Electronics giant Foxconn Technology Group, a major product supplier to Apple, Microsoft and Intel, made news this week when it announced a $10 billion expansion of its operations in southeastern Wisconsin to make flat-panel (LCD) displays and other products.
The six-year project should create some 10,000 construction jobs, Foxconn said, 3,000 permanent jobs when the plant opens and estimates ranging from 10,000 to 22,000 jobs that support the facility, depending on how you add up secondary markets and economic multipliers when it goes online.
Contractors will be doing very well in this region, long after that plant goes live. OK, that’s an easy prediction.
The Taiwanese company’s upcoming facility in the American Midwest is expected to employ at least 3,000 people and potentially increase to 13,000 total jobs, a win for President Donald Trump’s agenda to return manufacturing jobs to the US, Endgadget.com reported.
Quartz.com may be having some fun when it reports that Wisconsin Governor Scott Walker hosted an event for business leaders at which he and Foxconn founder and chairman Terry Gou signed a memorandum of understanding about the plan.
“On the badges of each attendee were written in big block letters the words that have become the governor’s defacto slogan for the project: “Welcome to Wisconn Valley.”
Well…..let’s not get too carried away.
After all, the facts of the deal alone are positive on their face. Now, it’s up to the state’s legislature to approve a $3 billion incentive package after Gov. Walker called a special session Friday. The package reportedly includes state income tax credits and a $150 million sales tax “holiday.”
The Chicago Tribune, meanwhile, notes that the deal could create problems for its next-door neighbor after “Wisconsin — a Republican-led swing state that voted for President Donald Trump — beat out Illinois and other contenders for the $10 billion investment.”
[If] the project moves forward as planned, it will create unprecedented challenges for Wisconsin’s infrastructure, workforce, education, housing and culture in a relatively tranquil part of the state.
We’re betting that those are the kind of problems Wisconsin would be happy to face and address as its economy grows with this facility. As for Chicago’s home state, its business climate won’t be helped by this, the Trib continues:
Illinois will face its own challenges, as companies here try to get their foot in the door of a potential customer across the border. Meanwhile, the state, which has scored victories with corporate relocations and thousands of warehouse jobs from high-fliers such as Amazon, currently has no major job incentive program it can use to woo a large employer like Foxconn.
The state’s population growth trails that of some southern and western states, but the plant and suppliers it could attract would not only reel in out-of-state workers, but also help Wisconsin retain the technical and engineering talent it’s been exporting, said Jim Paetsch, a vice president atMilwaukee 7, a regional economic development group.
“Our universities are graduating more people than our companies need … and they go elsewhere,” Paetsch said. “We will be able to draw people to Wisconsin on a scale that we haven’t been able to in the past.”
The article finally gets around to the big reason that Illinois lost out: its financial woes, including a credit rating that has sunk to junk status, a $15-billion hole in its budget and state employee pension funds that are woefully underfunded, to put the issue mildly.
As Peterson told the Trib: Companies don’t like uncertainty, and want to know there’s not some time bomb down the road.” Illinois is the canary in the coal mine for states facing major shortfalls in how they will pay for promises, especially pensions.
Meanwhile, Gov. Walker has said the jobs created at the Foxconn factory would pay an average salary of $53,875 plus benefits and has posted many updates on his Facebook page.
It’s a step forward for what many are calling “a new kind of digital manufacturing” as consultancy McKinsey calls it, or simply 21st Century manufacturing in the U.S. and it will mean a huge boost to construction productivity and contractor work for years to come in the region.
Can we say it? It’s a win for the region.