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MADISON — Two recent news stories, seemingly unrelated to the media fire drill over the Foxconn Technology Group project, help to explain why the company could significantly evolve its Wisconsin operations over time.

Tom Still

Still

The first was a New York Times story on how American-born Apple struggled to assemble its Mac Pro computer in Texas, despite its best “Made in America” intentions, mainly because of gaps in the supply chain and lack of available talent. As Apple chief executive officer Tim Cook was quoted as saying in late 2017: “In the U.S., you could have a meeting of tooling engineers and I’m not sure we could fill the room. In China, you could fill multiple football fields.”

The second story from The Associated Press also involved Apple, which is grappling with sluggish iPhone sales — especially in China, its No. 2 customer behind the United States — and how that has affected revenues and stock prices of late. The company is now counting on more growth in a division that collects commissions from paid apps, processes payments, sells hardware warranty plans and music streaming subscriptions.

How does the affect Foxconn and its plans for Wisconsin? Directly and indirectly.

Foxconn is a leading Apple contractor, even if assembly of iPhones and Macs was never on the drawing boards for the company’s facility in the Racine County Town of Mount Pleasant. Foxconn is one of the top five tech companies in the world, yet it is subject to trends that range from global device sales to talent pipelines to trade wars.

Those trends are playing out now. On Jan. 30, a Reuters news report said Foxconn was reconsidering whether to produce LCD video screens in Racine County, touching off finger-pointing among people and politicians on all sides of the Foxconn deal.

The next day, there were conflicting reports. The first quoted a leading Foxconn official as saying the Reuters story was out of context and nothing had changed in terms of the company goal to create 13,000 jobs and invest $10 billion in Wisconsin. The second, from Nikkei Asian Review, said Foxconn will suspend work on its Racine campus and postpone work on a $9-billion display panel project in Guangzhou, China, for at least six months. On Friday, after a conversation with President Trump, Foxconn recommitted to building a manufacturing plant in Wisconsin.

With all the conflicting news, this much appears to be true:

  • Foxconn has invested about $200 million in Wisconsin so far, acquired several thousand acres of land, acquired property for innovation centers in Eau Claire, Green Bay and Milwaukee, and forged relationships with many, if not most, academic institutions in the state.
  • Private and public economic development officials in Wisconsin have been told by Foxconn’s No. 2 executive that work will proceed during the next 18 months in Racine County on a liquid crystal module packaging plant; a high-precision molding factory; a system integration assembly facility; a rapid prototyping center; a research-and-development center; a high-performance data center; and a town center to support employees in Mount Pleasant.
  • A contract negotiated by the state of Wisconsin and Foxconn remains in place, setting out tiered goals for job creation, salary levels and capital investment in exchange for state tax credits. The contract is structured in an “all or nothing” way that means tax credits are not paid each year unless annual goals are met in their entirety. For example, Foxconn didn’t get any tax credits for the 2018 year because it fell short of hiring enough people.

Foxconn’s footprint in Wisconsin may eventually be that of a diversified company with interests in research and development, engineering, advanced screens for industries such as aviation and autonomous vehicles, medical imaging, high-throughput computing, robotics, sustainable systems and other technologies consistent with what Wisconsin does well.

Will that result in 13,000 jobs and investments of $10 billion? No one knows, probably even those inside Foxconn. The only thing that seems certain is that state taxpayers are protected under ever-changing global and market scenarios that have little or nothing to do with events in Wisconsin.

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Tom Still is president of the Wisconsin Technology Council.

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(12) comments

lutefisk

Did you even read the article?

canman

Still apparently didn’t read the AP fact checker story of the tens of millions of dollars spent by the state and local governing bodies for infrastructure and land acquisition. This Scooter boondoggle will cost the taxpayers millions whether it succeeds or not. Fox Con’s flip flopping proves this was a folly in the first place.

DMoney

If it succeeds, you still believe it will be a net loss to taxpayers? Are you insane?

DMoney

Nobody knows. So far so good. Foxconn has made major investments, almost a few hundred people are employed, many people got paid extremely well to sell their homes, many people have been put to work zoning and building. Pipelines are being created at our universities. Taxpayers have paid, and there is risk. But we've already seen some return on investment.

oldhomey

D, it would behoove you to lay off the Kool-Aid. So far is NOT so good with FoxConn. It is a company that historically has reneged on deals all over the place. I will not say this is what is going to happen here, but I will say that the company is holding to the pattern of past actions, which is not good at all. I hope for the best, but I am extremely skeptical.

DMoney

We'll see. I wonder how the hundreds of newly employed and their families think? I wonder how the people getting 140% plus 50k/acre for selling previously unsellable homes feel? How many contractors have had record years in 2018? And its hardly just begun.

oldhomey

Yes, it has hardly just begun, and the company that got all the breaks at tax payer expense is showing every sign that it intends to severely curtail the benefits it promised. Beyond the one political issue that drives your entire world view, D, abortion, you seem inordinately obsessed with the power wielded by billionaires and extremely large corporations, as though they have an ultimate power over our lives. What gives?

DMoney

The company has gotten no breaks. Have you read any of these articles, and what was quoted by your savior Evers? Even he acknowledges that foxconn has received no benefit yet. Companies like this create opportunity and growth. Hundreds and hundreds are experiencing it now. Thousands (hopefully) to come. Beautiful thing.

oldhomey

Well, I have to admit, D, I don't know the down and dirty details yet on who has spent what on what has been done so far with Foxxcon. I would guess, however, that it is not exactly going in the way you are describing it. This is a company with a lousy, lousy reputation, so it is up to Foxxcon to prove their reputation is wrong at this point, and so far it is acting like it is up to something that isn't going to ultimately make people happy.

Redwall

OldFoney is too busy ringing his hands over how someone elses taxes are spent.

Can he tell us when the next outrage pity party is scheduled for Burns Park?

The Mouse of Death

[censored]It would behoove us to Foxconn me once, shame on you, Foxconn me twice, shame on me. We are indeed bemezzled by the fact that there is a Republican born every minute.

DMoney

It would behoove you to lay off the acid.

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