Foxconn: Putting the ‘con’ in Wisconsin

From ToxicLeaks

Foxconn corporate history[edit | edit source]

If you own an iPhone or an Xbox, you probably own a Foxconn product. Estimates have shown that the Taiwan-based firm, officially known as Hon Hai Precision Industry, has a manufacturing role in some 40 percent of the world’s electronics products, and was ranked No. 27 on the Fortune Global 500 2017 list – between Amazon and China Construction Bank, for comparison. The world’s largest contract electronics manufacturer employees 726,772 people, many of them in China where the sprawling “Foxconn City” in Shenzhen supplies Apple, but also in the Czech Republic and other countries including the United States.

Hon Hai saw USD$4.6 billion in profits in 2017, but that value for shareholders comes at a cost to the environment and worker rights. The company’s record in China, where it once installed nets to prevent a growing number of employee suicides, is raising concern as it plans new U.S. operations in Wisconsin.

The Foxconn Wisconsin deal[edit | edit source]

In a Midwest region that’s shed thousands of manufacturing jobs – the story of Janesville being one of many – the Wisconsin Economic Development Corporation welcomed the news that Foxconn might select a site that promises 13,000 high-paying jobs and 22,000 more in the supply chain and surrounding communities. The sprawling Foxconn facility, three times the size of the Pentagon on a 20 million square foot campus, also would add a projected 16,000 jobs during construction in the town of Mount Pleasant.

That’s near Racine, north of Chicago along Lake Michigan, and those jobs – along with USD$7billion in annual economic returns and millions in tax revenues – sold government officials on the need to offer incentives. Wisconsin officials offered Foxconn the priciest package in U.S. history, which by May 2018 had been revised upward to $4.5 billion to include the cost of a highway designed for self-driving trucks serving the LCD screen plant. That’s millions annually in tax moneys projected through at least 2043.

It’s a political plum for Republican Gov. Scott Walker, who promised Wisconsin 250,000 jobs during a campaign that has yet to deliver the goods. It is a pet project in the home district of GOP Sen. Paul Ryan, the U.S. Speaker of the House who rolled out the Foxconn deal alongside U.S. President Donald Trump in 2017 yet later announced he would not seek re-election. It may even be a good deal for some Wisconsin workers – although only 3,000 of those jobs will come online to begin with, and fears over the Foxconn track record of broken pledges while seeking deep concessions loom large. So do plans to advance plant automation: In December 2017, Foxconn announced a new partnership for AI and machine learning.

Nearly half of Wisconsin residents disapprove of the costly deal, but the price tag doesn’t stop with the years of debt service, or the $120 million utilities upgrade paid for by rate payers, or the $600 million concessions demanded by Corning – a necessary glassmaker whose nearby location is integral to the deal. Now 62 percent of Wisconsinites are concerned about Foxconn’s impact on water and air quality.

Lake Michigan and water impacts[edit | edit source]

Eight American states including Wisconsin are part of the Great Lakes Compact Council, which also works with regional Canadian authorities. It was approved by U.S. Congress in 2008 to protect the freshwater lakes of the Midwest and ensure a ban on water diversions with limited exceptions. The compact was designed to ensure economic development aligns with sustainable use of water resources.

Lake Michigan is part of the system, which accounts for 84 percent of North America’s surface fresh water and 21 percent of the global supply, according to the U.S. Environmental Protection Agency. It serves 30 million people, nearly 25 percent of Canada’s and 7 percent of U.S. agricultural production.

Recent years have seen increased concern for conserving the lake’s 4,860 cubic kilometers in water volume, which is used by municipal water systems including the City of Chicago, Indiana steel mills, Michigan nuclear power facilities and others. In April 2018, Foxconn was added to those users when Wisconsin officials approved the City of Racine’s application to use an average 7 million gallons per day and divert it inland to the Foxconn plant. Almost 40 percent will be used in LCD screen processing and never return. No one yet knows what contaminants may be in the 61 percent that goes back to the lake.

Environmental activists with Clean Wisconsin dispute the Foxconn water diversion because it provides public water for private gain in violation of the intent of the Great Lakes Compact. Neighboring states including Michigan, Illinois and New York have raised concerns, as have the mayors of the Great Lakes and St. Lawrence Cities Initiative – a group of 125 cities that say Foxconn may violate the diversion ban.

A political pass on air pollution[edit | edit source]

If concerns over Great Lakes water weren’t enough, EPA head Scott Pruitt overruled his own staff and on May 1 exempted the Wisconsin location for Foxconn operations from tougher air quality restrictions. He also exempted certain counties in the Chicago area and around Lake Michigan into northwest Indiana.

The EPA report Scott disregarded would require Foxconn and other industrial sources of smog pollution to install more effective pollution-control equipment, scale back production or buy into regional deals for emissions trading. Foxconn has a notorious environmental record, particularly in China where it refuses to comply with permitting and in March 2017 refused to allow access to Chinese inspectors.

In Wisconsin, officials issued exemptions including wetlands protections and will not require Foxconn to file an environmental impact statement. Oddly, under Wisconsin law, Foxconn cannot sell its desktop computer products in the state because it is not compliant with a 2009 registration and e-recycling requirement. As of April 27, 2018, Foxconn remained on a do-not-sell list maintained by the Department of Natural Resources – the same agency that waived regulations to support a far too risky Foxconn deal.