Report: Foxconn fails to fulfill promises, employees fed up

Report: Foxconn fails to fulfill promises, employees fed up

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MILWAUKEE (CBS 58) -- Foxconn is under fire after an investigative report shows the company is failing to create even a fraction of the 13,000 jobs it promised and has no plans to become the manufacturing giant it pledged to be two years ago.

Josh Dzieza, a reporter for The Verge, interviewed 19 current and former employees for the in-depth investigation into the Foxconn project. Some of those employees say workers are spending their days watching Netflix, unsure what their jobs even are.

And now sources inside Foxconn tell CBS 58 people are worried about retaliation, as executives try to figure out who talked.

When Foxconn first announced its Wisconsin project, it pledged to invest $10 billion in the state and create 13,000 jobs. The LCD manufacturing facility was supposed to be 20 million square feet, officials boasting it would be large enough to hold 11 Lambeau Fields.

The company is not on track to fulfill those promises and the report from The Verge says it probably never will.

“What I found is Foxconn didn’t have much of a business plan to speak of when it came into Wisconsin,” said Josh Dzieza, The Verge reporter who wrote the story.

After LCD screens failed, Dzieza reports Foxconn tried to find other uses for the space.

“There was talk of finding things to export,” Dzieza said. “So they looked at dairy, fish, cosmetics, other things, they met with the department of agriculture, that never went anywhere.”

In September, Foxconn even got a permit to change its use from manufacturing to storage.

“I guess I was shocked that it’s even worse than I thought it was,” said Kim Mahoney, a Mount Pleasant resident.

Mahoney and her husband Jim live in the lone house inside the Foxconn site after refusing to sell. All their neighbors’ homes were knocked down for the project.

“What about those people who were forced to leave with threats of eminent domain or what about the hundreds of millions of dollars Mount Pleasant is spending on the roads and the land acquisition?” Kim Mahoney said.

Still, some are standing by the project.

In a statement, Racine County Executive Jonathan Delegrave said Foxconn is the largest taxpayer in Mount Pleasant. “With over a half billion dollars invested and four buildings either completed or under construction, we’ve seen substantial progress at Foxconn’s Racine County campus.”

And in a statement, Foxconn Technology group says the company employs approximately 550 people and is “proud of the material contributions our company has made in Wisconsin as part of the $750 million we have already invested over the past three years.”

But CBS 58 sources say Foxconn executives are scrambling, trying to find out who talked to Dzieza, and threatening to take action.

CBS 58 asked about consequences for workers.

Foxconn Technology Group said, “Foxconn is not aware of any legal actions, and in this case, Foxconn does not comment on any personnel matters or on any ongoing or potential legal matters.”

Foxconn says it's renegotiating its contract with the state because of the “changes” to the business plan. Those negotiations stalled last week when the state announced the company won’t get any 2019 tax credits.

Still, Foxconn says it hopes to reach a new deal.

You can read The Verge article here

Full statement from Racine County Executive Jonathan Delegrave:

“With over a half billion dollars invested and four buildings either completed or under construction, we’ve seen substantial progress at Foxconn’s Racine County campus.
Racine County has already experienced an array of benefits and new growth due in part to the Foxconn development, including a number of new housing developments, two announced new hospitals, upgraded water and sewer infrastructure and expanded I-94. Foxconn continues to meet its financial obligations under the local contract, having become the largest taxpayer in the Village of Mount Pleasant.
We also recognize COVID-19 has impacted all of us and Foxconn must be responsive to demand and changing economic and market conditions. As we all adjust to new realities and confront a long economic recovery from COVID-19, Foxconn will be a big part of Racine County’s future and we remain focused on positioning our businesses and residents for success.”

Full statement from Foxconn Technology Group:

"Foxconn refutes the allegation that the company hired employees only to achieve tax incentives. Foxconn currently employs approximately 550 people, over 90% of whom are Wisconsin residents. Foxconn is proud of the material contributions our company has made in Wisconsin as part of the $750 million we have already invested over the past three years, despite having never received any tax incentive payments from the Wisconsin Economic Development Corporation (WEDC). We are proud that over 90% of the contract value for projects dedicated to the construction of the Wisconn Valley Science and Technology Park has gone towards Wisconsin businesses. In addition, we are proud of the nearly 2,400 construction workers who have worked through the cold winter days and the summer heat to construct our expanding facilities.
Many Wisconsin employees have found success embracing our challenges such as the assimilation of cultural differences, adapting to changing business needs, and finding ways to contribute to the company as their roles have evolved. The melding of cultures that has taken place in recent years is somewhat reflected in the documentary American Factory; in this case, however, Foxconn remains in Wisconsin. Foxconn’s progress in Wisconsin has been achieved despite many growing pains that include the need to explore new business opportunities, adjust to changes in global customer requirements, and a constantly evolving global technology industry.
In response to changes in global technology markets which were greatly accelerated by COVID-19, Foxconn entered into formal contract negotiations beginning in August 2020 with WEDC officials in good faith to discuss new terms of an agreement that have a consequential impact on Racine County and the Village of Mount Pleasant. Unfortunately, WEDC’s determination of ineligibility for performance-based incentives during ongoing discussions was a surprise that threatens the good faith negotiations.
While we are disappointed with the WEDC actions, we are confident that Foxconn and WEDC will be able to resume discussions and work together to reach an agreement that will support our efforts to bring smart manufacturing technologies and jobs to Wisconsin. We appreciate the significant support we continue to receive from local officials, our academic and non-governmental organization partners, the Wisconsin business community, and the vast majority of state officials."
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