factory in the U.S. that would bring 13,000 jobs to Wisconsin. But that didn’t end up happening.
After signing the contract with the Walker administration, the company announced in 2018 it would instead shift to a Generation 6 facility to build display panels. WEDC worked with Foxconn to amend their contract to update the terms of their agreement, but that didn't happen until 2021.
"Under two administrations, WEDC and Foxconn worked closely to better reflect both sides’ interests, which resulted in an amended contract last year that saves Wisconsin taxpayers $2.77 billion while providing the company with the flexibility it needs to compete in the global market," WEDC said in a statement.
Yeung also blamed media reports for impacting Foxconn's reputation when they were trying to scale the facility. The company has a strict policy of not talking to reporters.
"The kind of attack that we received, almost from day one after the contract was signed, was basically unprecedented,” he said.
If the company reached job hiring targets it would've qualified for $29.1M in tax credits, but they consistently fell short after breaking ground – a main reason why many residents cared about the project.
The state also spent big bucks in preparation for the Mount Pleasant facility, including new roads to ease traffic around the plant. Meanwhile, the Village of Mount Pleasant and Racine County prepared to spend over $900 million to transform the area for the project, including having homeowners leave their property for payouts.
The Mount Pleasant campus is now mostly a ghost town.
Innovation Centers
During the 2018 election cycle, Foxconn purposely held back the announcement for an innovation center in downtown Madison for political reasons, according to Yeung.
It was one of four hubs the company promised to employ hundreds of workers in in cities such as Milwaukee, Green Bay, Eau Claire and Racine.
"We actually purposely scaled back the announcement of the innovation center for Madison until the following April, because it was too close to the election," Yeung said. "It really is not fair that we announced that one a few weeks before the November election in 2018."
Foxconn touted the center because they would be located by nearby colleges to recruit students, but the innovation centers never materialized.
Two years after the announcement, nothing opened and none of 1,200 jobs were filled.
After the 2018 election, Yeung said Foxconn wanted to focus more on meeting their expectations and hoped the news articles "attacking" them would "die down." But that wasn't the case.
Former President Donald Trump, who praised the company to be "the eighth wonder of the world" during Foxconn's groundbreaking ceremony, was vying for a second term.
"If after the election, they all died down and everything went back to, 'let’s work together and make it happen,' we would be very happy,” Yeung said. “That wasn’t really the case then, and we know why. There was another election coming up with the biggest supporter of all, which was President Trump, so we live with that.”
What's being built?
Under the new terms of the amended contract, Foxconn is expected to invest up to $672 million by 2026 compared to the $10 billion they originally said they would in 2017.
The new agreement also scales back the number of jobs it plans to create to 1,454 and drastically reduces the capital investment.
Still, many are left in the dark on what the company will build or do next.
Yeung said the company is expected to remain tight-lipped about what they will build, noting that something is in the works but didn't provide details.
"You cannot make conclusions or inference without getting the other side's story," said Yeung. "In other words, it is not like nothing is being built there. They would just choose not to tell you."
