A published Bloomberg News report syndicated by the South China Morning Post indicates that global contract manufacturer Foxconn Founder Terry Gou has pledged to kick-start the opening of previously announced U.S. based production facility located in the state of Wisconsin.
Gou, who failed to win political party nomination to run in the Taiwan Presidential election, now seeks to have the facility up and running sometime this year. According to the report, Gou anticipates that the facility will be focused on manufacturing components related to 5G technology enabled mobile systems and artificial intelligence applications, reportedly without further elaboration.
In January 2017, international and U.S. business media began reporting that Foxconn was considering investing $7 billion to build an advanced flat-panel LCD screen factory in the United States. The plant would have reportedly be associated with the contract manufacturer’s ownership of television manufacturer Sharp.
In July of that year, Foxconn made its formal announcement at a White House ceremony, with the selection of Wisconsin as the location of the new facility. The company’s founder and then chairman Terry Gou, had personally led the negotiations for the facility and joined President Trump in the announcement. The then proposed new $10 billion factory, was to be located and built in Southwest Wisconsin and represented an initial investment designed to rebuild a high-tech electronics supply chain within the United States. According to reports at the time, the Wisconsin plant would employ upwards of 3000 people initially and as many as 13,000 people at peak capacity.
Since that time, plans and associated commitments have sown confusion and little progress. This latest report validates that at one point, the globe’s largest contract manufacturer toyed with the idea of scaling back on the production complex, along with the commitment to employ the 13,000 workers. The manufacturer missed the stated first-year hiring milestone by 82 percent.
Our Supply Chain Matters update in late April 2019 provided for our readers the notions of a far different set of scenarios not likely to be able to match the original commitments.
Added Supply Chain Matters Thoughts
It would appear that Gou, who is no longer the company’s Chairperson, nor CEO, would have added time on his hands, thus his commitment to make good on his pledge to make the Wisconsin facility somewhat pertinent.
The report quotes Gou as urging ”.. many existing Hon Hai (Foxconn parent) colleagues to work in the U.S. to help boost manufacturing and build a (high-tech and consumer electronics) supply chain.”
That would imply he could only influence talent to come to the United States. Then again, he likely has many tentacles within the company he founded 45 year ago.
While the news could be considered hopeful, Foxconn’s track record relative to prior stated commitments should remain suspect. The lack of product and manufacturing specifics do not lend toward having a live operational presence this year.
Then again, this is Terry Gou, who has consistently demonstrated leadership to accommodate many of Apple’s last-minute iPhone product or process decisions or steep manufacturing ramp-up challenges. Gou is also the consummate politician, able to navigate political landscapes across China, as well as being a cited friend to President Trump.
Gou’s presence in the U.S. thus affords existing Hon Hai management less distractions in having to accommodate the Trump Administration’s re-election needs to have some substance to the Wisconsin announcement.
Meanwhile, Hon Hai’s client needs for alternative high tech and consumer manufacturing capabilities outside of China remain an objective.
From our lens, whether that includes the United States remains a very open question.
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