The Taiwanese tech giant has done everything in Wisconsin but what it promised. ‘Phase 0’ appears to have meant storage space.
Foxconn Technology Group hired hundreds of people to sit around and do nothing because the company has never actually had a concrete plan for what it is doing in Wisconsin, according to a new investigation from The Verge based on interviews with 19 current and former employees and thousands of pages of public documents.
The report, published Monday, comes a week after state officials told the company it will not get any of its potential incentive of $3 billion in state tax credits for its project in Mount Pleasant until it signs a new subsidy contract, and two days after President Donald Trump held a rally in Janesville in which he spoke about the floundering development he helped bring to Wisconsin for the first time in about two years.
Current and former employees told The Verge that Foxconn has done practically nothing since first announcing its project in 2017, despite spending millions of dollars constructing massive buildings—which ended up being about one-twentieth the size originally promised—and spending millions more buying empty “innovation centers” in cities throughout the state.
“Imagine being in a job where you don’t really know if it’s real or not,” one employee told The Verge. “Or you know it’s not real, but you don’t know it’s not real.”
Foxconn originally promised to spend $10 billion constructing a 20-million-square-foot “Gen 10.5” manufacturing campus intended to produce large LCD screens and employ 13,000 people. Expectations have since been tempered, with the company now building a one-million-square-foot “Gen 6” factory that is not capable of producing screens nearly as large as a Gen 10.5 plant.
Since then the company has made and broken an assortment of promises and, according to The Verge, internally considered a multitude of ideas ranging from building a fish farm to pulling out of Wisconsin altogether.
Among the biggest revelations in The Verge’s report is that Foxconn last month received a permit to use the supposed manufacturing facility for storage.
It does not appear that permit came up in any Mount Pleasant meetings in September, according to a review of the month’s meeting agendas and minutes by UpNorthNews. However, project director Claude Lois told the Village Board in his September project update that the company is about to begin using 300,000 square feet of the facility for “Phase 0.” He didn’t provide any details about Phase 0.
Foxconn told UpNorthNews last week it would soon begin operations in Phase 0 but it did not respond when asked about what Phase 0 entails.
The company’s wavering commitment to creating the facility it promised—as well as the jobs that were supposed to come with it—has played out largely in the public view, but The Verge’s reporting is the most comprehensive internal look yet into the company’s presence in Wisconsin.
Employees described a toxic, confusing work environment in which people were hired to sit around and do nothing just so the company could meet its hiring goals for tax subsidies, and management verbally abused rank-and-file workers on a regular basis in full view of coworkers.
Infighting among the company’s web of local subsidiaries meant Foxconn was essentially fighting itself. In one vivid anecdote, Foxconn purchased “the biggest pieces of s–t” golf carts that one subsidiary planned to turn into self-driving vehicles to use in nearby Racine, which partnered with Foxconn for a Smart City initiative.
That idea was abandoned—Racine is now partnering with US Cellular for the Smart City program—and the golf carts sat unused until the company decided to use them as security vehicles around the Mount Pleasant factory. But the subsidiary in charge of security refused to buy the golf carts from the subsidiary in charge of the Smart City initiative, so employees took the carts for joy rides until the batteries died.
The Wisconsin Economic Development Corp. found just 281 of the company’s more than 550 alleged employees at the end of 2019 met the requirements laid out in the contract for Foxconn to qualify for tax credits. That number was far short of the minimum 520 employees Foxconn needed to earn any credits at all, and far short of the 2,080 target as laid out in the 2017 agreement.
The state’s decision to disqualify Foxconn from earning tax credits earned rebuke from local officials including Racine County Executive Jonathan Delagrave and Assembly Speaker Robin Vos (R-Rochester), but even Trump, who still believes the project will come to fruition, agreed with withholding the subsidy.
“If they don’t meet the standards, you shouldn’t give them the tax credits,” Trump told WTMJ in a Saturday interview.
Foxconn founder Terry Gou issued a lengthy statement after The Verge published its report. In it, Gou lauded Trump for his involvement in bringing the company to Wisconsin and said “the relationship between Foxconn and Wisconsin has already produced tremendous benefits.”
It is true that local governments have seen some benefits, as Delagrave, Vos, and Mount Pleasant President Dave DeGroot have repeatedly said they’re happy with the progress. They point to the project’s footprint, which was assessed at $522 million as of January despite being a fraction of what the company promised; that assessment makes Foxconn the single largest taxpayer in Mount Pleasant, local officials say.
But outside of Mount Pleasant, the state has little to show for the historic deal, and Gou’s statement included a thinly veiled threat warning Gov. Tony Evers against pushing the company too hard to live up to its end of the bargain.
“Foxconn will remain committed to the completion and continued expansion of our project and investment in Wisconsin as long as policymakers at the federal, state, and local levels remain committed to Foxconn and the very important technology development goals driving the company’s investments, as President Trump has done,” Gou said.