August 20, 2017

Apple May Skirt IPhone Tariffs as Foxconn Comes to the US

29 July 2017, 08:11 | Virginia Santiago

President Donald Trump speaks alongside Terry Gou right chairman of Foxconn

President Donald Trump speaks alongside Terry Gou right chairman of Foxconn

Foxconn's plan for a $10 billion factory in Wisconsin is certainly good news for President Donald Trump and Republican politicians Gov. Scott Walker and Speaker Paul Ryan, whose district the plant would call home. But this is the biggest deal Wisconsin has done in terms of a sweetener, so $3 billion, that's a lot of money.

The announcement comes at a critical juncture for a Trump administration that pledged to generate manufacturing jobs but has struggled to deliver results as quickly as the president promised. "The jobs we're talking about here, they're going to require four-year degrees".

"Obviously, 13,000 jobs all at once in a short period is challenging", said Patrick O'Brien, executive director of the economic development organization Milwaukee 7.

Political and economic development leaders in Wisconsin used a relentless, full-court press to win Foxconn Technology Group's $10 billion LCD panel factory, the first LCD factory to be built outside of Asia.

Wisconsin Governor Scott Walker said at the White House his state will award $3 billion in incentives and sign a memorandum of understanding on the investment on Thursday. For Foxconn, this isn't a huge problem because Wisconsin is a hotbed for manufacturing, he noted.

With U.S. unemployment near a 16-year low, it's hard to imagine recruiting as many as 13,000 workers in any single area of the country would be easy.

A spokesman for the Wisconsin Taxpayers Alliance (WISTAX), a nonpartisan research organization focusing on tax and fiscal policy, said there are too many unanswered questions about the Foxconn deal to pass judgment about its value to the state.

"I want to thank Governor Walker and Foxconn for funding the rebuilding and expansion of I-94 North-South in the Foxconn special session bill".

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Since the Foxconn talks began to surface in public in June, speculation centered on how Wisconsin might attract the Taiwanese electronics giant if it came down to a bidding war with much larger states such as Michigan, Ohio, Pennsylvania and Texas.

Taiwan-based Foxconn is perhaps best known for assembling Apple iPhones in China and is the world's biggest contract assembler of smartphones and other devices.

Walker has now dubbed the southeastern region "Wisconn Valley", as Foxconn will bring talented and highly trained technology workers to the area - likening it to Silicon Valley, Calif. - while also creating 22,000 indirect jobs across the state.

An exact location has not been determined, but Foxconn is looking at sites in Racine and Kenosha counties.

Tangen said the benefits to the company would be substantial.

The increase in GDP would be an increase of 1.6 percent over the $317.22 billion annualized figure Wisconsin had in the first quarter of the year. In 2013, for example, Foxconn announced plans to build a $30 million plant in Pennsylvania.

Walker said he would convene a special session of the Wisconsin Legislature to address the Foxconn incentive package.

One ray of hope that Foxconn will stick to its promise comes from a joint announcement that company made with Rockwell Automation regarding a new collaboration to implement Connected Enterprise and Industrial Internet of Things (IIoT) solutions in Foxconn's new USA facilities.

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