This is the site where the
Gen6 Fab will be constructed. Wisconsin was ready
to receive Foxconn. It was ready to
receive industrial manufacturing. Foxconn. It's a name that's been in the
news a lot lately for this huge electronics factory it's
building in Wisconsin. So far it's just one building. Tech giant Foxconn is rethinking plans
for a multi-billion dollar plant touted by the president that was
supposed to bring thousands of jobs. So what does Foxconn do? It's the world's largest
contract manufacturer of electronics. Foxconn specializes in making things
like PCs, servers, power supplies, connectors and smartphones. In fact Foxconn is
Apple's largest iPhone assembler. Other big name customers include
Dell, Samsung and Sony. Though not a household
name in the U.S., Foxconn is renowned in China where
it's the largest private employer. If there's one company that's going to
be at the heart of international trade, geopolitics, electoral politics and
technology, it's not Google or Facebook or Apple. It's Foxconn. Now Foxconn has come into the U.S. and it's in the midst of building
a big contentious factory in Wisconsin. America does not have
a single LCD Fab. We are going to change that. As part of the deal, Foxconn said
it would invest 10 billion dollars to build a high tech manufacturing facility
for liquid crystal display, or LCD, screens. I think we can say this is, we
can say, the eighth wonder of the world. Foxconn also pledged to create 13,000
jobs in exchange for around four billion dollars of incentives from
the state of Wisconsin. But things haven't gone as planned. Foxconn has made promises to a number
of places, but hasn't always followed through on them. Clearly the deal that was struck
is no longer in play. So we went to Wisconsin to
find out, what is Foxconn? And what is it really doing
in the farmlands of Wisconsin? Foxconn, simply put, manufactures electronics
for a variety of companies, specifically what's known in the
industry as the three Cs: computer, communication and
consumer electronics. Foxconn is the world's largest
contract manufacturer for electronics. They make a lot of iPhones. They make a lot of Sony PlayStations. They make a lot of
Nintendo Switch gaming consoles. There's a really good chance that in
your house you already have products that were assembled in
a Foxconn facility. All those electronics brought Foxconn $157
billion in revenue in 2018. It employs around a million people
all over the world, with manufacturing facilities in 24 countries including
Mexico, the Czech Republic, Hungary and of course China, among others. The Taiwan-based company is best known
for its partnership with Apple, assembling iPhones, iPads
and other products. Apple is very important
to Foxconn. Apple is Foxconn's largest customer. When Apple does well, Foxconn
tends to do well. And when Apple stumbles a little bit,
Foxconn tends to stumble as well. So when iPhone sales slumped earlier
this year, Foxconn took a hit. The company reported that
profits were down 17.7 percent in the first quarter of 2019. Now, President Trump is imposing tariffs
on Chinese companies and both Apple and Foxconn have been caught
up in the US-China trade tensions. Foxconn'S business has probably been affected
more than any other company on earth by the
US-China trade war. Because Foxconn's the number one exporter of
value from China, they've been hit hardest by Donald Trump's tariffs and they
will continue to be hit hardest by them as well as by Apple's
downturn and a lowering of the sales of iPhones. At an investor's conference earlier this
month, Foxconn said it is prepared to deal with the risks
from the trade dispute. Although both Apple and China's Huawei
technologies have made some changes to their orders, Foxconn says it faces
limited impacts and that it has enough capacity outside China to meet
Apple's demands in the American market. Twenty years ago, Steve Jobs asked Terry
Gou if he could make Apple products and manufacture them in the
United States, so the Apple products could say Made in USA. At that time, Terry Gou said,
"No, that's way too expensive. I can't do that." But now with rising labor costs
in China, there are comparable abilities in other places. Although there's no indication iPhones
will be manufactured in Wisconsin, Foxconn did tell us it now plans
to make much more than the originally planned 75 inch televisions. So a building this size, what volume
of product can we expect to see pumping out of there once
it's at full capacity? I mean that's that's a challenging metric
to tell you, because the products that are associated with
us are multiple products. We will do commercial TVs up to 65
inch, but it also has multiple liquid crystal display sizes that we can produce
that are applicable in a variety of industries, from automotive to
education to entertainment to health care to medicine to sports,
security and smart city application. To understand its ever changing
promises for the factory in Wisconsin, let's first take a look
at Foxconn's history, its rapid growth, and what it's up
to in other countries. The company had humble
beginnings. Terry Gou founded Foxconn with just 75 hundred dollars
in 1974, calling it Hon Hai Precision Industry, a name
that's still used today. The story of Foxconn goes way back when,
you know, he started by making a certain kind of knob for televisions and
he would come to the United States and sell them and really barnstorm
businesses to get them to buy his parts. Coming from that to where he is now, where
Foxconn is now, you have to say it's had a huge rise. Foxconn's first manufacturing plant opened
in China in 1988. It hit the global stage in 2001,
when American based Intel hired Foxconn to manufacture its motherboards over
a major competitor Asus. By 2012, Foxconn was manufacturing
about 40 percent of consumer electronics worldwide. Today, Foxconn has diversified across
a multitude of businesses, from making circuit boards and home
appliances to industrial computers and semiconductors. It acquired Japanese electronics
maker Sharp in 2016 and it was a major investor in Future
Mobility, a car startup that aims to sell all electric vehicles by 2020. And just last year, Foxconn announced
it will buy electronics manufacturer Belkin International, which owns
well-known router and computer accessories brands Linksys and Wemo. And these days, founder Terry Gou is
no longer solely focused on making electronics. Terry Gou is now running
for president of Taiwan. And as a result of that, Terry
Gou's business interests in Foxconn are running directly into his political interests
as a candidate for president of Taiwan. Still Gou and Foxconn have accomplished
a lot since the company's early days. In fact Foxconn was so successful
that it was 25 years before the company reported an annual
dip in revenue. But the company's revenue has decreased
in the past three quarters, going from about 43 billion in Taiwan new
dollars to about 13 billion, thanks in part to a decline in iPhone sales. Foxconn has also received a fair share
of bad press for issues at its factories. The scandal that made Foxconn into a
household name in the United States was in 2010, you had 14 of
its factory workers commit suicide sometimes by jumping off of
Foxconn factory buildings. These people were 16 hour shifts and
they live very close together in very small dormitories. It's a very grim existence. It's gotten so bad that Foxconn has
had to put nets up around the buildings to catch people when
they jump off the roof. In a statement Foxconn says, "Immediately
following the tragic incidents in 2010, Foxconn implemented company wide
comprehensive measures to mitigate against these tragedies
being repeated." Foxconn has also been criticized for a
series of deals that didn't work out as promised. Terry Gou and Foxconn talked about setting
up a plant in Brazil, but that never happened. In 2013, he talked about setting up
a plant in Pennsylvania and that didn't happen. Now those deals weren't as far along
as the one in Wisconsin, but still, Terry Gou has a track record of
promising a lot and delivering a little. Which leads us back to Foxconn's latest
deal, the promise of what would be one of the largest electronics factories in
the world on 3,000 acres of farmland, 30 miles south of Milwaukee,
in the village of Mount Pleasant, Wisconsin. The deal first started when
the White House called the Wisconsin Economic Development Corporation
in April 2017. Days later then-Governor Scott Walker was
in a meeting with Foxconn founder Terry Gou and Wisconsin
EDC head Mark Hogan. I met with Terry Gou in the
White House on April 28th of 2017. That was the first time
we met with the company. And so I've been
involved from day one. Foxconn put out a
request for proposal. Wisconsin and the Village of Mount
Pleasant offered the company almost four billion dollars in subsidies if
it creates the promised number of jobs with an average salary of
just under 54,000 dollars. For Foxconn, the site
location makes sense. It takes a huge amount of water
to clean the glass used in manufacturing LCD screens and Mount Pleasant is less
than 10 miles from Lake Michigan. No other Great Lakes State came
close to Wisconsin's almost 4 billion dollar deal. Why is it worth almost four billion? It's worth the dollars because of the
industry that it's bringing to the state, to the United States
and to Wisconsin, the jobs. But it's very scalable. So if this ended up being an
employer that employed 5,000 6,000 8,000 10,000 jobs in a state that we
have employment of three million people, that's still a
very significant investment. So why did the state
want the deal so badly. And they offered the richest economic
development deal to Foxconn in the history of the United States. Donald Trump wanted to revive American
manufacturing and have a symbol of it. Paul Ryan wanted this plant to
be in his district and it was. Scott Walker wanted to be
seen as the jobs governor. All three of them have
been sorely let down. Hogan, who's stepping down later this
year, has a different official take on why Wisconsin wanted
the Foxconn project. Manufacturing is very much a
part of Wisconsin's DNA. It's our legacy for 150 years,
over 150 years manufacturing has been critical to what we do. It represents almost 20% of our
workforce, 20% of our GDP. And the fact that Foxconn was going
to bring an industry that did not exist in the United States that
was very compelling and very intriguing from our perspective. Racine County, where Mount Pleasant is
based, has promised Foxconn 750 million dollars. This is a great day for American
workers and manufacturing and for everyone who believes in the concept and
the label Made in the U.S.A. Less than a year after Trump announced
the deal, Gou was in Mount Pleasant breaking ground with him. Foxconn's original promise was impressive
but plans have continued to change ever since. This will be one of the largest
jobs ever built in the world. Foxconn was initially supposed to
build a generation 10.5 factory to manufacture screens up to 75
inches for TVs and other devices. In February Foxconn announced it would
build a generation six factory instead, which will
manufacture smaller screens. There are multiple Gen 10.5 facilities around the world and there's
a glut in that market. So really business is market driven and
the Gen 6 factory gives us a greater variety of products to
be effective in the marketplace. So far Foxconn has also fallen short
on the jobs it promised to create. It lost out on a 9.5 million dollar tax incentive in 2018
because it's created 182 jobs, 78 short of the 260 promised by
the end of that year. But that doesn't seem to worry Hogan. That just proves that
the contract works. They didn't create the jobs. It's a performance based contract. They don't get the tax credits. They understand that. There are tax incentives for Foxconn if
we meet certain criteria within the contract with the state and
we're dedicated to that. That in a nutshell is
how Wisconsin says it's protected. If Foxconn doesn't deliver, it won't get
all that nearly $4 billion in subsidies promised by the state. They're moving an industry to the United
States so they really have to get up and running. This is a marathon,
it's not a sprint. But some people, including Wisconsin's
new governor Tony Evers, are questioning Foxconn's promises. Governor Walker lost re-election
to Evers in 2018. Clearly the deal that was struck
is no longer in play. And so we we will be working
with individuals at Foxconn and of course with WEDC to figure out how a
new set of parameters should be negotiated. Tom Stringer has decades of
experience negotiating big construction deals and says that Foxconn in
Wisconsin just doesn't make sense. The math would never have pointed to
this being a location in the first place that could have executed
a project of this scope. I mean the numbers just don't lie. The workforce wasn't there, the skill
sets aren't in the U.S. The margins aren't there to globally
compete unless we wanted to substantially pay more for LCD related products
and I think the market is dictating that we don't. So it's trying to find the business
reason, I think that's something that only Foxconn can answer. So we asked them. Wisconsin possesses an excellent education
system both in our technical colleges and also in our
advanced degree, our universities. And we bring the best in manufacturing
technology to marry with the best in workforce and that's a recipe
for great success and quality product. But the fact remains that if Foxconn does
follow through it would be a very big deal. It is the first-ever TFT LCD factory
in the United States, the first one ever. This is a major undertaking. To make way for Foxconn's huge project,
the land and some Mount Pleasant locals have undergone massive change
in the last two years. This pad itself is equivalent
to 17 football fields. If you're a basketball
fan, 221 basketball courts. This summer we'll start
the vertical building. The floor itself, the slab that the site
will be on, is a 125,000 cubic yards of concrete and
that's 12,500 truckloads. The new Wisconn Valley Science and Technology
Park is so big, nearby I-94 is being expanded from
six lanes to eight. And big enough that dozens of people
have been moved so their homes could be leveled to make
way for the project. Things have changed a lot. There was 12 other homes that were
in this neighborhood and they've all been torn down. Jim Mahoney grew up in Mount Pleasant
and unlike his neighbors, decided not to take Foxconn's offer
to buy him out. He's so set on staying he was planting
trees in the yard when we arrived unannounced. It totally feels like a bad dream. One day I'm the happiest I can be. I got a nice place out in
the county and then five minutes later somebody's telling me I got
to get out of it. Leslie Maj and her husband bought their
Mount Pleasant home in 2017 with the hope of living in
a quiet rural town. But part of their yard is now
being taken through eminent domain to expand the street leading
to Foxconn's plant. And I feel Racine County, Mount Pleasant
and the state of Wisconsin got sucker punched. The environmental impact has
been another sticking point. The project was allowed to skirt
environmental regulations with the state of Wisconsin making an exception on
several points including how much water Foxconn can pipe in from nearby
Lake Michigan and how much natural habitat can be impacted. We peaked last summer at 90 parts
air pollution and the EPA standard for acceptable is 70. Now that's without Foxconn. Our air and our water are important. Our health is important. And we feel like we have
just been railroaded right over. We are expendable. Foxconn insists this is not the case. We're committed to following all
environmental laws and regulations and we're committed to being good
stewards of our community. People really have to be able to
look and understand what the benefits are to their area and I think over a
longer period of time people will be on board with the decision to
be in Mount Pleasant. But for now residents we spoke to
remain concerned by a lack of transparency in Foxconn's plans. I mean I understand Lake Michigan is right
there but I don't know why they picked right here. This stuff is not supposed
to happen in Mount Pleasant. But Foxconn remains unwavering in
its commitment to Wisconsin. I've talked to our corporate and they
have reiterated that we are committed to 13,000 jobs and the
investment in the state. And it's even set a firm
deadline for beginning production on those American made LCD panels:
fourth quarter of 2020. We've met every challenge to date and
we'll meet every challenge that comes up in the future. So you're hopeful? I'm very positive about it and it's exciting
to be a part of it from the ground up literally.
Is it money laundering? I'll bet it's money laundering.
Not much of anything yet.
Nope.