Add Wisconsin to the List of Failed Foxconn Bettors

The ink was barely dry on the lawsuit filed by Lordstown Motors against would-be savior Foxconn when the next round of news hit: the world’s largest ODM/EMS company is pulling out of Wisconsin.

If we go back to 2019, we will recall Lordstown opened the doors of its plant, formerly owned by GM and seen as critical to its hometown’s economic future, to Foxconn, which came bearing (the promise of) much-needed cash. In return, the ODM was to obtain access to Lordstown’s electric vehicle technology, which Foxconn sought as it reportedly focuses on building electronics and other products for what is seen as the future platform for individual and fleet transportation.

That dream ended in a crash, unfortunately but unsurprisingly. The investment never really materialized, Lordstown went bankrupt, and the winners will be the lawyers.

Some 30 miles south of Milwaukee, Foxconn’s much-ballyhooed splash into the Wisconsin cornfields is resolving with the sale of its 315-acre campus to Microsoft.

That’s a far cry from the $10 billion in investment and 13,000 jobs the company forecast — and lots of politicians touted — as longtime homeowners were hit with eminent domain mandates to make way for the 200,000 sq. ft. plant. Some $500 million of taxpayer money later, the prairie landscape is left with a mostly vacant shell. Likewise, company plans to build innovation centers in Madison, Milwaukee, Green Bay, Eau Claire and Racine have mostly been shelved, and the properties are going on the block

What both deals had in common was that they took place in states that of late are highly contested in federal elections. That’s no surprise: Foreign companies have often (always?) tried to influence the outcome of US elections to suit their strategic interests. (The constraints foreign entities should have on such maneuvers, if any, are for others to decide.)

Experienced bettors know when to fold their cards, however, and Foxconn is well-known for exiting the table when it doesn’t like the stakes. When the trade winds blew cold, the company headed for warmer climes.

So a shout out to Georgia, Arizona and Nevada, among others: If Foxconn comes calling, look hard at the cards before asking for a hit.

Foxconn Whiplash

You are to be forgiven if you have whiplash from the multiple changes in direction of Foxconn last week. The world’s largest ODM and EMS company announced it was essentially pulling out of Wisconsin, scaling down its much publicized multi-million square foot campus in favor of a couple of small R&D centers. Then, after pressure from the US government, it quickly reversed course once again, saying the plans were still on.

Wisconsin taxpayers might feel a little like Charlie Brown getting the football yanked out from under him again. Not only does it look ever-less likely Foxconn will create anything close to the 13,000 local jobs it promised, but towns like Mt. Pleasant are already on the hook for hundreds of millions of dollars, the net effect of bonds it issued to pay for the initial construction. And if Foxconn doesn’t deliver, the state must pick up whatever the municipalities cannot pay back.

In any case, when it comes to Foxconn, actions speak way louder than words. Let’s wait to see whether anything actually gets built before commencing with the back-patting.