«Eighteen months ago this was nothing more than a dirt field, and now it is one of the most advanced places you can see in the world. It's unbelievable, ”Donald Trump said last June 28 when the foundation stone was laid for what was to become the first liquid crystal television factory ever to open in the United States: a plant four times the size of Central Park, with jobs for 13,000 people, who was supposed to turn a small Wisconsin town into the center of a new “Silicon Valley”. All thanks to the investments of the Taiwanese Foxconn, the largest manufacturer of electronic devices in the world.
What Trump was facing last June, in reality, was still not much more than a ' huge expanse of land, on which almost a year later there are only a couple of warehouses in which 200 employees work. This is all that has materialized for now of a huge plan that in the meantime has become less huge, and which is beginning to be talked about with growing skepticism: because, among other things, it has meanwhile brought the small town of Mount Pleasant, to the Racine County, demolishing dozens of homes and borrowing $ 750 million.
It all started in April 2017, when Coleman Peiffer, director of Wisconsin's Department of Economic Development, received a phone call from Jared Kushner, Trump's son-in-law and senior adviser, among other things White House responsible for the Office of Development. Kushner presented him with Foxconn's proposal: a $ 10 billion investment to build an LCD TV factory in the state. It seems that the idea of building a new large factory in Mount Pleasant came to Trump himself, who had flown over the city in a helicopter a few months before returning from an election rally.
The project proposed by Foxconn was huge. It involved the construction of a production plant of 12 square kilometers (the size of Ilva in Taranto): a “tenth generation” structure in which large-screen liquid crystal televisions would be produced, starting from panels of 9 square meters. one, as in the world is done only in another place, in Japan. The facility would have employed 13,000 people including assemblers, warehouse workers, engineers and administrators, with guaranteed wages of $ 24 an hour – much more than the minimum wage – even for low-level contracts.
Furthermore, the gigantic plant would have been only the first step: the goal of the project – Foxconn said – was to transform one of the most economically depressed areas of Wisconsin into the new Silicon Valley, renamed for the occasion “Wisconn Valley Science and Technology Park” . In fact, around the factory of LCD screens, research and development laboratories in the fields of communication, information technology and nanotechnologies applied to medicine would have sprung up. What made the offer credible was the size of the proposer: Foxconn is a company group which, with a turnover of 170 billion dollars a year, is among the 50 largest groups in the world. The company manufactures some of the components and assembles some of the most popular high-tech products, including iPhones and Sharp TVs, and has facilities in China, Japan, India and Brazil.
The chosen location for the settlement, Mount Pleasant in Racine County had been one of the wealthiest towns in Wisconsin with a long industrial history until the 1970s and 1980s. It was an engineer from Racine who invented the garbage disposal, for example; two other engineers from Racine, in 1910, invented the first motor that worked on direct and alternating current and which revolutionized the household appliances sector. Also in Racine County is Johnson's headquarters, in a building designed between 1936 and 1939 by Frank Lloyd Wright and considered one of the earliest and most important examples of architecture for the tertiary sector. With the decline of the manufacturing industry in the 1980s – and even more seriously in the 1990s – the area then lost much of its wealth. Today Racine is one of the poorest places in Wisconsin.
However, the revival plan proposed by Foxconn had a very high price: as often happens for companies that decide to invest so much in one place, it provided a series of economic and bureaucratic concessions from local authorities. The state and the federal government should have had three billion dollars in public subsidies and would have had to guarantee a very tight deadline for the approval of the projects; the city of Racine should also have done its part, trying to remove all obstacles to the approval and implementation of the project.
The size of the project, who was behind it and the requests made to institutions became known, however, only after the plan for the new Silicon Valley had been approved: for months, all parties involved were required to be completely secret on everything. The mayor of Mount Pleasant, Dave Degroo, was invited to Japan to visit a factory similar to the one that should have been built in Mount Pleasant, but he could not report anything about the trip to his fellow citizens due to a secrecy agreement that had been made to him. sign from Foxconn. With the same secrecy Degroo, a staunch supporter of the project, had it approved by the Mount Pleasant institutions, amid many protests.
When the project was finally approved at all levels, the commitments for the state of Wisconsin had become the extension of Intestatale 94, to be carried out using 160 million euros of federal funds, the granting of a tax exemption of 150 million dollars and a subsidy of 2.9 billion dollars in credit. tax. Racine County would instead undertake to build all infrastructure networks. Even for Mount Pleasant the burdens were very high: with an average annual budget of about 20 million dollars, the town had requested funding for 750 million dollars to acquire all the land necessary for the installation of the plant and had begun to expropriate and demolish. the 75 private houses that hindered its construction. It was the largest public grant package ever approved in the United States for a foreign company. In Mount Pleasant, those who agreed had been paid for their properties at market prices and had been able to relocate; those who refused, or even just prevaricated, had suffered expropriations with urgent procedures communicated during the public assemblies which were held at the rate of one every two weeks, in a climate of growing anger and disbelief.
Although it began to have many opponents, especially in Mount Pleasant, the operation still seemed destined to become one of the symbols of the revival of the Midwest: the great internal region of the United States that once drove the country's economy, thanks to heavy industry and the manufacturing sector, and where some of the poorest places in the country are now located. In the last election, Midwestern voters were decisive in giving victory to Donald Trump, who for months had promised to bring big industries back to places like Wisconsin.
Trump himself had spent a lot for Foxconn's Mount Pleasant project. «To make such an incredible investment», said in July 2017, «the manager Gou shows great confidence in the future of the American economy. There is no better place in the world to build and do business. We have low taxes and we are cutting rules and restrictions: approvals and rejections will be quick. Plus we have clean air, clean water: we will do everything that needs to be done, and we will do it quickly. “
Everything seemed to start in the best possible way: the construction sites for the new plant were still in full swing when Foxconn, to speed up the times, had rented a building of 14 thousand square meters nearby, immediately called the “Experimental Training Center”. Here he had put a team of his own technicians to work to start the first production tests with a few dozen local employees. Within a few months, once the production chain had been run in and the construction of the new plant completed, mass hiring should have started. From that moment on, however, everything went wrong.
In January 2018 Foxconn announced that by the end of the year there would be only 178 full-time employees, compared to two thousand provided for by the conventions. In the same days Louis Woo, Terry Gou's special assistant, said that Foxconn was reconsidering its plans due to too high production costs in the United States. The issue seemed to settle after a phone call between Trump and Gou, who after speaking with the president had retraced his steps and confirmed the whole project in Mount Pleasant. After a few months, however, no concrete progress had been made for the construction of the new plant.
In May 2018 Bloomberg had published an article on Foxconn's intention to scale back investments, giving up building the promised tenth generation plant to focus on less advanced technologies, moving from the construction of large-screen televisions to that of smartphones and devices for the automotive sector. In August, in an interview given to Racine Journal Time, Woo added that the new plant would need far fewer workers than initially envisaged by the agreement (an agreement in which citizens, the city, the state and the government were already making great sacrifices).
According to Bloomberg and the Wall Street Journal, the delays accumulated so far were not due to accidents but would be part of an established business strategy: to promise a lot to get the maximum possible incentives and concessions and then, with agreements signed, resize and cut investments. In Brazil, for example, in 2011 the opening of a Foxconn plant was announced that would employ 100,000 workers. Today in that plant, writes IstoéDinhero, an important information weekly in São Paulo, about 50 people work in shifts, over three shifts. Something similar also happened in Pennsylvania, writes The Verge, where a plant that would have employed 500 workers never built. near Lake Michigan only part of the foundations have been laid, and of the more than two thousand employees whose hiring was scheduled for the end of 2019, only 200 people are at work: many of them with internship contracts paid around 14 dollars an hour , just over half of what was promised.
A report by the Wisconsin Legislative Fiscal Bureau, the agency called to verify the state's budgets (a sort of College of Auditors), he also argues that even if the project is completed as promised, the state and county will earn nothing in tax terms at least until 2042, due to the huge subsidies provided and the investments to be made. And this without considering the increase in expenses for primary services to be guaranteed in the event of an increase in the population (predictable, in case the factory begins to work at full capacity) and assuming that all the employees of the new plants are resident in Wisconsin. (and perhaps not in neighboring Illinois).
The situation is currently stalled. Construction of the factories is not progressing as it should have, and fewer and fewer people believe it will ever complete the initial project promised by Trump and Gou. In March, The Verge had visited the dozens of buildings Foxconn had bought across Wisconsin to locate the R&D centers under the initial project, and found that all but one of the buildings were empty. Even the one where people actually worked in Milwaukee was still very small; a portion of the space Foxconn bought had been leased to a financial services firm. A month after the article about the empty buildings was published, and after a denial by Foxconn, The Verge went back to check if anything had changed: but the buildings were still all empty.
The new governor of Wisconsin, Democrat Tony Ev ers, who took over from Republican Scott Walker, said he was very skeptical that 13,000 people would be hired; despite Foxconn's assurances, he said he wanted to maintain a “healthy skepticism” on the whole issue.
