Talks of a resurgence in manufacturing have receded almost as fast as the new presidential administration has promised retaining and increasing factory jobs, but at least one global manufacturer says it will open a new factory in the U.S. – and it is going to be “YUGE.”
After days of conflicting news reports, Foxconn, one of the most critical companies within Apple’s supply chain, announced it will build a new factory in Wisconsin. The company had said it is willing to invest anywhere from $7 billion to $10 billion in either the upper Midwest or North Carolina. After promises that the plant would hire as many as 13,000 workers, Foxconn now suggests 3,000 workers would be employed there.
No, that does not mean your iPhone or iPad will at least be partially manufactured in the U.S. at any point soon. An American-made smartphone or tablet will not anyone’s reality this decade, despite the U.S. president’s boast that Apple CEO Tim cook “promised” him that the global gadget giant could build three plants within the U.S. in the near future.
Over the past year, Foxconn was wavering over a decision to launch any operations on American soil at all. Earlier this year, the Taiwan-based electronic components manufacturer appeared to quash talk over the possibility of a factory, saying during the early days of the Trump Administration that a U.S. plant was more of a “wish” instead of an outright “promise.” Then during the past spring, rumors abounded that a Foxconn U.S. factory making iPhone and iPad displays could be on the drawing board after all. As summer approached, Bloomberg reported that seven states were in the mix, as Foxconn’s chair Harry Gou suggested one or more factories were a distinct possibility.
It turns out that instead of small displays for smartphones and tablets, a new Foxconn factory would manufacture large-sized flat screen television panels, which makes sense financially for the company as those components are expensive to ship across the Pacific from Asia.
A feeding frenzy had been underway as U.S. states stepped over themselves to lure Foxconn with tax credits and other financial incentives – not too dissimilar from three years ago, when states such as California pulled out all the stops for Tesla’s first gigafactory. That massive plant is now emerging on a site just outside of Reno, Nevada. Earlier this week, the Milwaukee Journal Sentinel and other news outlets have reported that Wisconsin is in the lead for the Foxconn plant. Racine and Kenosha counties had been considered frontrunners; Janesville, home of U.S. Speaker of the House Tim Ryan, is apparently off any short list.
The prospect of landing almost 10,000 jobs would be a huge win for any politician; Janesville’s selection certainly would have helped cement the on-again, off-again fleeting relationship between Speaker Ryan and President Trump. But as an op-ed in a local Janesville reminded readers, a town’s reliance on one massive employer can cause growing pains and spikes in housing prices – and then a massive economic slump in the event that a company decides to leave a one-employer town, as what occurred when General Motors jilted the city of 64,000 people a decade ago.
Meanwhile, Wisconsin Governor Scott Walker was reportedly meeting behind closed doors mulling potential offers to Foxconn worth up to $2 billion in order to lure the manufacturer to the Badger State. News reports have estimated the total to now be $3 billion; any package would have to be approved by Wisconsin’s state legislature. The windfall that Foxconn could land will certainly raise questions whether it is worth sticking state taxpayers with a huge bill in order to pad Walker’s resume as he heads into an election year – and short of the 250,000 new jobs in Wisconsin he promised during the last election season.
The deal was announced in the White House East Room, and President Trump took credit for making the factory a reality. But as several news reports have pointed out, Foxconn has a history of making big press-worthy statements. In 2013, the company said it would open a factory in Pennsylvania that would hire 500 workers. But after the news stories faded and politicians moved on to other matters, Foxconn never launched that factory. Similar promises have fizzled in Brazil, Vietnam, Indonesia and India.
Image credit: Matt Wakeman/Flickr