Taiwan-based Foxconn Technology Group’s plans to build a liquid-crystal display screen factory in Wisconsin are so big, it’s mind-boggling.
The company plans to build a 20 million-square-foot plant in southeastern Wisconsin, likely in Racine County. By comparison, Amazon built two huge facilities in Kenosha with a total of 1.6 million square feet.
It will cost $10 billion to build the Foxconn facility. By comparison, the 32-story Northwestern Mutual Tower and Commons project in downtown Milwaukee cost $450 million.
The Foxconn facility will have 3,000 employees initially, and could grow employment up to 13,000. The jobs will have an average salary of more than $53,000.
But the most stunning big number associated with the Foxconn project is the $3 billion in tax incentives in a deal with Gov. Scott Walker that needs approval from the Legislature. The tax credits are contingent on the job creation and capital investment being made.
The Foxconn deal is unprecedented for the state, but is one worth making. The subsidy is huge, but so is the potential economic impact when you include the jobs at Foxconn, the construction jobs to build the facility and the supply chain potential.
It would be great if the state didn’t have to offer an incentive to attract Foxconn, but it was clearly necessary to win a multi-state competition for the plant. Walker went all in, won and deserves the credit. He believes the Foxconn plant will transform the state’s economy, turning it into a high-tech manufacturing center, booming like Silicon Valley (he calls it “Wisconn Valley”). Walker said the Foxconn plant is the “single largest economic development project” in the state’s history, will support 22,000 indirect jobs and is expected to make $4.26 billion in supplier purchases annually, with one-third being made in Wisconsin.
But first, Foxconn has to make good on its plans. The company has massive factories around the world, but in some cases has not followed through after announcing major developments. Four years ago, the company announced plans for a $30 million plant with 500 jobs in Pennsylvania, but never moved forward with it.
The company has also faced some criticism for its labor practices and endured a rash of worker suicides seven years ago. Presumably, American labor laws will prevent that from being a problem here.
The deal appears to be largely politically driven. President Donald Trump is putting pressure on firms to add more manufacturing plants in the U.S.
The Wisconsin ties of White House Chief of Staff Reince Priebus and House Speaker Paul Ryan only helped Wisconsin’s bid for the Foxconn plant.
The plant could provide a much-needed boost for Racine’s economy, which has suffered for years from a loss of manufacturing jobs.
