Unnamed sources are telling reporters that China-based Foxconn, a key supplier for Apple, is considering building a factory in the U.S. However, many industry observers are skeptical about the reports.
Ninelu Tu and Joseph Tsai from Digitimes first broke the story, writing, “Foxconn Electronics (Hon Hai Precision Industry) reportedly plans to establish manufacturing plants in the US and is currently conducting evaluations in cities such as Detroit and Los Angeles, according to market watchers. Since the manufacturing of Apple’s products is rather complicated, the market watchers expect the rumored plants to focus on LCD TV production, which can be highly automated and easier.”
Eric Savitz from Forbes explained, “The story notes that Foxconn chairman Terry Guo noted at a recent event that the company is planning a training program for U.S.-based engineers, bringing them to Taiwan or China to take part in the processes of product design and manufacturing.” He added, “The story says Foxconn is in discussion with Massachusetts Institute of Technology over such a program.”
But CNET’s Don Reisinger cautioned, “Of course, this story should be taken with a hefty heaping of salt. For one thing, it’s not clear what market watchers are or why they would have knowledge of Foxconn’s plans. In addition, the company has been able to establish itself as a leading producer of goods by capitalizing on the cheap wages workers in China command. By coming to the U.S., Foxconn would effectively change its business model.”
Business Insider’s Jay Yarow observed, “Foxconn is notorious for manufacturing iPads and iPhones in bad working conditions. It has been the target of numerous investigative reports from Wired, The New York Times, PRI, and ABC, to name a few. It has also been a PR-issue for Apple, which has to defend its decision to manufacture products in China, as well as the bad working conditions for people making iPhones and iPads.”