A former Foxconn executive tries to explain what went wrong in Wisconsin | Hacker News Reader

A former Foxconn executive tries to explain what went wrong in Wisconsin

theverge.com

35 pointstosh10 comments

This is such a fascinating interview. The transcript is comedy to read. I'm really surprised this Alan Yeung guy agreed to do the interview, but I guess any promotion is better than no promotion when pushing a new book?

> NP: We don’t even have any questions about tax credit. I am just trying to get to the heart of why you signed up to build a Gen 10.5 factory in Wisconsin, which is a famous cocktail-napkin contract with Scott Walker. All of this other stuff seems like a distraction from that project. Now you are saying you do not think there is a talent base in Wisconsin alone, and you have to bring engineers into short-term housing from all these cities around Wisconsin to help grow a talent base. This entire book is about wining and dining with politicians, getting the deal together, and whether Scott Walker arrives in China and goes straight on the factory tour or stops at the hotel first. Nowhere in this book is there an economic defense of this investment that says, “This is a good idea that we think will return a profit to us.”

> AY: Let me come back to you with a couple things. There were no napkins, okay? The one thing that you published, based on an open record request, is actually what I wrote about in the book. There is a piece of stationery that both Chairman Gou and Governor Walker signed, to make a commitment to reshore manufacturing — that is a fact — but there is no napkin and all that.

> NP: I will concede that there is not a napkin.

It's almost as if the front fell off of the deal, and the interview is just a continuation of the skit. Wow.

It was the dome discussion that did it for me.

> JD: The dome in Mount Pleasant, the glass orb that Foxconn built, what is inside of it?

> AY: I think there are data center capabilities, including equipment and servers.

> NP: In the dome?

> AY: Oh, you’ve never been there? There are a lot of people who have actually gone through the tour.

> NP: Okay, but what is in the actual glass dome?

> AY: I cannot tell you what it is now, but to the best of my knowledge from back then, it is their data center capabilities. Everything that Foxconn did there on campus inside the dome is pioneering work. As our chairman Young Liu said, we did all this based on business, not politics. If the scale for the data center equipment and some of the work that they would do is pioneering, they probably would not tell you. A lot of that is actually in partnership with some of the biggest names within the data center world and they may not carry the Foxconn label when it becomes commercialized. I can assure you that the dome is needed.

> NP: The dome is needed to do pioneering data center work?

> AY: The dome should have been better and bigger. Okay?

> NP: I agree. If anyone says to me that a dome should be bigger, I always agree with them. That is true.

> The transcript is comedy to read.

You really were not kidding. The first question related to the book:

> NP: Josh and I covered this project extensively at The Verge the whole time, and we have both read the book. If you just read this book cover to cover, you would end fully believing that there is a Generation 10.5 LCD factory in southeastern Wisconsin. There is not a factory. What happened?

That almost seems like it would take practice to say with a straight face.

Cue question two:

> There is no factory. Why not address that in the book?

Because he immediately tried to change the subject. The argument given as an answer to the first question seems to try to suggest that the story told in the book was only intended to go through 2017, which seems like nonsense for a non-fiction book that was published years later than that (written in the last year and a half, no less!) - in particular when there are relevant updates to be given, like that the deal never actually happened.

I enjoyed that the hosts got progressively more pointed in their questioning as it became abundantly clear that he was full of BS.

Overall: outstanding company man, even though he doesn't work for them anymore! At no point would he even entertain the idea that Foxconn did anything wrong. I also love that he placed all the blame on the current governor, and when they pointed out that this project was a bust long before the election of the current governor he switched to blaming the voters for getting upset right away. This guy has a future in the corporate world once he gets tired of "teaching innovation" to the unqualified future workforce of Wisconsin (his words, not mine).

> I understand you have a next book, but you have to answer this question. There is not a Gen 6 fab. There is not a Gen 10.5 fab. There is not a factory that is making anything that is known to anyone, as far as we can tell. If you had just said, “We are going to make a Gen 6 fab,” I think everyone would have been like, “Okay, where is it?” There isn’t one. The idea that it is the Evers administration, that business climate changed, or that Wisconsin was the wrong choice — which is what you are suggesting right now — that is all on Foxconn. If you chose wrong and should have chosen Ohio because of politics, it is still on Foxconn. If you decided 10.5 was not going to work out and Gen 6 was better, and you could not convince the Evers administration that you were actually going to build an LCD factory. What we have heard from that administration is that you never engaged or told them anything. So where is the accountability here for there not being a factory?

It sounds like the interviewer has already decided what the right answer is. And not to defend Yeung here, but the argument here is pretty asinine. A new administration came in and killed the deal - and it's their fault for not anticipating this? Is he on trial for both helping make the deal and letting it fail?

You can go back and read the historical reporting on this.

I think the point is that the Evers administration didn't kill anything, they issued a death certificate for something that had been laying by the side of the road for a really long time. They felt for a pulse, they poked it with a stick, they threw a bucket of water on it. And finally said, "Yep, it's dead"

Tax incentives and corporate subsidies like the ones given to Foxconn are a joke. Corporations usually face zero consequences for violating the terms of these agreements and taxpayers almost never get their money back or get the jobs they were promised. This was just really expensive PR for Foxconn, Scott Walker, and Trump.

This is nothing new, and it's been going on for decades. And the corporations that receive these benefits usually do not need them.

This is a very weird and directionless interview. The interviewer seems to talk more than the interviewee - but the core seems to be here:

> In the global sense, Chinese manufacturers were flooding the market with big panels because they have a lot of Gen 10.5 — or maybe even a Gen 11 — fabs coming on stream. A lot of those products were shipped based on tremendous amounts of support and subsidies within mainland China. Even the Foxconn fab in southern China had a tough time competing.

> The business environment and investment climate changed a lot in Wisconsin, partly because we did have a change of leadership within the governor’s mansion. That is not the entire reason, but it is a big chunk of it. If you remember, there were a lot of collaborations between Governor Walker and the administration with the company called Foxconn.

TL;DR: Wisconsin couldn't outspend and out-currency-manipulate China to subsidize manufacturing, and a signed deal means nothing if no one wants to go through with it.

Everyone is familiar with Russian manipulation and cooperation with Donald Trump; there are arguments about its true extent, efficacy, etc.

This was the Chinese version.

If you know about back-end semiconductor processing, operating a TFT-LCD plant in America was absurd from the get-go, and no one knew it better than Foxconn.

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