If Fisker ends up building electric vehicles with Foxconn Technology Group in Wisconsin, as seems likely, the stunning new development could make a huge winner out of what was an economic-development disaster — and put the state back into the business of making cars for the first time in 13 years.
Such a development also would continue a carve-out by Flyover Country of an increasingly significant role in the EV future of automotive transportation.
America’s slow transition to all-electric automobiles has been driven by the extreme anti-emissions dictates of the state government of California, and as it succeeds, this push continues to imperil jobs in our region from the fracking fields of the Great Plains to the engine plants of Michigan.
But the traditional home of America’s auto industry, the Midwest, has been pushing back, too. For example, the manufacturing linchpin of GM’s planned transition to all-electric light vehicles is a plant in Hamtramck, Michigan, straddling the border of Detroit. And one of the hottest EV startups, Rivian, will build its widely anticipated all-electric SUVs and pickup trucks in an abandoned Mitsubishi plant in Normal, Illinois.
Also to the broader region's credit, add Elon Musk's decision to put Tesla's next plant, for building pickup trucks, in Texas, spurning the San Francisco Bay Area where his company already makes autos in part because he doesn't get along with local governmental authorities.
That’s not to mention all the development work proceeding on EVs at Flyover Country facilities by the Detroit Three automakers as well as Toyota, Hyundai and others.
Right now, the focus is on Foxconn and Fisker. The world’s largest contract electronics manufacturer and a key assembler of iPhones for Apple, Foxconn has agreed to make cars for EV startup Fisker, and Fisker CEO Henrik Fisker told the Wall Street Journal that the vast site of Foxconn’s factory project in Wisconsin is “an obvious one” for making the cars.
“They’ve got a factory there and quite a lot of land with quite a lot of possibility for expansion,” Fisker told the newspaper, while saying that the new partners “haven’t made a final decision on that.”
As I just wrote for Forbes, Wisconsin once was a force in the automotive industry, joining with other states adjacent to the Great Lakes to help form the most formidable car-making belt in the world. But General Motors closed its assembly plant in Janesville, Wis., in 2008, after making automobiles there since 1923, and Chrysler closed an ancient assembly plant in Kenosha, Wis., in 1988, then shuttered its engine plant in Kenosha in 2010.
A Fisker EV-making plant in Mount Pleasant, Wisconsin, Foxconn’s site in the southeastern corner of the state, would marry in a spectacular way two enterprises that have been stumbling for a while. Los Angeles-based Fisker is the second EV startup founded by Fisker, whose first carmaking enterprise, Fisker Automotive, ended with selling its hard assets to China’s Wanxiang Group in 2014. Fisker’s new company plans to start production on its first vehicle, the Ocean electric SUV, by the end of next year.
Under terms of the new deal, Taipei-based Foxconn, formally known as Hon Hai Precision Industry Co., would jointly produce with Fisker 250,000 vehicles a year. The collaboration would be for Fisker’s second model, a planned, higher-volume electric car that the company aims to start building by the end of 2023. This model would be built on a platform developed by Foxconn and would be sold in North America, Europe, China and India. It would be the first actual manufacture of EVs by Foxconn.
And if it happened in Wisconsin, the EV production would rescue one of America’s highest-profile economic-development projects and help both Foxconn and the state of Wisconsin remove substantial egg from their faces.
Right now, Foxconn is negotiating with the Wisconsin Economic Development Corp. for new terms to the deal that originally brought it to the state. Foxconn’s planned LCD factory near tiny Mount Pleasant was supposed to bring a $10-billion investment by the company, create 13,000 jobs, and single-handedly transform the corner of the state into a digital-era manufacturing juggernaut that then-Governor Scott Walker ambitiously called Wisconn Valley.
The project was hailed by then-President Donald Trump, who helped break ground for the plant, and was regarded jealously by other governors and economic-development officials across the country as one of the biggest economic-development plums of the age.
But everything has gone downhill since the groundbreaking in 2018. Foxconn has kept scaling back its plans for the plant from an initial indication that the Wisconsin site would make screens for large TVs and monitors to an admission that it planned to make only small screens. Foxconn began failing to meet initial benchmarks for promised employment levels at the plant in exchange for the state’s agreement of $3 billion in subsidies. Allegations that Walker had given away the farm to a dubious partner helped sink his re-election bid in 2018.
So far, as construction to meet Foxconn’s lofty promises has lagged, the only thing the company has made in Wisconsin is masks to combat the coronavirus. Foxconn did have a deal to make ventilators for potential demand due to Covid-19, but the demand never materialized as ventilators fell out of favor for treating extreme cases of the disease by mid-2020. Lately, Foxconn executives have told the state that they’re willing to accept fewer tax credits “in exchange for flexibility” in how they use the site.