Alan Yeung describes Foxconn’s approach to Milwaukee jobs, overseas suppliers and transit options

Company open to discussing transit options

While the majority of the 13,000 jobs Foxconn Technology Group plans to create in Wisconsin would be in Racine County, a top company executive said Monday “several hundred” jobs could be in downtown Milwaukee.

Alan Yeung announces Foxconn’s Smart City, Smart Future initiative on May 10.

“The majority of (the 13,000 jobs) will be on-site in Racine County within the (Foxconn campus development) zone,” said Alan Yeung, director of U.S. strategic initiatives for Foxconn. “But a great deal of that actually will be outside Racine and I would be remiss not to say that several hundred of them perhaps will be in Milwaukee related to our new headquarters building.”

Speaking at the monthly meeting of the Greater Milwaukee Committee, Yeung said Foxconn is close to announcing the closing of its deal to buy the 611 Building from Northwestern Mutual Life Insurance Co. The company announced its plans to acquire the building and establish its regional headquarters there in February.

Foxconn’s development agreement with Mount Pleasant and Racine County requires the majority of the 13,000 jobs be located there. The company’s contract with the state allows it to count jobs created anywhere in the state toward its payroll tax credits, so long as the positions benefit the manufacturing campus in Mount Pleasant.

“I think we are looking at the entire state of Wisconsin as a possibility,” Yeung told reporters after the meeting, describing the Milwaukee headquarters as a place where the company could showcase products and work on innovations. “But beyond Milwaukee and Racine, right now we don’t have really another site.”

With the GMC meeting focused on General Mitchell International Airport’s connection to Foxconn, Yeung also described some of the company’s logistics plans.

He noted 15 or 20 years ago, the size of devices and components made flying supplies and other materials in to a factory impractical. As a result, manufacturers established operations near the coasts of China and Taiwan to be close to ports. As devices and components have shrunk, facilities have pushed inland and there is a parallel with Foxconn establishing operations in Wisconsin, Yeung said.

“I think the freight, to us, is very interesting,” Yeung said. “I think we may offer opportunities for long haul flying in from Asia Pacific. Some of the supply chain we’re creating here in Wisconsin, (but) we cannot move everything here, so there will be components of systems (that) will be coming in to Wisconsin and some of that might be by sea, by freight, by train and by land, but quite a bit of that will be by air.”

Yeung told reporters sourcing from Asia would depend on the product, noting LCD panels are too big to fly but smaller components of a laptop or television may make sense.

“That’s a lot of electronics,” he said. “Some of which you probably would not want to bring into Wisconsin or the United States as part of a manufacturing base. We know for a fact that they could be more expensive here or just doesn’t have the scale. On the other hand, some of those will be done here, as well. So as a manufacturer, as a company operating globally, those are decisions we would have to make from a supply chain standpoint.”

Foxconn and state officials have said 100 to 150 suppliers would follow the company from Asia to Wisconsin. While the products of some of those suppliers necessitate locating close to Foxconn, Yeung’s comments are an acknowledgment the entire supply chain won’t be coming to the United States.

One supplier that has been closely tied to Foxconn is New York-based glassmaker Corning Inc. The company has been expected to build a $1 billion glass plant on the Foxconn manufacturing campus. But Wendell Weeks, chairman and chief executive officer of Corning, said in April that two of every three dollars for the plant would have to come from someone else, and state officials have ruled out additional subsidies for the Foxconn project.

Asked when a Corning announcement might be made, Yeung declined to provide any details.

“I think right now we’re still working on those conversations. I don’t really have a whole lot to share,” he said.

“I think there are partners out there, but I really would not be in a position to say beyond that,” Yeung added, when pressed on whether another supplier could take Corning’s place.

Bob O’Brien, a partner at Display Supply Chain Consultants and a former Corning executive, told BizTimes in April the two main Corning competitors – Asahi Glass Co. and Nippon Electric Glass Co. – are not likely to jump in because they face even more challenging economics than Corning does.

During his remarks, Yeung acknowledged the Foxconn project has evolved. A report from Nikkei Asian Review in May suggested Foxconn had opted to produce smaller products in Wisconsin, potentially cutting the size of its investment. At the time, the company issued a statement indicating it was still committed to creating 13,000 jobs and investing $10 billion. Yeung repeated that commitment on Monday.

“A lot has changed. In fact, a lot of the plans that we put together have been modified, updated and some of those we don’t actually know whether they are true anymore, but what has not changed for one is our commitment to the community,” he said.

Asked for examples of how plans have changed, Yeung said Foxconn’s work in what he described as an “experimental production line” in Mount Pleasant “would make our factory even more modernized.”

“I think what that means is more robotics,” he said, noting much of the work has focused on advanced manufacturing and Industry 4.0 techniques.

He said that would result in an increased reliance on highly trained workers.

“Many of the workers or our personnel down there will no longer be your old-fashioned, blue-collar workers, many of them will be knowledge workers, developers, engineers (and) professionals,” he told the GMC audience.

He also expressed interest in Foxconn connecting to the available workforce in Milwaukee, but said the company has not gotten behind any single idea for transporting workers to its factory. City and county leaders have proposed different options, including expanded Amtrak service and a dedicated bus route.

“We actually would not rule out any options, including, of course, shuttle and including rail options, and many other ways. One thing that we look at as a benchmark is actually the San Francisco Bay Area,” Yeung said, referencing shuttle services offered to employees by some of the biggest names in tech.

“I think it’s a bit too early for us to say, ‘Yup, let’s definitely go do that and let’s not fund that one,’” he added. “But I think we would love to have a chance to talk to the City of Milwaukee and actually sit down and explore what are sensible and economical, and actually what would be a good viable option or set of options.”

While the majority of the 13,000 jobs Foxconn Technology Group plans to create in Wisconsin would be in Racine County, a top company executive said Monday “several hundred” jobs could be in downtown Milwaukee.

Alan Yeung announces Foxconn’s Smart City, Smart Future initiative on May 10.

“The majority of (the 13,000 jobs) will be on-site in Racine County within the (Foxconn campus development) zone,” said Alan Yeung, director of U.S. strategic initiatives for Foxconn. “But a great deal of that actually will be outside Racine and I would be remiss not to say that several hundred of them perhaps will be in Milwaukee related to our new headquarters building.”

Speaking at the monthly meeting of the Greater Milwaukee Committee, Yeung said Foxconn is close to announcing the closing of its deal to buy the 611 Building from Northwestern Mutual Life Insurance Co. The company announced its plans to acquire the building and establish its regional headquarters there in February.

Foxconn’s development agreement with Mount Pleasant and Racine County requires the majority of the 13,000 jobs be located there. The company’s contract with the state allows it to count jobs created anywhere in the state toward its payroll tax credits, so long as the positions benefit the manufacturing campus in Mount Pleasant.

“I think we are looking at the entire state of Wisconsin as a possibility,” Yeung told reporters after the meeting, describing the Milwaukee headquarters as a place where the company could showcase products and work on innovations. “But beyond Milwaukee and Racine, right now we don’t have really another site.”

With the GMC meeting focused on General Mitchell International Airport’s connection to Foxconn, Yeung also described some of the company’s logistics plans.

He noted 15 or 20 years ago, the size of devices and components made flying supplies and other materials in to a factory impractical. As a result, manufacturers established operations near the coasts of China and Taiwan to be close to ports. As devices and components have shrunk, facilities have pushed inland and there is a parallel with Foxconn establishing operations in Wisconsin, Yeung said.

“I think the freight, to us, is very interesting,” Yeung said. “I think we may offer opportunities for long haul flying in from Asia Pacific. Some of the supply chain we’re creating here in Wisconsin, (but) we cannot move everything here, so there will be components of systems (that) will be coming in to Wisconsin and some of that might be by sea, by freight, by train and by land, but quite a bit of that will be by air.”

Yeung told reporters sourcing from Asia would depend on the product, noting LCD panels are too big to fly but smaller components of a laptop or television may make sense.

“That’s a lot of electronics,” he said. “Some of which you probably would not want to bring into Wisconsin or the United States as part of a manufacturing base. We know for a fact that they could be more expensive here or just doesn’t have the scale. On the other hand, some of those will be done here, as well. So as a manufacturer, as a company operating globally, those are decisions we would have to make from a supply chain standpoint.”

Foxconn and state officials have said 100 to 150 suppliers would follow the company from Asia to Wisconsin. While the products of some of those suppliers necessitate locating close to Foxconn, Yeung’s comments are an acknowledgment the entire supply chain won’t be coming to the United States.

One supplier that has been closely tied to Foxconn is New York-based glassmaker Corning Inc. The company has been expected to build a $1 billion glass plant on the Foxconn manufacturing campus. But Wendell Weeks, chairman and chief executive officer of Corning, said in April that two of every three dollars for the plant would have to come from someone else, and state officials have ruled out additional subsidies for the Foxconn project.

Asked when a Corning announcement might be made, Yeung declined to provide any details.

“I think right now we’re still working on those conversations. I don’t really have a whole lot to share,” he said.

“I think there are partners out there, but I really would not be in a position to say beyond that,” Yeung added, when pressed on whether another supplier could take Corning’s place.

Bob O’Brien, a partner at Display Supply Chain Consultants and a former Corning executive, told BizTimes in April the two main Corning competitors – Asahi Glass Co. and Nippon Electric Glass Co. – are not likely to jump in because they face even more challenging economics than Corning does.

During his remarks, Yeung acknowledged the Foxconn project has evolved. A report from Nikkei Asian Review in May suggested Foxconn had opted to produce smaller products in Wisconsin, potentially cutting the size of its investment. At the time, the company issued a statement indicating it was still committed to creating 13,000 jobs and investing $10 billion. Yeung repeated that commitment on Monday.

“A lot has changed. In fact, a lot of the plans that we put together have been modified, updated and some of those we don’t actually know whether they are true anymore, but what has not changed for one is our commitment to the community,” he said.

Asked for examples of how plans have changed, Yeung said Foxconn’s work in what he described as an “experimental production line” in Mount Pleasant “would make our factory even more modernized.”

“I think what that means is more robotics,” he said, noting much of the work has focused on advanced manufacturing and Industry 4.0 techniques.

He said that would result in an increased reliance on highly trained workers.

“Many of the workers or our personnel down there will no longer be your old-fashioned, blue-collar workers, many of them will be knowledge workers, developers, engineers (and) professionals,” he told the GMC audience.

He also expressed interest in Foxconn connecting to the available workforce in Milwaukee, but said the company has not gotten behind any single idea for transporting workers to its factory. City and county leaders have proposed different options, including expanded Amtrak service and a dedicated bus route.

“We actually would not rule out any options, including, of course, shuttle and including rail options, and many other ways. One thing that we look at as a benchmark is actually the San Francisco Bay Area,” Yeung said, referencing shuttle services offered to employees by some of the biggest names in tech.

“I think it’s a bit too early for us to say, ‘Yup, let’s definitely go do that and let’s not fund that one,’” he added. “But I think we would love to have a chance to talk to the City of Milwaukee and actually sit down and explore what are sensible and economical, and actually what would be a good viable option or set of options.”

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