Yeah, about that...
Foxconn Technology Group, the biggest assembler of iPhones, became the latest Apple Inc. supplier to warn of anemic demand, with an internal memo suggesting that expenses will be cut by almost a half next year.Oh? You mean they're going to cut the "non-technical staff" that would be manufacturing LCD screens? Like the type they're supposed to make in Racine County?
The contract manufacturer aims to cut 20 billion yuan ($2.9 billion) from expenses in 2019 as it faces “a very difficult and competitive year,” according to an internal document obtained by Bloomberg. The company’s spending in the past 12 months is about NT$206 billion ($6.7 billion). The shares of Hon Hai Precision Industry Co., as Foxconn is known in Taiwan and Asia, rose less than 1 percent in early trade in Taipei on Thursday.
“The review being carried out by our team this year is no different than similar exercises carried out in past years,” Foxconn said in an emailed statement in response to Bloomberg queries. It’s designed to ensure the company’s teams and budgets “are aligned with the current and anticipated needs of our customers, our global operations and the market and economic challenges of the next year or two.”
Foxconn’s iPhone business will need to reduce expenses by 6 billion yuan next year and the company plans to eliminate about 10 percent of non-technical staff, according to the memo. The moves are likely to add to the gloom enveloping Apple and suppliers for the iPhone, its most important product. Just last week, four suppliers on three continents cut their revenue estimates because of weak demand. That set off a rout in technology stocks that has spread to the broader market in recent days.
Meanwhile, Wisconsin taxpayers are putting up 15% of the costs to build this.
Exterior is nearing completion at the Foxconn Admin building, the first structure to go up. pic.twitter.com/i0MMU1mM6x
— Foxconn Aerials (@FoxconnAerials) November 19, 2018
At this point, aren't we better off just giving Foxconn $100 million (instead of paying $490 million for this boondoggle in the next budget), letting them sell that building, and then telling them to go away? Isn't that better for everyone at this point?
Everyone is better off except Pleasant Prairie. They fell for this hook line and sinker.
ReplyDeleteThere's a lot to dislike about this arrangement, and the benefits are way too far out for any reasonable presumption of return on investment. That's before we discuss pollution and lake water usage.
ReplyDeleteWalker was looking for the big play - the one that would really cement his legacy. For better (or more likely worse) I think he got it.