Foxconn goin’ up
In an unprecedented deal for American manufacturing, Foxconn, the world’s largest manufacturer of electronic parts, has committed to a $10 billion display panel plant.
That plant wold be in Wisconsin and could employ up to 13,000 workers.
Governor Scott Walker calls the deal “the biggest development deal in the history of Wisconsin.” He’s not wrong. Current plans call for 20 million square feet, making it one of the largest manufacturing complexes of any kind in the United States, and the project will initially employ 3,000 workers at an average income of $53,900 per year, plus benefits.
It could eventually employ up to four times that many.
Other industries can expect a boost too: the project incorporates housing, storage and service businesses as well as the manufacturing plant.
Foxconn, a Taiwan-based manufacturer best known for producing Apple’s iPad and iPhone, has never opened a major plant in the United States before. As Foxconn CEO Terry Gou says, “America does not have a single LCD plant to produce a complicated system. We are going to change that.”
Some concerns have been raised about the deal. The Foxconn factory will benefit from a $3 billion government subsidy.
That makes it the largest state-funded subsidy in Wisconsin history by a factor of 50.
That shakes out to $66,600 for each of the 3,000 initial workers, which, given Foxconn’s stated intent of $53,900 per year in average income, has caused some analysts to ask cost-benefit questions. In addition, Mr. Gou has a history of committing to major manufacturing projects and not following through.
That said, as long as Foxconn makes good on its commitments and business growth surpasses tax expenses, the Wisconsin plant could represent, as President Trump stated in a recent address, “a great day for American workers and manufacturers and everyone who believes in the concept and the label ‘Made in the USA.’” Governor Walker is already calling the project “Wisconn Valley” and calling for a tech transformation of Wisconsin comparable to the Bay Area under companies like Apple and Google.
If that’s achievable, the guys who make the iPhone seem like a solid place to start.