Milwaukee Biz Blog: Why a company such as Foxconn might consider Wisconsin

Reasons state has what it takes to compete

The speculation began within minutes of when President Trump, speaking in Waukesha and alluding to negotiations with an unspecified company, told Gov. Scott Walker he might get “a very happy surprise very soon.”

That surprise may well be Foxconn, a Taiwanese giant that assembles Apple’s iPhones and other electronics. No one will say for sure, but the Associated Press reported it had off-the-record confirmation that Foxconn is talking with Wisconsin.

The Wisconsin Economic Development Corp. never comments on pending or potential opportunities – which is appropriate given how fragile and competitive such talks can be – so the potential “surprise” is still tightly wrapped inside a box awaiting a party that may never come.

This much is known, however. Foxconn is best known as one of Apple’s iPhone and iPad manufacturing partners. The company is likely to build a plant in the United States that would be used to build displays for everything from “Internet of Things” products to Apple devices.

As DigiTimes reported earlier this year, Foxconn would use a U.S. facility to manufacture “small to medium displays for IoT applications, including automotive, medical care and mobile terminal displays.” It could also be used to develop new screens for existing Apple products and televisions.

At a recent news conference, Foxconn CEO and Chairman Terry Gou said the company was planning to invest $10 billion in a U.S. facility, and will decide on a location in July. Gou said the company is currently considering Wisconsin, Ohio, Michigan, Pennsylvania and North Carolina as possible locations.

Why would a company so large that entire cities have sprung up around its global factories have an interest in the United States and Wisconsin?

For starters, building a huge screen plant in the United States would fit well with Trump’s push to create more domestic jobs. Trump has criticized foreign and domestic companies alike for not creating or keeping American manufacturing jobs, and he has threatened to increase tariffs on imports from countries that don’t take heed.

The interest goes beyond politics, however. Foxconn would like to secure a larger share of American markets, particularly for products such as Sharp, a recently acquired subsidiary. Localizing screen production could help the company save on transport costs. The resulting publicity could also help sell more high-end Sharp-branded sets in the United States, the world’s second-biggest television market.

Those factors apply anywhere in the United States where Foxconn chooses to build. So, why Wisconsin?

  • The state has a manufacturing tradition that extends to electronic devices, equipment and components. In fact, electrical machinery of all types accounted for 9.4 percent of Wisconsin exports in the most recent year – about $2 billion in total. Power electronics and controls has been a Wisconsin specialty for a century or more.
  • Wisconsin is a state plugged into the Internet of Things through major companies such as GE Healthcare, Johnson Controls, Rockwell Automation and more. The Internet of Things is a term that describes using the internet to connect computing devices embedded in everyday objects, enabling them to send and receive data via WiFi, cellular connections or other networks. It includes anything from your Fitbit wristband to coffeemakers and garage openers you can control through a smartphone, to smart buildings, connected cars and much more. Wisconsin companies large and small have been increasingly good at figuring it out.
  • The state has the foundation to produce skilled workers through the Wisconsin Technical College System and the UW System. The Department of Computer Sciences at the UW-Madison is one of the leading academic departments in the country, usually ranking in the top 12. There are strong engineering colleges in Madison, Milwaukee, Menomonie and Platteville.
  • There are logical plant sites available and an infrastructure in place that would enable a company the size of Foxconn to deliver its products to market.

Some other states may be able to dig deeper into their own pockets to provide cash incentives. That means the president’s “surprise” could fizzle like a candle on a birthday cake.

At the same time, there is reason to believe Wisconsin has what it takes to compete, if not for Foxconn the next major company.

Tom Still is president of the Wisconsin Technology Council.

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