Foxconn’s change of plans undercuts Trump’s promises
President Donald Trump went quiet on Wednesday as a deal that would have delivered thousands of new US manufacturing jobs — and for which he took credit — began to crumble.
Taiwanese electronics giant Foxconn said it is looking at rewiring plans to invest $10 billion in a high-tech manufacturing plant in Wisconsin. Instead of hiring the blue-collar workers Trump promised to put back to work, Foxconn is now instead planning to recruit researchers, designers and engineers into a “technology hub” rather than opening a factory — a move that caught state officials off guard.
The shift leaves the project a shadow of the shining example of revived US manufacturing that Trump once made it out to be. Trump’s silence on the matter was a marked change from the public call-outs and pitched battles he has engaged in to revive a manufacturing industry that is unlikely to ever roar back to its former heights.
While Trump himself didn’t comment on the Foxconn news, a White House official said, “The President has created one of the strongest business climates in American history because he lowered taxes and massively cut regulations — and while it’s encouraging Foxconn will bring 13,000 new jobs and billions of dollars to Wisconsin, we would be disappointed by (any) reductions to the initial investment.”
It’s not the first time that Trump’s attempts to drive new manufacturing jobs have backfired. Several companies the President has claimed to have haggled into retaining or growing their manufacturing workforce have failed to follow through, or abided by the terms while cutting jobs elsewhere in the US.
After he claimed to have saved more than 1,000 jobs at a Carrier factory in Indiana, workers there thought Trump had saved all the jobs at the factory. While Carrier forestalled its plans to shutter the factory, Trump was lumping in administrative jobs the company had not planned to eliminate. And Carrier ultimately fired more than 500 factory workers within the first year of Trump’s presidency.
And while Trump touted General Motors’ plans in early 2017 to create or retain more than a thousand manufacturing jobs, he was stung last fall when the manufacturing giant announced plans to cut nearly 15,000 jobs, and reacted by publicly calling out CEO Mary Barra over the decision.
At other times, Trump has sought to take credit for factory openings and investments that were already slated before he became president. That was the case when Ford announced a $1.2 billion investment in Michigan — a move that matched up to an agreement the company made with the auto workers union.
Speaking in Mt. Pleasant, Wisconsin last summer at the groundbreaking ceremony for Foxconn’s new multi-billion dollar high-tech manufacturing plant, Trump couldn’t help but tout his personal involvement in bringing the project to life.
“I had this incredible company going to invest someplace in the world — not here necessarily. And I will tell you they wouldn’t have done it here, except that I became President, so that’s good,” Trump said, dating his involvement back to his time as President-elect. “I immediately thought of the state of Wisconsin.”
And as he touted the Foxconn project as “one part of the exciting story that is playing out across our nation” and the “eighth wonder of the world,” he turned his focus to knocking an American company — Harley-Davidson — for announcing plans to shift its production abroad.
“Harley-Davidson, please build those beautiful motorcycles in the USA, please. Okay? Don’t get cute with us. Don’t get cute,” Trump warned.
Trump has frequently used the pageantry of the White House to take credit for corporate investments — even when he had nothing to do with the deal. Early in his term, Trump welcomed Intel’s then-CEO Brian Krzanich to tout a $7 billion investment, even though Intel first announced the plans in 2011.
While Foxconn was attracted with a $4 billion tax incentive plan that came from local and state authorities, then-Wisconsin Gov. Scott Walker credited Trump with having “got the ball rolling” and said, “Foxconn would not be in America if not for you.”
“And your team, your team in the White House — Jared (Kushner), your Cabinet, everybody — was just hands-on-deck, great team effort here,” Walker told Trump at the 2018 groundbreaking.
The groundbreaking ceremony came a year after Trump invited Foxconn chairman Terry Gou to the White House to announce the $10 billion investment, which Trump heralded as “the return of LCD electronics and electronic manufacturing to the United States, the country that we love.”
“That’s where we want our jobs,” Trump said.
But even as Foxconn indicates it won’t follow through with plans to manufacture LCD screens in Wisconsin, manufacturing does appear to be on the upswing as a whole, at least in terms of jobs growth in the sector.
The manufacturing sector added 284,000 jobs last year — the best annual net gain since 1997. In 2017, the sector added 207,000 jobs.
Still, despite the gains, the US manufacturing industry remains a shadow of its former self, representing just 11.6% of the US’s GDP in 2017, a decline from 2011 when the industry began seeing net jobs growth again following the recession.
But while Trump repeatedly promoted the Foxconn project, he kept quiet on Wednesday as the project’s prospects shifted.
Wisconsin’s state government, for its part, said it was blindsided by the announcement.
“We were surprised to learn about this development,” Wisconsin Department of Administration’s secretary-designee Joel Brennan said in a statement.