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Foxconn, one of the world’s largest electronics manufacturers, unveiled plans Wednesday evening to build a new factory in southeastern Wisconsin, delivering a much-needed win for President Trump and Gov. Scott Walker.
In a ceremony at the White House, Foxconn Chairman Terry Gou announced his firm would invest $10 billion in the state of Wisconsin.
“We are confident that making American products will be a great success,” Gou said during a White House press conference. “We are also committed to creating great jobs for the American people.”
The plant — to be situated in House Speaker Paul Ryan’s district — will make flat-screen displays.
But there was confusion about how many jobs would be created. Walker said the investment would create 13,000 jobs, with an average pay of $53,000 plus benefits. But the company said it would be hiring 3,000 workers over four years — with the potential for further growth.
Trump was “personally” involved in the deal, a senior White House official said, but Foxconn ultimately chose Wisconsin for its workforce and infrastructure.
The high-profile announcement follows a pledge from Foxconn shortly after Trump was elected to invest at least $7 billion in the United States and create between 30,000 and 50,000 jobs.
If it follows through on that scale, Foxconn will become a major employer on par with Chrysler.
Gou visited the White House in April to discuss the potential expansion with Trump. Foxconn also met with Jared Kushner, Trump’s son-in-law and the White House’s innovations director.
The Taiwanese company, also known as Hon Hai Precision, employs about 1.2 million workers in factories across Europe, Asia and South America. It contracts with virtually every large technology company, including Apple, Amazon.com, Google, Intel, Microsoft and Nintendo, and made nearly $140 billion in revenue in 2015.
Walker (R), who faces reelection in 2018, hinted at the news in a tweet Tuesday, saying a “major jobs announcement” would be coming. A Marquette University Law School poll last month found that Walker has a 48 percent job-approval rating among the state’s voters.
Trump was also in need of a boost. His overall approval rating in July sat at 36 percent, down from 42 percent in April, according to a Washington Post-ABC News poll. More concerning for Trump, his approval ratings for his handling of the economy also showed signs of slippage for the first time this month.
Trump has also spoken of Foxconn’s growth in the U.S.
“Foxconn is going to spend a tremendous amount of money on building a massive plant,” Trump said last December, “and probably more than one.”
Foxconn has been talking to at least six states about its new factory. Wisconsin officials have said that they would consider legislative sweeteners to attract the company. Myranda Tanck, a spokeswoman for state Senate Majority Leader Scott Fitzgerald (R) said Monday: “The senator has said that if a bill is necessary to help facilitate a Foxconn location in Wisconsin, he is hopeful that it will take the form of bipartisan legislation that is tackled after the budget is passed.”
Foxconn’s move to Wisconsin — and the prospect of such sweeteners — were met with skepticism from Democratic leaders in the state.
“While I welcome new businesses to the state, I want to ensure any state-subsidized private sector jobs offer a living wage and safe working conditions,” the Senate Minority Leader Jennifer Shilling (D) said Wednesday. “The bottom line is this company has a concerning track record of big announcements with little follow through. Given the lack of details, I’m skeptical about this announcement and we will have to see if there is a legislative appetite for a $1 to $3 billion corporate welfare package.”
Ahead of the announcement, which was expected at 5 p.m. Eastern time, Foxconn referred questions from The Washington Post to a July 12 statement that said the manufacturer had not yet settled on an American site.
“We are exploring potential investments that would represent a major expansion of our current U.S. operations,” the company said in the statement. “We are engaged in discussions with officials at various levels of government regarding our ongoing plans to significantly increase our investments in the U.S.”
Foxconn is hardly a household name, because it mostly works as a contract manufacturer for tech giants. And in recent years, the company has earned a reputation for splashy job announcements that have not quite panned out.
In 2013, the company earned headlines for a plan to invest $30 million and hire 500 workers for a new high-tech factory in central Pennsylvania. The state’s governor boasted about the deal. Economists wrote think pieces explaining how this was the leading edge of a U.S. manufacturing renaissance.
But once the attention died down and the politicians moved on, Foxconn never followed through with its plans in Pennsylvania.
In 2014, the company signed a letter of intent to invest up to $1 billion in Indonesia. That investment has yet to occur. That same year, Foxconn said it planned to invest $5 billion over five years in India, creating 50,000 jobs. But three years later, Foxconn’s investment has amounted to only a small fraction of its original promise.
And there was Foxconn’s plans for a $5 billion investment in Vietnam and $10 billion in Brazil — both projects have fallen far short of expectations.
Foxconn also has a reputation for high-stress work environments.
In 2011, an explosion at one of the company’s Chinese factories killed three workers and injured 16. Dust caught in an air duct triggered the blast, the firm said at the time.
Reports surfaced in 2012, meanwhile, that Foxconn employees sometimes worked seven days a week and lived in cramped dorms. Some told reporters they stood for periods so long their legs would swell.
Foxconn responded by reducing worker overtime and installing a safety net to catch people who jumped from the building.