A report today in the Nikkei Asian Review, said that Foxconn Technology Group is considering a scale-back of the massive manufacturing plant it’s contracted to build in Wisconsin.
But, the company insists it remains committed to eventually following through on the $10 billion project.
Nikkei Asian Review, an Asia-focused business publication, reported that a source said the company is shifting from its original plans to produce large LCD display screens in Wisconsin to focus on using the site to make “diversified displays for cars, personal computers, tablets, mobile devices, televisions and niche products.”
The shift would represent a reduction of the project’s scale.
According to NSR, there’s already a glut of large LCD screens in the U.S. Critics of the deal had said from the beginning that the current state of oversupply, which has resulted in falling prices, would present a challenge for Foxconn.
The project is a political hot potato. Scott Walker agreed to give the company $4.5 billion dollars in exchange for Foxconn’s promise to employee up to 13,000 people at the site in Racine County. Walker also agreed to give Foxconn permission to ignore Wisconsin environmental regulations.
In addition, the deal would provide the plant with seven million gallons of Lake Michigan water per day, although other members of the Great Lakes Compact have disputed Walker’s authority to fulfill that request.
Local governments in the area surrounding the plant’s site also have committed resources to the project, and Walker has launched an $8 million campaign to lure workers from Illinois and Minnesota to work at the plant.
Walker has already handed out the first major contract on the project — to Jon Hammes, who is a major Walker donor as well as campaign chairman for his gubernatorial re-election bid.
Although Walker has boasted of his success in landing the project, Donald Trump has taken credit for it.
The Democratic Party of Wisconsin was quick to jump on the news of a scaleback as yet another sign of Walker’s incompetence and desperation. In a press release, WisDems said that Foxconn has a worldwide reputation for pulling out of deals and leaving their project partners hanging.
Foxconn in 2013 promised to build a $30 million factory in Pennsylvania that would have employed 500 workers. There was no follow-through. The next year, the company reneged on a $1billion deal in Indonesia, and the same happened the following year in India.
“Foxconn has a history of breaking promises to communities, which Gov. Scott Walker ignored as he forced Wisconsin into a shady Foxconn deal at lightning speed,” said party spokeswoman Melanie Conklin. “It appears Foxconn may break promises to Wisconsin before they even break ground in our state.”