One day after a report that Foxconn was drastically rethinking its operation in southeastern Wisconsin, a Japan-based news outlet reported the tech giant is halting work on its planned $10 billion plant in southeastern Wisconsin and a second plant in China.
The Taiwanese-based company disputed the report, saying its plans were “unchanged.”
The Nikkei Asian Review reported Thursday that Foxconn will suspend work on the Racine County campus and postpone work on a $9 billion display panel project in Guangzhou, China, for at least six months.
The report, citing anonymous sources and documents, said Foxconn’s decision to suspend work on the two plants is because of “weakening macroeconomic conditions and the uncertainties brought by the trade war,” and in Wisconsin, “as a result of negotiations with new Gov. Tony Evers.”
The report said Evers approached Foxconn officials to “renegotiate some of the side deals his predecessor made with the company,” attributing to three anonymous sources.
But Foxconn and Wisconsin officials denied that Evers sought to make changes to the state’s contract with Foxconn.
Mark Hogan, CEO of the Wisconsin Economic Development Corp., said Evers never sought to re-negotiate any element of the Foxconn project. Hogan was appointed to his post by Gov. Scott Walker in September 2015.
“I have been involved with the Foxconn project from day one, and there never have been any side deals and the contract stands on its own,” Hogan said Thursday. “In addition, there have been no attempts by either the company or the Evers or Walker administrations to renegotiate WEDC’s contract.”
He said Evers and his administration “have done a very good job of reaching out to company officials and developing a relationship that will protect our taxpayers’ interests and at the same time give Foxconn the ability to be successful in Wisconsin.”
Further, Foxconn Technology Group released a statement saying it “remains committed to its long-term investment and creating 13,000 jobs in Wisconsin.”
“All interactions to date with Governor Evers and his team have been constructive and we look forward to further discussions as we continue to invest in American talent and broaden the base of our investment within the State of Wisconsin,” it said.
Foxconn on Thursday said while the company’s “need to be responsive to the global market environment has necessitated a reconsideration of which technology will best suit the needs of its customers, its commitment to the construction of the Wisconn Valley Science and Technology Park campus and the creation of 13,000 jobs in Wisconsin remain unchanged.”
In the next 18 months, the company said it plans to construct:
The Nikkei report said the company does not plan to abandon the Wisconsin project entirely, “only halt it for further evaluation and discussion with the new governor.”
Evers didn’t take questions from reporters Thursday after he briefly addressed a task force on transportation, but spokeswoman Melissa Baldauff tweeted “claims made today that @GovEvers has tried to renegotiate the Foxconn contract are false.”
President Donald Trump and former Gov. Scott Walker in 2018 attended the groundbreaking of Foxconn’s planned U.S. plant in Racine County. Trump predicted the campus would be the “eighth wonder of the world.”
Since then, staff from Sharp and Foxconn display subsidiary Innolux that were sent to Wisconsin to work on the project “have been recalled to Japan and Taiwan,” Nikkei reported.
A slump in Apple electronic sales is affecting the company’s growth, according to the report.
“Foxconn’s moves to hold up planned investments come after the company took cost-cutting steps that included shedding 100,000 workers by the end of 2018,” the report said. “The business climate is even chillier now that top customer Apple delivered a shocking revenue downgrade this month, citing slowing Chinese sales.”
The Nikkei report comes a day after Reuters reported Foxconn was radically rethinking its Racine County project. The report said it would scale back or drop completely the advanced liquid crystal display panels it planned to manufacture in favor of a research and engineering hub.
As it did Thursday, Foxconn responded by saying it remained committed to bringing thousands of jobs to the state as promised when Walker struck a deal with the company to build its first U.S. plant in Wisconsin. The deal included about $3 billion in taxpayer-funded subsidies.
Since lawmakers approved the subsidies in 2017, Foxconn has changed course several times. Last year, for example, it walked back its plans to build an LCD factory that would produce huge screens, opting instead for a less-costly plant that would make small panels for devices such as phones and tablets. The company also failed to create enough jobs in 2018 to qualify for state tax credits.
Nikkei Asian Review is part of Nikkei Inc. and is the leading business publication in Japan, with 3 million subscribers. It has 1,300 journalists in 37 bureaus around the world, according to its website. It also owns the Financial Times newspaper and oversees and calculates the Nikkei 225 stock index, Japan’s leading stock market index.
Potential changes to Foxconn’s plans in Wisconsin caused heartburn for Milwaukee city leaders.
On Thursday, Milwaukee Ald. Robert Bauman said city leaders were anticipating Foxconn providing jobs for low-skilled workers, not research jobs.
”Given that fact, I think we’re witnessing the greatest bait and switch that’s ever been perpetrated on the state of Wisconsin,” Bauman said.
”This was sold as a manufacturing job investment, and it appears there’s going to be no manufacturing jobs,” he said. “They could have done a research facility in the city of Milwaukee, in a high rise.”
Some Milton High School students have given shout-outs to @SuperinTIMdent on Twitter for their impromptu six-day weekend.
For those who don’t know, @SuperinTIMdent is Milton Superintendent Tim Schigur’s Twitter handle. Schigur said he finds the students’ manner of voicing approval for recent snow days amusing.
But he and other school district officials soon must determine how to make up class time lost during this frigid week, which was so cold it forced local schools to close and Gov. Tony Evers to declare a state of emergency.
The state Department of Public Instruction mandates that districts offer at least 437 hours of instruction for kindergartners, 1,050 hours for first through sixth grades and 1,137 hours for seventh through 12th grades per academic year.
Officials from several school districts weighed in on if and how their school calendars will be affected by the recent weather.
Patrick Gasper, public information officer for the Janesville School District, said officials are considering their options.
Officials have closed schools five days this year for weather, four of which were this week.
The district can miss up to two school days without violating the state’s hours requirement. Officials need to think of a plan for the other three days missed so far and more missed days that could come, Gasper said.
School now will be in session May 24, a day that was reserved as a makeup day, Gasper said.
The district has not yet decided how to make up the remaining days, but it has options, he said. They include adding extra school days in June, adding more time to existing school days, or changing teacher planning days to instructional days.
About 10 years ago, the Janesville district held classes on a Saturday to make up for missed school days, but Gasper said that was not well-received and likely won’t happen again.
Officials likely will wait until spring to make final decisions, Gasper said.
Milton School District officials are holding off on final decisions about makeup days for a couple of reasons, said Schigur, the superintendent.
First, Evers could exempt districts from making up class time during the state of emergency. Schigur said he hopes the state will “recognize the uniqueness” of this week and grant an exemption.
In addition, Wisconsin winters are unpredictable, and the possibility of more cancellations exists for another month or so, Schigur said.
Like Janesville, the Milton district could add school days in June or extra minutes to the day to make up time, he said.
Evansville Superintendent Jerry Roth said no makeup plans are set in stone yet.
Evansville was one of few school districts that held classes Tuesday. It has closed schools only four days this year, Roth said.
In recent years, the district has added extra minutes to the school day to counteract days off, and it likely will do so again this year, he said.
However, a final decision won’t be made until March or early April, when school cancellations are less likely.
Superintendent Dennis McCarthy said the district will use Feb. 22 and April 22 as makeup days, pending school board approval Feb. 11.
“We have adequate hours built into our schedule as a whole, and this will allow us to continue to have a buffer in case up to two additional days are needed, without further adjustment,” McCarthy wrote in an email.
Beloit Turner has longer school days—7.5 hours—than many school districts, which gives the district more wiggle room, he said.
Superintendent Jim Brewer is meeting with district officials today to plan for makeup days, he wrote in an email.
The Gazette was unable to reach Edgerton Superintendent Dennis Pauli for comment before press time.
Doris “Dorrie” (Busse) Alff
Maurice A. Charbonneau
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The state of the city is cold.
The frigid weather has been all-consuming this week, and it permeated the opening line of Janesville City Manager Mark Freitag’s State of the City address Thursday night inside the council chambers.
With the impromptu weather report out of the way, Freitag launched into a roughly 45-minute-long speech that lauded the accomplishments of 2018 and described the work to be done in 2019.
His remarks followed a similar theme to last year’s address. Janesville continues to make progress despite persistent challenges—some of which are out of the city’s control—and can look forward to more growth in 2019, he said.
Perhaps the biggest piece of new information came after the presentation. Freitag told reporters that the city’s homelessness task force is considering a plan to provide a parking lot for those who live in their cars.
The lot would have restrooms and security. The task force hopes to make the idea a reality by May, he said.
In his speech, Freitag highlighted downtown revival as one of the city’s strengths, which was no surprise given the projects completed in 2018.
Last year, Janesville opened the ARISE Town Square and the adjacent festival street downtown. A local artist unveiled a new postcard mural at the end of a revitalized Doty Mill Alley near the town square, and construction crews began demolishing the Milwaukee Street bridge to clear the way for a replacement.
Freitag also directed praise inward.
He applauded city staff, especially those who work outside, for continuing to do their jobs despite low temperatures. He presented two employees—Deputy City Manager Ryan McCue and Management Information Specialist Molly Nolte—with “coins of excellence” for the work they did in 2018.
While much of the address was optimistic and upbeat, Freitag did bemoan state-imposed revenue caps and a shared revenue system the city manager said shortchanges Janesville in comparison to other cities of similar size. City leaders would continue to lobby state legislators to modify the policies, which have been in place for years, he said.
Lobbying for change is about all Janesville can do. Those issues represent the “erosion of local control,” he said.
Freitag turned his attention to the future as he closed his speech. Upcoming projects include the installation of a pedestrian bridge over the Rock River between Milwaukee and Court streets, restoration of the river’s shoreline near the former Monterey Dam site, and completion of the Milwaukee Street bridge.
He also issued a call to action to the public.
Freitag revealed a new campaign called Park Place Pickup, an effort to encourage residents to pick up trash when they see it. Doing so is a simple way to help beautify the city, he said.
Janesville will roll out the initiative soon, Freitag said.
Maybe by then the weather will no longer be conversation worthy.