Back in 2016, PocketNow, an online website focused on all-things portable tech, reported that Foxconn was considering opening factories in the USA. Thus far, the result has not panned out as our leaders wanted.

A little background: Foxconn is an electronics contract manufacturer with headquarters in Taiwan. It is the world’s largest provider of electronics manufacturing services and the third-largest technology company by revenue. They are also one of the largest employers worldwide with over one million employees. Foxconn’s consideration to open factories in the USA was not motivated by patriotism or even marketing. Rather, like most businesses, their decision was motivated by politics and economics.

Unfortunately, as of late-October 2020, Foxconn’s promise to open American factories has not panned out. And the whole project has turned into a surreal battle for tax cuts and a blame game in Wisconsin. A great quote from this articleillustrates how weird the situation has gotten: “As the divisions bickered, bored employees would come down from the Milwaukee headquarters to race the carts around the empty building, until the batteries finally died.” For their part, Foxconn disputed the report’s claim that the company hired employees only to achieve tax incentives.

This story highlights the challenges associated with reshoring. There needs to be a strategic and business reason to do so, such as better quality control, saving money on shipping costs, and avoiding supply chain disruptions.

Companies like Apple have to factor in all the costs and benefits to see if it makes sense to manufacture domestically, otherwise the initiative will likely fail. Tax breaks cannot be the only reason to do so.