Corporation of the Year: Foxconn Technology Group

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When President Donald Trump mentioned during a June stop at Waukesha County Technical College that he and Gov. Scott Walker had been negotiating with “a major, major incredible manufacturer” it was the first public hint of something that could remake Wisconsin’s economy for generations to come.

Foxconn Technology Group’s announcement in late July of its plan to invest $10 billion to create 13,000 jobs at an LCD manufacturing plant in Mount Pleasant are unlike anything the state has seen before.

A White House announcement that the company chose Wisconsin was followed by a Metropolitan Milwaukee Association of Commerce welcome party at the Milwaukee Art Museum. There were bold proclamations of the project putting Wisconsin on the map globally and the creation of an advanced manufacturing and electronics technology ecosystem that Walker called “Wisconn Valley.”

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But the early fanfare quickly gave way to political division. Opponents of the project pointed to Foxconn’s promises for investment that didn’t pan out in Brazil, Pennsylvania and Indonesia as reasons to doubt the Wisconsin project would become reality. Critics also questioned the company’s track record on treatment of workers and the environment. What initially seemed like a chance for broad bipartisanship ended with support from just a few Racine- and Kenosha-area Democrats.

Before long, polls were suggesting the state was paying too much or that Walker struck the deal with his re-election in mind. Lawmakers and the public pressed the Wisconsin Economic Development Corp. to provide more details before the contract awarding $3 billion in state incentives was made final.

The agency did bend a little, but ultimately voted on the deal in closed session. Days later, Walker and Foxconn chairman Terry Gou signed the contract at the headquarters of S.C. Johnson & Son Inc. in Racine.

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In addition to the state incentives, Mount Pleasant officials created a tax increment financing district for the Foxconn project to fund a $764 million investment that will include land acquisition, infrastructure upgrades, financing expenses and contingencies.

Landing Foxconn has prompted local leaders to be more ambitious when it comes to what is possible for southeastern Wisconsin. Those leaders are talking more urgently about the need to collaborate across boundaries and political divisions. The project has also engaged residents around the region in discussions about the future direction of the economy. For these reasons, Foxconn is the BizTimes Best in Business Corporation of the Year for 2017.

In a statement, Foxconn said it chose Wisconsin for many reasons, including the state’s “talented and hardworking workforce,” a strong partnership with Walker and WEDC, and a warm welcome from the public and local officials.

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“We look forward to being a part of the Wisconsin community and contributing to its transformation through the significant direct and indirect value that our operations will generate, and we will do so while ensuring that the very things that attracted us to Wisconsin, including its long track record in advanced manufacturing, favorable quality of life and pristine environment, are protected and nurtured,” the statement said.

Plenty has been written and said about the incentives being offered to the company. For some, the price tag was just too high.

“I think $3 billion in one industry that’s prone to technological changes is too much” said state Rep. Dana Wachs, an Eau Claire Democrat, WEDC board member and candidate for governor. He suggested the money could be better used to fund startups. “This deal is too risky in general.”

Whether the Foxconn deal pays off or not is an issue that will play out over the next several decades. Walker believes it will create middle-class jobs that support families. During the contract signing, he suggested in the future people would describe the “visionaries back in 2017 who said we’re going to partner with a world-class company who wants to bring good-paying, family-supporting, sustaining jobs to America and we were proud to say they chose Wisconsin and forever more we’ll be blessed because of it.” 

That people will be talking about Foxconn for years to come seems to be the one sure thing. Critics of the deal aren’t wrong; the company’s industry changes rapidly. That’s one reason it has set aggressive timelines from the start. Supporters also argue Foxconn has shown an ability to adapt after more than four decades in business.

The bet Foxconn is making is on the 8K+5G ecosystem, which takes advantage of the next generation of screen resolution and cellular connections. The company’s leaders believe it can lead to significant changes not just in how people watch television, but also in industries like automotive, defense, medicine, education and advanced manufacturing.

“We believe that the Wisconsin campus will be a flag-bearer for intelligent manufacturing in the Industry 4.0 era, and help position Wisconsin as a global leader in high-technology advanced manufacturing,” the company statement said. “The Wisconsin campus will also provide a platform for the development of next-generation hardware and solutions as part of our 8K+5G ecosystem, and serve a catalytic role in cultivating a new class of vertical solution providers.” 

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