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March 05, 2017

Skepticism hangs over rumored Foxconn factory in Pennsylvania

One of the single greatest factors in President Donald Trump's victory in Pennsylvania last November was his persistent campaign pledge to serve blue-collar workers and breathe new life into the nation's manufacturing base.

It's a familiar theme in presidential campaigns, but one that had a particularly dramatic effect on the outcome of the 2016 election, whose dark horse issue in Pennsylvania was the scuttled Trans-Pacific Partnership and its potential impact on the state's industrial labor force. 

Days after Trump's inauguration, an intriguing report from Bloomberg hinted that Taiwan-based Foxconn, a major global assembler of iPhones and other electronics, was strongly considering building a $7 billion display factory in the United States, with Pennsylvania as the leading contender

If it moves forward, the factory could create between 30,000-50,000 jobs, Foxconn CEO Terry Gou said.

The only problem with this boon for the American worker is that a similar proclamation surfaced in Nov. 2013 and nothing wound up happening. Foxconn's flagship company, Hon Hai Precision Industry Co., was supposed to invest $40 million over a two-year period for a telecommunications component factory in Harrisburg and robotics research funding at Carnegie Mellon University. The plan, and the 500 jobs it promised, seemingly vanished.

Pennsylvania's head start with Foxconn stems from an existing office in Harrisburg that employs about 50 people in a region considered a computer industry and innovation hub. Reports that surfaced after Gou's January remarks suggested that economic development executives with Governor Tom Wolf were already in contact with Foxconn and that the state will continue to work with the company on its future plans.

But even as the Lehigh Valley jumped to express interest in the project, Gou told The Times Union that the Foxconn is "conducting an evaluation of the conditions and potential locations for establishing manufacturing facilities in the U.S.," inviting competition from other states in a separate interview with Agence France Press.

A report last Friday in The Washington Post advises a healthy dose of skepticism moving forward, especially given Foxconn's track record of lofty investment promises. Apart from the Pennsylvania report in 2013, similar pledges in recent years have not materialized as advertised in countries including India, Vietnam and Indonesia.

The Post's recent visit to Foxconn's Harrisburg office was met with workers who provided no help or insight on the company's plans. It's possible that Gou's original intentions in Harrisburg were to drum up support for the TPP. Two days after Gou's January announcement this year, President Trump formally began the work of dismantling U.S. participation in the trade pact.

If history is any indication, Foxconn's timeline for potential investment in the United States will likely be a long one. The company's priorities may change, yet the buzz of a massive factory in the making still gives a nice shot of legitimacy to claims that the climate for manufacturing investment in the United States is looking up.

This time around, officials in Harrisburg will likely know better than to get their hopes too high too soon.