8 ms·

Can someone explain to me why Foxconn didn't build the plant? Why would they go through the trouble of negotiating this deal, which ended up phenomenally in the

Can someone explain to me why Foxconn didn't build the plant? Why would they go through the trouble of negotiating this deal, which ended up phenomenally in their favor, just to throw their hands in the air and walk away?

pen2l 6y ago
In a nutshell, it mistook the nature of labor folks are used to here and its costs. Indeed wildly different from China and elsewhere.
- 1cvmask 6y ago
  It’s funny that they are downvoting you for stating the obvious no-brainer explanation. Just curious as I am seeing more of this on HN lately or is it just the Baader Meinhof phenomenon after I read someone else complain about the recent downvoting phenomenon for stating the obvious. Has the readership changed of HN or more specifically the commentariat?
  - pen2l 6y ago
    It wasn't really my take or opinion, I rather recalled it being cited as the reason by Foxconn itself in multiple instances. Also, I'm from Wisconsin, and an old EECS professor explained this to be the reason from his first-hand knowledge of some conversations with Foxconn. Here is one citation I was able to find quickly: https://www.reuters.com/article/us-foxconn-wisconsin-exclusive-idUSKCN1PO0FV https://www.reuters.com/article/us-foxconn-wisconsin-exclusi... He said the company was still evaluating options for Wisconsin, but cited the steep cost of making advanced TV screens in the United States, where labor expenses are comparatively high. “In terms of TV, we have no place in the U.S.,” he said in an interview. “We can’t compete.” Foxconn has factories in Mexico, Chennai, Malaysia etc. which produce a significant amount of devices but I doubt a factory in US will take off. This article from 2012 about the Steve Jobs "These jobs are not coming back" remark is probably still true: https://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html https://www.nytimes.com/2012/01/22/business/apple-america-an...
    - buran77 6y ago
      > I rather recalled it being cited as the reason by Foxconn itself in multiple instances. It's more plausible that any company will give the more acceptable, easily digestible explanation, rather than the real one. But really it's the politicians who won, first by banging their chests for all the investments and jobs they created, now for getting an easy out. They can't be blamed for not seeing through any ploy because they can argue Foxconn obviously had good intentions sabotaged by "a misunderstanding" that couldn't have been caught. It's very unlikely (by that I mean close to impossible) that Foxconn just "blundered", went through many rounds of negotiations, and started building, while genuinely not being aware that the US labor market is different from the Chinese one.
    - smt88 6y ago
      You're being downvoted likely because of how naive it sounds when you take what Foxconn says at face value. Large companies are unlikely to ever tell the truth about their motivations, but they're even less likely to when they were doing something manipulative and dishonest, as Foxconn was here.
    - CydeWeys 6y ago
      Your mistake here is taking a multinational corporation at its word, especially one known for playing games with subsidies in other countries too. These quotes are the cover story from corporate PR, not the truth.
    - LargeWu 6y ago
      The alternative is that Foxconn is lying, and they never had any intention of actually opening the factory, which I think is a far more likely explanation.
    - KZZ 6y ago
      The new approach is contract manufacturing for customers who are uncomfortable with manufacturing being performed in China, speaking from first-hand experience. This demand does exist and is what is going to be leveraged in the new park.
  - Semaphor 6y ago
    > Has the readership changed of HN or more specifically the commentariat? My personal impression is, that it got a lot worse since Covid, which I attribute to more people doing home office and/or having more free time. Any discussion forum that grows gets worse. But both my impressions and the 2nd part might be wrong.
    - 1cvmask 6y ago
      I think you nailed it with Covid. Critical thinking requires discourse, and discourse on all the possibilities beyond the dominant narratives or paradigms. Downvoting does not make reality or the “ugly” truth go away. We should be here to discuss and not be afraid to ruffle feathers and have easily offended sensibilities.
      - sigmaprimus 6y ago
        Beat me to it!
    - sigmaprimus 6y ago
      Since You qualified your own statement as being possibly being wrong, I would argue that more engagement alone doesn't result in more down votes. I have observed that any comments criticizing anyone, regardless of wether they are justified or not seem to be recieved poorly on modern forums. I believe this is due to an ongoing effort to make forums safe spaces, somehow honest critical thinking is no longer accepted in the current environment. Right or wrong, it is what it is. So if You are really concerned with the fake points You are accumulating then just tow the line, get with the woke SJW movement or submit articles of interest to balance out the backlash from the mob....I probably better start looking for a good article :P
      - 1cvmask 6y ago
        And the downvotes on your comments begin....
        sigmaprimus 6y ago
  - Loughla 6y ago
    I genuinely don't understand how 'international mega-corporation doesn't understand international labor differences' is a no-brainer. Please explain that to me. That seems like one of the first things that any company should evaluate.
    - saalweachter 6y ago
      Honestly? I assume the people who negotiated the deal are a different department from the people who would have implemented the deal. They went big and went home and now it's someone else's problem.
  - bildung 6y ago
    Is it really a no-brainer that a giant transnational company signed a multi-billion dollar deal without anyone investing half a day looking into the situation of the labor market of the target region?
  - DaedPsyker 6y ago
    You say stating the obvious and yet it simply isn't. It was a heavily subsidised political stunt that Foxconn could half-ass. They rolled out the red carpet, exempted them from environmental regulations and basically built the infrastructure for them. Even four years ago they said the number of jobs was a wish not a promise, they were BS artists. They weren't some naive tiny company.
  - rideontime 6y ago
    The downvotes might be coming from people who are actually familiar with the situation and know that the "obvious no-brainer explanation" isn't the correct one.
- AlexandrB 6y ago
  This is a take that's wildly generous to FoxConn, painting them as the "aww schucks" kinda honest guys that just didn't know about the challenges of the US labor market. The alternate take is that the whole deal was made in bad faith and FoxConn was hoping to collect subsidies and line its pockets. This version of events has some precedent[1]. It's especially hard to believe that FoxConn didn't know about US labor when this same situation played out in Pennsylvania in 2013[2]. [1] https://www.marketwatch.com/story/foxconns-history-of-broken-promises-casts-a-shadow-on-wisconsin-news-2017-07-27 https://www.marketwatch.com/story/foxconns-history-of-broken... [2] https://www.washingtonpost.com/business/economy/how-foxconns-broken-pledges-in-pennsylvania-cast-doubt-on-trumps-jobs-plan/2017/03/03/0189f3de-ee3a-11e6-9973-c5efb7ccfb0d_story.html https://www.washingtonpost.com/business/economy/how-foxconns...
  - Loughla 6y ago
    You're 100% spot on. I cannot be convinced a multi-national mega-corp is ignorant of US labor and the challenges in the US labor market. There just is no way that's possible for a company this size, or am I wrong? So that leaves either bad faith, or they are just abjectly incompetent. I can't really see any other options. Or, again, am I way off base?
    - chrisjc 6y ago
      > I cannot be convinced a multi-national mega-corp is ignorant of US labor and the challenges in the US labor market. Especially one that is a specialist in harvesting laborers from all corners of the world. I can only imagine selecting the right labor force has to be their main competences.
    - jfb 6y ago
      I mean, it was bullshit from jump street, but if Wisconsin had poured (more) money into Foxconn's pockets, I'm sure they'd have been happy to put something up.
      - KZZ 6y ago
        For the record, they have put something up. Currently 1 large empty buildings and 2 medium sized, filled buildings. Also one perplexing glass globe.
al2o3cr 6y ago
Short story shorter: Terry Gou is a serial bullshitter https://www.theverge.com/21507966/foxconn-empty-factories-wisconsin-jobs-loophole-trump https://www.theverge.com/21507966/foxconn-empty-factories-wi...
Timshel 6y ago
Good article on the subject: https://www.theverge.com/21507966/foxconn-empty-factories-wisconsin-jobs-loophole-trump https://www.theverge.com/21507966/foxconn-empty-factories-wi... My take it was probably mainly a political stunt, lcd was never really possible (slump + wages + supply issues) and then they didn't know what to do.
sandworm101 6y ago
Politics. Political capital. There are international advantages to having the US president endorse you, your project and your company. Those photos were probably worth the hassle.
- deleted 6y ago
  [deleted]
- Frost1x 6y ago
  Not just the photos but the initial publicity. People remember the beginnings of things if they're broadcasted through mass media. I recall many people claiming this a 'big win' at the time and attributing to the sitting president. I recall also being highly skeptical and suspecting a political stunt but completely forgot about the status until reading this. Meanwhile, people at large don't follow progress of these endeavors. Some journalists may but there's selection bias from the journalist and the news consumer as to what they ultimately see and stay informed of. These stunts are forgotten by most (myself included) in the daily scramble of things we have to keep track of and manage. Did it fail? Did it succeed? Do I even remember it or just the emotion it attributed to something else I actually do remember? Ambiguity hiding in complexity of daily life lets people say and do a lot of things and get away with it. It's often far too difficult and time consuming to unravel the ambiguity and complexity to show if something succeded, failed, or to even have cognitive capacity to keep track of. The end result, as you point out, is political capital people walk away with. The emotional impression at the time is what was sold and stuck to most people. "MAGA", "bringing back manufacturering", links to nostalgic economic golden eras for many workers.
sct202 6y ago
Scott Walker, the governor, who signed the deal lost his office a year after it was signed in part due to backlash over the deal. Think about it from Foxconn's perspective, if you got a sweetheart deal and the person who gave it to you got canned for it, are you going to follow thru and put in billions of your dollars on the assumption that you'll still get billions of government subsidies in return?
- analog31 6y ago
  I wonder if it might have been water. They may have needed more than a sweetheart deal with the state. I think a big reason for the location was the water supply via Lake Michigan. They got a waiver of state environmental laws as part of the deal, but they still had to contend with federal laws, and a treaty with Canada that governs water use in the Great Lakes watershed. There was quite a controversy over the environmental impact of this plant. The "word on the street" is that LCD manufacturing is a dirty industry requiring a lot of water.
MomoXenosaga 6y ago
Realized Americans don't want to live in factory compounds for 10 months doing repetitive labour.
jerry1979 6y ago
I think it shows the idea that "Americans can't do business well", and historically, doing business well has been one thing that Americans pride themselves on. edit I should add that I believe that spreading that kind of message has geopolitical implications, and that groups might want to create that image for strategic reasons.
jcranmer 6y ago
From what I can tell, Foxconn never actually intended to build the plant. (I'm getting a lot of this from an interesting long-form article on the history of this deal; unfortunately, I don't remember where I found this article, sorry). Essentially, Foxconn thought that the Wisconsin deal would work more typically as its deals in China went. Glad-hand the government officials, get sweetheart deals on land and investment, and as long as you're not totally incompetent in making use of it, they won't care what you do with it, even if you fail to live up to the original promises. It's not clear to me that Foxconn actually seriously considered producing LCD screens here given this light; the announcement would have been more to make Walker and other government officials ecstatic about the deal than an actual commitment to follow through. The fact that outrage towards the deal would lead to Walker losing reelection and his successor keeping a much closer eye on performance (or lack thereof) seems to me to have caught Foxconn completely off-guard. I think there's another level going here in relation to internal Foxconn politics, but my recollection is too hazy to make a coherent explanation, and I don't want to make any false accusations here, so I won't go into any more detail.
- KZZ 6y ago
  For information, the plant has been built. The building is there, just empty.
  - aaaaaadsfscxva 6y ago
    Curious
    - aaaaaadsfscxva 6y ago
      en efecto
  - superkuh 6y ago
    Nope. The plant that was promised was never built. They did build some storage warehouses and started a propaganda program where they hired dozens to hundreds of locals to come in to the warehouses, sit around, and do nothing to appear like they were doing something.

pen2l 6y ago

In a nutshell, it mistook the nature of labor folks are used to here and its costs. Indeed wildly different from China and elsewhere.

1cvmask 6y ago
It’s funny that they are downvoting you for stating the obvious no-brainer explanation. Just curious as I am seeing more of this on HN lately or is it just the Baader Meinhof phenomenon after I read someone else complain about the recent downvoting phenomenon for stating the obvious. Has the readership changed of HN or more specifically the commentariat?
- pen2l 6y ago
  It wasn't really my take or opinion, I rather recalled it being cited as the reason by Foxconn itself in multiple instances. Also, I'm from Wisconsin, and an old EECS professor explained this to be the reason from his first-hand knowledge of some conversations with Foxconn. Here is one citation I was able to find quickly: https://www.reuters.com/article/us-foxconn-wisconsin-exclusive-idUSKCN1PO0FV https://www.reuters.com/article/us-foxconn-wisconsin-exclusi... He said the company was still evaluating options for Wisconsin, but cited the steep cost of making advanced TV screens in the United States, where labor expenses are comparatively high. “In terms of TV, we have no place in the U.S.,” he said in an interview. “We can’t compete.” Foxconn has factories in Mexico, Chennai, Malaysia etc. which produce a significant amount of devices but I doubt a factory in US will take off. This article from 2012 about the Steve Jobs "These jobs are not coming back" remark is probably still true: https://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html https://www.nytimes.com/2012/01/22/business/apple-america-an...
  - buran77 6y ago
    > I rather recalled it being cited as the reason by Foxconn itself in multiple instances. It's more plausible that any company will give the more acceptable, easily digestible explanation, rather than the real one. But really it's the politicians who won, first by banging their chests for all the investments and jobs they created, now for getting an easy out. They can't be blamed for not seeing through any ploy because they can argue Foxconn obviously had good intentions sabotaged by "a misunderstanding" that couldn't have been caught. It's very unlikely (by that I mean close to impossible) that Foxconn just "blundered", went through many rounds of negotiations, and started building, while genuinely not being aware that the US labor market is different from the Chinese one.
  - smt88 6y ago
    You're being downvoted likely because of how naive it sounds when you take what Foxconn says at face value. Large companies are unlikely to ever tell the truth about their motivations, but they're even less likely to when they were doing something manipulative and dishonest, as Foxconn was here.
  - CydeWeys 6y ago
    Your mistake here is taking a multinational corporation at its word, especially one known for playing games with subsidies in other countries too. These quotes are the cover story from corporate PR, not the truth.
  - LargeWu 6y ago
    The alternative is that Foxconn is lying, and they never had any intention of actually opening the factory, which I think is a far more likely explanation.
  - KZZ 6y ago
    The new approach is contract manufacturing for customers who are uncomfortable with manufacturing being performed in China, speaking from first-hand experience. This demand does exist and is what is going to be leveraged in the new park.
- Semaphor 6y ago
  > Has the readership changed of HN or more specifically the commentariat? My personal impression is, that it got a lot worse since Covid, which I attribute to more people doing home office and/or having more free time. Any discussion forum that grows gets worse. But both my impressions and the 2nd part might be wrong.
  - 1cvmask 6y ago
    I think you nailed it with Covid. Critical thinking requires discourse, and discourse on all the possibilities beyond the dominant narratives or paradigms. Downvoting does not make reality or the “ugly” truth go away. We should be here to discuss and not be afraid to ruffle feathers and have easily offended sensibilities.
    - sigmaprimus 6y ago
      Beat me to it!
  - sigmaprimus 6y ago
    Since You qualified your own statement as being possibly being wrong, I would argue that more engagement alone doesn't result in more down votes. I have observed that any comments criticizing anyone, regardless of wether they are justified or not seem to be recieved poorly on modern forums. I believe this is due to an ongoing effort to make forums safe spaces, somehow honest critical thinking is no longer accepted in the current environment. Right or wrong, it is what it is. So if You are really concerned with the fake points You are accumulating then just tow the line, get with the woke SJW movement or submit articles of interest to balance out the backlash from the mob....I probably better start looking for a good article :P
    - 1cvmask 6y ago
      And the downvotes on your comments begin....
      - sigmaprimus 6y ago
- Loughla 6y ago
  I genuinely don't understand how 'international mega-corporation doesn't understand international labor differences' is a no-brainer. Please explain that to me. That seems like one of the first things that any company should evaluate.
  - saalweachter 6y ago
    Honestly? I assume the people who negotiated the deal are a different department from the people who would have implemented the deal. They went big and went home and now it's someone else's problem.
- bildung 6y ago
  Is it really a no-brainer that a giant transnational company signed a multi-billion dollar deal without anyone investing half a day looking into the situation of the labor market of the target region?
- DaedPsyker 6y ago
  You say stating the obvious and yet it simply isn't. It was a heavily subsidised political stunt that Foxconn could half-ass. They rolled out the red carpet, exempted them from environmental regulations and basically built the infrastructure for them. Even four years ago they said the number of jobs was a wish not a promise, they were BS artists. They weren't some naive tiny company.
- rideontime 6y ago
  The downvotes might be coming from people who are actually familiar with the situation and know that the "obvious no-brainer explanation" isn't the correct one.
AlexandrB 6y ago
This is a take that's wildly generous to FoxConn, painting them as the "aww schucks" kinda honest guys that just didn't know about the challenges of the US labor market. The alternate take is that the whole deal was made in bad faith and FoxConn was hoping to collect subsidies and line its pockets. This version of events has some precedent[1]. It's especially hard to believe that FoxConn didn't know about US labor when this same situation played out in Pennsylvania in 2013[2]. [1] https://www.marketwatch.com/story/foxconns-history-of-broken-promises-casts-a-shadow-on-wisconsin-news-2017-07-27 https://www.marketwatch.com/story/foxconns-history-of-broken... [2] https://www.washingtonpost.com/business/economy/how-foxconns-broken-pledges-in-pennsylvania-cast-doubt-on-trumps-jobs-plan/2017/03/03/0189f3de-ee3a-11e6-9973-c5efb7ccfb0d_story.html https://www.washingtonpost.com/business/economy/how-foxconns...
- Loughla 6y ago
  You're 100% spot on. I cannot be convinced a multi-national mega-corp is ignorant of US labor and the challenges in the US labor market. There just is no way that's possible for a company this size, or am I wrong? So that leaves either bad faith, or they are just abjectly incompetent. I can't really see any other options. Or, again, am I way off base?
  - chrisjc 6y ago
    > I cannot be convinced a multi-national mega-corp is ignorant of US labor and the challenges in the US labor market. Especially one that is a specialist in harvesting laborers from all corners of the world. I can only imagine selecting the right labor force has to be their main competences.
  - jfb 6y ago
    I mean, it was bullshit from jump street, but if Wisconsin had poured (more) money into Foxconn's pockets, I'm sure they'd have been happy to put something up.
    - KZZ 6y ago
      For the record, they have put something up. Currently 1 large empty buildings and 2 medium sized, filled buildings. Also one perplexing glass globe.

al2o3cr 6y ago

Short story shorter: Terry Gou is a serial bullshitter https://www.theverge.com/21507966/foxconn-empty-factories-wisconsin-jobs-loophole-trump https://www.theverge.com/21507966/foxconn-empty-factories-wi...

Timshel 6y ago

Good article on the subject: https://www.theverge.com/21507966/foxconn-empty-factories-wisconsin-jobs-loophole-trump https://www.theverge.com/21507966/foxconn-empty-factories-wi... My take it was probably mainly a political stunt, lcd was never really possible (slump + wages + supply issues) and then they didn't know what to do.

sandworm101 6y ago

Politics. Political capital. There are international advantages to having the US president endorse you, your project and your company. Those photos were probably worth the hassle.

deleted 6y ago
[deleted]
Frost1x 6y ago
Not just the photos but the initial publicity. People remember the beginnings of things if they're broadcasted through mass media. I recall many people claiming this a 'big win' at the time and attributing to the sitting president. I recall also being highly skeptical and suspecting a political stunt but completely forgot about the status until reading this. Meanwhile, people at large don't follow progress of these endeavors. Some journalists may but there's selection bias from the journalist and the news consumer as to what they ultimately see and stay informed of. These stunts are forgotten by most (myself included) in the daily scramble of things we have to keep track of and manage. Did it fail? Did it succeed? Do I even remember it or just the emotion it attributed to something else I actually do remember? Ambiguity hiding in complexity of daily life lets people say and do a lot of things and get away with it. It's often far too difficult and time consuming to unravel the ambiguity and complexity to show if something succeded, failed, or to even have cognitive capacity to keep track of. The end result, as you point out, is political capital people walk away with. The emotional impression at the time is what was sold and stuck to most people. "MAGA", "bringing back manufacturering", links to nostalgic economic golden eras for many workers.

sct202 6y ago

Scott Walker, the governor, who signed the deal lost his office a year after it was signed in part due to backlash over the deal. Think about it from Foxconn's perspective, if you got a sweetheart deal and the person who gave it to you got canned for it, are you going to follow thru and put in billions of your dollars on the assumption that you'll still get billions of government subsidies in return?

analog31 6y ago
I wonder if it might have been water. They may have needed more than a sweetheart deal with the state. I think a big reason for the location was the water supply via Lake Michigan. They got a waiver of state environmental laws as part of the deal, but they still had to contend with federal laws, and a treaty with Canada that governs water use in the Great Lakes watershed. There was quite a controversy over the environmental impact of this plant. The "word on the street" is that LCD manufacturing is a dirty industry requiring a lot of water.

MomoXenosaga 6y ago

Realized Americans don't want to live in factory compounds for 10 months doing repetitive labour.

jerry1979 6y ago

I think it shows the idea that "Americans can't do business well", and historically, doing business well has been one thing that Americans pride themselves on. edit I should add that I believe that spreading that kind of message has geopolitical implications, and that groups might want to create that image for strategic reasons.

jcranmer 6y ago

From what I can tell, Foxconn never actually intended to build the plant. (I'm getting a lot of this from an interesting long-form article on the history of this deal; unfortunately, I don't remember where I found this article, sorry). Essentially, Foxconn thought that the Wisconsin deal would work more typically as its deals in China went. Glad-hand the government officials, get sweetheart deals on land and investment, and as long as you're not totally incompetent in making use of it, they won't care what you do with it, even if you fail to live up to the original promises. It's not clear to me that Foxconn actually seriously considered producing LCD screens here given this light; the announcement would have been more to make Walker and other government officials ecstatic about the deal than an actual commitment to follow through. The fact that outrage towards the deal would lead to Walker losing reelection and his successor keeping a much closer eye on performance (or lack thereof) seems to me to have caught Foxconn completely off-guard. I think there's another level going here in relation to internal Foxconn politics, but my recollection is too hazy to make a coherent explanation, and I don't want to make any false accusations here, so I won't go into any more detail.

KZZ 6y ago
For information, the plant has been built. The building is there, just empty.
- aaaaaadsfscxva 6y ago
  Curious
  - aaaaaadsfscxva 6y ago
    en efecto
- superkuh 6y ago
  Nope. The plant that was promised was never built. They did build some storage warehouses and started a propaganda program where they hired dozens to hundreds of locals to come in to the warehouses, sit around, and do nothing to appear like they were doing something.