"The project could reshape the economy of southeastern Wisconsin and involve not just a large factory but a virtual village, with housing, stores and service businesses — spread over as much as 2,300 acres, one source said. That acreage, an area totaling more than 3 square miles, potentially could be assembled from parcels that initially weren’t contiguous, he said."
The Milwaukee Journal Sentinel reports.
July 26, 2017
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106 comments:
I winder if this indicates any nervousness about China ?
Leftists repeat after me: "This has nothing to do with Trump. This has nothing to do with Trump. Midwesterners are Nazi bigots. This has nothing to do with Trump. Please pass the sweet and sour sauce. This has nothing to do with Trump."
A free market approach to globalization with a pro-native outlook.
Make Wisconsin Great Again.
Good news for southeast Wisconsin.
Will these newly manufactured iPhones have a cheese curd app?
I hope the initial investment by taxpayers will be worth it in the long run.
Why would I call Midwesterners, especially those who live in SE WI, "Nazi's"? I live in SE WI. You seriously think leftists live only on the coasts?
Now that you've come out, Inga, are you going to accept Ann's remonstrations and behave, or continue to flout her wishes until the next meltdown? You withdrew (your handle) rather than restrain yourself, but were one step ahead of the banhammer. I just wonder how this is going to go with you.
"Why would I call Midwesterners, especially those who live in SE WI, "Nazi's"?"
It's a mystery I tellya!
Maybe it has something to do with the repatriation of frozen funds, anticipating tax reform.
I got the notice on my phone a while ago from Fox Business News. Sounds like a great plan and I hope there are more such in the near future. The site wasn't specified but I'm relieved that they're not looking at urban areas.
I was assured, with complete confidence, there was no way FoxConn could build iPhones in the US. My betters even thought I was a simplton for saying I'd gladly pay a few dollars more for a $700 phone to be made in the US.
If that's true, Michael K, it could be a win-win.
.....are you going to accept Ann's remonstrations and behave....?
No. I'm a bad girl.
I oversee inventory management/purchasing for our organization. I keep needing to educate leadership that there is cost to make product, a cost to move product and a cost to store product. You may be able to get a great per unit cost having something made overseas, but depending on the sales volume of that product, shipping and storage can quickly offset any that savings.
With Asian labor costs going up, plus the increased transportation and storage costs, it makes total sense for Apple and other companies to start moving some manufacturing closer to their primary markets.
"The site wasn't specified but I'm relieved that they're not looking at urban areas."
Any site near Kenosha or Racine IS an urban area.
" it makes total sense for Apple and other companies to start moving some manufacturing closer to their primary markets."
And Apple has billions stranded overseas. Tax reform would repatriate a lot of that.
$200,000 in taxpayer subsidy per job, and it's not far from the IL border.
I guess we can assume the $700million we are short in this biennium Transportation funding will be borrowed.
We are kicking the can down the road again.
"Any site near Kenosha or Racine IS an urban area"
Kenosha is under 100,000 in population.
I'll leave it to Titus to disabuse you of that notion.
Will the new village include a suicide prevention center?
Foxconn = Taiwan company
Yes indeed, I think this is a hedge against problems with China.
Anything in the area (SE Asia) is at risk to a degree, especially if China establishes hegemony. A Taiwanese company in the region is going to have to kowtow to its effective masters.
If Trump lowers the cost of employment that is when things will really turn around. Everyone is hiring but wages are going up too slowly. They need to make new employees affordable.
Drago, Kenosha and Racine are cities, they are urban areas. They are also a hop skip and a jump away from Milwaukee to the north and Chicago to the south.
Master of the Obvious: "Drago, Kenosha and Racine are cities, they are urban areas. They are also a hop skip and a jump away from Milwaukee to the north and Chicago to the south."
LOL
Thanks.
My point stands.
"I hope the initial investment by taxpayers will be worth it in the long run."
Hilarious.
A leftist actually typed that.
A leftist who supported Obama's 787 billion dollar stimulus.
A leftist who supported hundreds of millions of dollars wasted down the black hole of the Solyndras of the world.
It's way, way too late for you to feint concern about taxpayer investments, Ms. Patriot.
Way.
"Everyone is hiring but wages are going up too slowly. They need to make new employees affordable."
Relaxing coverage mandates (required coverage) for employee medical insurance under Obamacare will go a long way to reducing employment costs.
And Drago, Titus grew up in Central WI, no where near Kenosha or Racine. I grew up in Milwaukee and have been to the gritty
little cities of Kenosha and Racine many times. Both cities have a lot of Chicago transplants.
"$200,000 in taxpayer subsidy per job, and it's not far from the IL border."
Since someone in the welfare machine (all programs) who doesn't work can accrue upwards to $40K a year, sounds like a pretty good investment for an area that needs new sources of employment.
"I guess we can assume the $700million we are short in this biennium Transportation funding will be borrowed."
Latest idea kicked around in the legislature drops that to $200 million in borrowing and Walker ditches a proposed income tax cut.
Considering the fund was a billion in the hole when Walker took over, that is a major improvement.
"Yes indeed, I think this is a hedge against problems with China."
The U.S. can't tariff an item made in the U.S and companies like Apple only get so much credit for putting "designed in California" on their overpriced gadgets made overseas.
The Wisconsin left's talking points on Foxconn
1) Walker gave away too much -- corporate welfare!! (nevermind they would have blamed him mercilessly if he failed)
2) Voters in the rest of the state will be told they are subsidizing SE Wisconsin jobs at their expense.
3) These are crappy jobs.
When asked what would they do instead???? HA HA HA...the Wisconsin media would never ask them that.
If the Wisconsin left was smart, they would embrace this and reignite the call for a once-planned Kenosha-Racine-Milwaukee commuter rail line in that area (not the Milwaukee-Madison one) needed to deliver people to these jobs. Thus accomplishing a policy goal that failed the last time they were in charge.
But the would rather rip on the jobs...and therefore, the people that would fill them.
Inga wrote: "No. I'm a bad girl. "
"Girl?" LOL.
Lots of Illinois urban people will probably flock to Racine or Kenosha to get these great jobs.
I'm an old girl, just like you Hexiled. You're less than 5 years younger than me, old girl.
The China hedge and the stranded capital are both pretty good reasons.
Congress should pivot from wasted effort on Obamacare and take up tax reform to get the economy going.
Bummed out that the Obamacare repeal was defeated in the Senate again, Michael K?
A Better Deal!
What's missing in the coverage of this is that the USA really hasn't had anyone capable of mass-market electronics manufacture since the U.S. consumer electronics industry died ca. 1980. Presently, if you really wanted to make a popular cellphone here you just wouldn't be able to find anyone able to manufacture high quantities of it in a reasonable time frame.
It's not that there's no electronics manufacturing done here, it's just that builds for the military, or builds limited-production, high-value products such as medical devices, and these are just not built in relatively small quantities.
And because the assembly work is mostly done in China, the manufacture of electronic components has mostly moved there as well.
Yet most electronics assembly is very highly automated, thus making it a reasonably good fit for high-wage countries.
Sounds like another get rich quick scheme by used car salesmen.
Sort of like the solar panel fiasco...
Remind me in 20 years who all went to jail. No wait, never mind, I'll be dead.
It looks like Wisconsin made a good bet (as did the rest of the country ) on Nov. 8th, 2016.
So. Much. Winning. And I am not tired of it, not by a long shot.
"Blogger JRoberts said...
With Asian labor costs going up, plus the increased transportation and storage costs, it makes total sense for Apple and other companies to start moving some manufacturing closer to their primary markets."
Plus the free trade globalists have managed to stagnate the serfs wages for decades now. Maybe they have just impoverished them enough to make it cost competitive.
One reason I am not that upset about universal health care is because it may be the ONLY way some of those folks will ever get a raise.
It can be tempting to dismiss this as corporate welfare, but from a Keynesian perspective, and if it's an economy still in need of fiscal stimulus, this could be good. Yes, it does depend on the numbers, and there seems to be a pretty sizable range for the cost estimates ($1 to 3 billion?). I haven't been through SE Wisconsin as often since my grandparents passed on, but Kenosha and Racine always seemed to be on the decline to me. Investing in communities that are starving for jobs is not the same as throwing money at a sports team that wants a gov't assist in developing skybox revenues.
One potential future downside to this is that once the deal with the state runs its course, the company can go shopping for another state to throw even more money at it. The other potential downside is the notion that the iPhone phenomenon has peaked and this could end up being a disaster long term, unless Foxconn has a more robust portfolio than just the iPhone, and one that the plant can easily retool in order to produce.
The article also talked about potential environmental ramifications. Hard to comment on it without knowing the real impact.
Racine and Kenosha are not urban. GE moved to Boston. Thousands of new jobs in a new skyscraper. GE relocated here because all the technical talent. How about love for us. The jobs are high paying natch.
I've never quite understood how tax abatement's get equated to "welfare". I mean seriously, someone is coming in, investing 10billion bucks in your community and ask, can you give me some help with your property taxes?
"Blogger Etienne said...
Sounds like another get rich quick scheme by used car salesmen.
Sort of like the solar panel fiasco..."
How much in loans did Foxconn get?
Make Appleton Great Again!
Titus, Racine and Kenosha are more far more urban the little podunk area of Wisconsin you grew up in. As compared to Boston, yes they are small cities, but they are urban areas with lots of Chicago transplants and crime.
I mentioned iPhone only situation in my last post, but I should note that's apparently wrong according to the article, which states: "The Foxconn plant would make liquid crystal display panels used in computer screens, televisions and the dashboards of cars." So scratch my previous premise about iPhones. D'oh!
They could put in anywhere in Wisconsin if they had a high-speed train.
Make running shoes too.
One of the reasons that area was in the running was because of it's proximity to a big puddle of fresh water, AKA Lake Michigan. When the region took on the "Rust Belt" moniker, there was a long range vision that someday the area would benefit from being near 25% of the world's fresh water supply. The production of flat screens calls for lots of water.
Foxconn's needs for water underscore an economic advantage for southeastern Wisconsin
n.n said...
A free market approach to globalization with a pro-native outlook.
How is 3 billion is tax breaks free market?
At $3 billion for 13,000 jobs, the deal would cost $231,000 per job. The subsidies would total more than the combined yearly state funding used to operate the University of Wisconsin System and the state's prison system.
These tax breaks violate equal protection principles and ought to be illegal. If states want to attract business for economic reasons they should have to do it with their base laws - not by favoring large companies or high profile industries.
I grew up 5 miles from Madison ingy while not urban more populous than Racine or Kenosha.
Ha! Dumb sock replaced by not-so-dumb sock.
#51 replaced by #55.
Watch out if #11 comes back.
They could put in anywhere in Wisconsin if they had a high-speed train.
There used to be high-speed trains running between Milwaukee and Chicago, with stops at Kenosha and Racine, and Waukegan. The North Shore Electroliner, the C&NW, and Milwaukee Road competed in this corridor.
Titus
I was up your way last week. Stayed at the Taj nee Ritz Carlton hard by the Common. All good in Boston but for the fact that Loch Ober closed.
Yes, Madison is more populous than Racine or Kenosha. Hey, did you make it to Milwaukee Titus? Some gay bars back in the day, but sort of sleazy.
Rick
That government subsidy will pay off in multiples. As we have seen here in the south attracting auto plants provide jobs but also require all sorts of other supply businesses, support businesses etc. The interstate corridor along I-85 near the BMW South Carolina has boomed with new business. Ditto eastern Chattanooga near the VW plant and on the Georgia/Alabama border at the Kia plant. All were attracted by govt goodies. All are paying off.
Quietly mentioned in the article is that the deal is actually up to $3 billion over 15 years. So dividing that figure by a headcount is highly misleading. It should be divided by person-years, so a bit over $15 thousand per person-year, rather than $231 thousand per job. Still a pretty substantial subsidy. There are other caveats, but that's the biggest misleading number in the article.
It sounds like they haven't bought all the land in the area, so some people's land may become a lot more valuable.
20,000,000 square feet. Yghe!
Average salary, +$50,000
Michael said...
Rick
That government subsidy will pay off in multiples.
This is not true. Only a tiny percentage of suppliers will base themselves locally and most of even those companies' expenses will be to out of towners. The local community and Wisconsin will never come close to recouping this amount, they'll be lucky to get 60%, forget about multiples.
As we have seen here in the south...All were attracted by govt goodies. All are paying off.
The south attracts jobs not just via tax breaks but also by lower COL and more favorable business / legal environment. This is how all states should compete. The south's tax break offer was largely unnecessary - companies save much more on pay and union costs than they do on taxes.
Rick:
How is 3 billion is tax breaks free market?
It could be that the tax levied was too high or misplaced.
n.n said...
It could be that the tax levied was too high or misplaced.
Then the free market solution is to reduce it for everyone.
Hon Hai Precision Industry Co., Ltd., trading as Foxconn Technology Group, is a Taiwanese multinational electronics contract manufacturing company headquartered in New Taipei City, Taiwan. It's Taiwanise, not mainland Chinese.
MADISON - Foxconn executives have met with staff of the Carbone Cancer Center at the University of Wisconsin-Madison — a sign of how far the economic ripples of a deal with the company might eventually extend.
Cancer research is a major priority of Foxconn Chairman Terry Gou, who lost his first wife and younger brother to the disease. He has reportedly donated hundreds of millions of dollars to cancer research and treatment through the National Taiwan University, which already has a strong connection to Wisconsin.
Ann-Lii Cheng, director of Taiwan National Taiwan University’s cancer center, is a former fellow at the UW cancer center.
Multiple sources confirmed that Foxconn executives and Carbone center officials have met to get acquainted and discuss potential areas of collaboration
Michael said: "Rick -That government subsidy will pay off in multiples. As we have seen here in the south attracting auto plants provide jobs but also require all sorts of other supply businesses, support businesses etc. The interstate corridor along I-85 near the BMW South Carolina has boomed with new business. Ditto eastern Chattanooga near the VW plant and on the Georgia/Alabama border at the Kia plant. All were attracted by govt goodies. All are paying off."
Michael is exactly right. 50 years ago Tennessee had almost no auto manufacturing at all, assembly plants or suppliers. Now, we have Nissan in Smyrna, GM in Spring Hill, and Volkswagen in Chattanooga. All these plants have drawn supplying plants into the same region, many from Asia and Europe, such as Denso, Bosch, Bridgestone, and many others. 85 of the 95 counties in TN now have one or more manufacturing plants supplying the auto industry and the state is now one of the leading auto industry states. Same can be said for AL (Honda, Hyundai, Mercedes), GA (Kia), SC (BMW, Volvo), MS (Nissan, Toyota), and TX (Toyota).
Rick
Sorry, but it is true. The auto makers would not have come for the weather and low col. They came for the subsidies and stay for the weather and the col. This is not a matter of guesswork, you can look at economic data for any of the three areas I referenced both before and after the plant openings. From a recent article in Chattanooga: "The economic impact is much bigger than what happens at the very local level," Wood said. "The idea goes back to a rising tide lifts all boats."
He said that not thinking regionally has been a weakness as Chattanooga competes for economic development projects.
Nashville, for example, markets itself as a 10-county region, the Chamber official said. On a smaller level, a three-county effort around Starkville, Miss., has attracted $6 billion in investment, Wood said.
"We have to recognize that's who we're competing against," he said.
Wood said economic development officials from Chattanooga, Cleveland, Tenn., and Dalton, Ga., already have spent some time in Germany recruiting companies. Volkswagen's plant in Chattanooga and Wacker's factory in Cleveland were both $1 billion projects, and Wood said Nokian's investment could eventually equal that figure with expansions.
Nokian North American President Tommi Heinonen said earlier this summer it plans to build "the most modern tire factory in the world." Officials have said Nokian could eventually hire 1,000 people if it makes the commitment to build added phases.
"companies save much more on pay and union costs than they do on taxes."
The Japanese car makers that located plants in the south expected them to be union. They were surprised that the unions lost all the elections.
GE relocated here because all the technical talent...
GE moved to Boston because of Connecticut's prohibitive corporate and personal tax rates and because Boston is willing to put out with tax breaks and infrastructure improvements to attract them. Also because Schenectady is kind of a shit hole.
Don't forget about the nets that are strung around the place two catch two people trying to commit suicide by jumping from the top of the building
Free market jobs are so passe. Govt jobs are where it's at to raise the standard of living. Filled with brilliant _____ Studies majors adding untold value to the economy.
I loved loch ober.
Inga, et al, reminds me of being in high school social studies class about 45+ years ago. The prediction was that some day we would see the area from Mequon (north of Milwaukee) all the way down to Indiana being one continuous band of urbanization. I think the loss of the big smokestack industries slowed that down. But looking at Google maps, Oak Creek (at the Milwaukee County line)and Racine and Kenosha are separated by about 3 miles of open space, Kenosha to Zion is 5 miles, and after Zion it is pretty continuous after that. Expect to see a lot of in-fill development in those areas.
GE's headquarters were in Fairfield ct
Rick:
Then the free market solution is to reduce it for everyone.
Ideally. Or to tax everyone at the same rate, but based on what unit of measure?
They should pass a law requiring Facebook to move to Detroit.
It would be a win win for everyone.
Someone mentioned South Carolina:
My wife and I were just there last week. Flew to Charlotte, drove to Charleston, across to Greenville and back up to Charlotte. Beautiful state, beautiful people and beautiful food (A Waffle House at every exit)
Lot of industrial activity. We visited Newberry and they have Madison's Oscar Mayer plant with about 1700 employees. Also Komatsu and Caterpillar with a couple hundred each.
Then, just north of Greenville, there is the huge BMW plant turnign out 1400 cars per day, many (maybe half?) for export. 8,000+ employees. Also lots of other plants all along the interstates and off the interstates all over SC.
In addition to building the cars in SC, BMW also buys the steel to build them in the US from Nucor. Not sure if the SC plant supplies them but one of Nucor's plants does.
SC is a really happening state, industrywise.
If you go to Charleston, check out the Marina Variety Store Restaurant at the Marina. Don't let the name fool you, it is a full restaurant upstairs from the actual store. The best seafood dinner I've had in a long, long time. My wife and I had everything and still got out for less than $50 including tip.
John Henry
GE HQ Boston (a rather small facility) has the HQ sorts, i.e., "management" and similar types, corporate communications, HR, legal, marketing (some), and of course anyone who has anything to do with government relations, that are not actually in Washington.
In other words, drones, parasites.
Actual engineers? not many.
Actual brains (in the US), some are in Niskanuya NY (GE Global Research)
Nuke is in Wilmington NC, Turbines are in various places including Schenectady NY; etc. Scattered by line of business. The brains are in the places where things are done.
Some things to realize about Foxconn:
1) It is not a Chinese company. It is a Taiwanese company with huge manufacturing operations in China.
2) It is a "contract manufacturer" It does not make any products of its own, AFAIK. Its business is manufacturing stuff under contract for "brand" companies like Apple.
3) As a contract manufacturer, it designs its plants for flexibility because it never knows when someone else will want it to make something. So the plant designed to build I-Phones can likely be retooled (changed over) to make pretty much any other electrical or eltronic product.
4) Foxconn is unlikely to buy any components overseas that they can source locally in the US. This should be a boon to a plastic molder (cases), Corning (glass screen), converters (for the boxes), paper companies (for the documentation and for the board to make the boxes) and a thousand other suppliers. Some will be in Wisconsin. Others will be in other parts of the US. Some of those will build plants in WI to service the Foxconn plant.
I suspect that there will be 3-4 other jobs created in addition to each Foxconn direct job.
If Apple decides to bail, Foxconn can make microwaves or toaster ovens.
I think this is a huge deal for the US and especially for Wisconsin.
Congratulations.
Apple has all that stranded money overseas. That has to be a consideration.
Trump gets taxes cut to 15% and all the money comes home.
In the form of jobs and plants and products.
Blogger PB said...
Don't forget about the nets that are strung around the place two catch two people trying to commit suicide by jumping from the top of the building
Oh bullshit, PB. Not on the nets, they do exist. But bullshit on the rash of suicides.
Foxconn employs 700,000 people there. Almost 3 Madisons worth.
They've had 14 suicides. That is a rate of 2/100,000 over 4-5 years or less than 1 per year per 100m.
I'll bet that Madison's suicide rate is some multiple of that.
John Henry
Yes, I'm Inga, no I'm not Trumpit. said...
And Drago, Titus grew up in Central WI, no where near Kenosha or Racine. I grew up in Milwaukee and have been to the gritty
little cities of Kenosha and Racine many times. Both cities have a lot of Chicago transplants.
7/26/17, 4:01 PM
No, Inga, you're a German immigrant, you said so yourself. Can't you keep your own lies straight?
Bad LT.
I was born in Austria, not Germany. My family came to the US in 1955 as displaced persons from Yugoslavia, when I was three years old. Milwaukee was our choice because my father's uncle who lived in Milwaukee since the turn of the century, sponsored us. Is everything clear now?
See? She's the less-dumb replacement for UNK#51.
Let's see you kiss Pedro's ass again.
For the good times.
They come in spurts.
But first... yuck, ick
Ol'#55.
Dipshit.
I'm glad Soros-training is so effective.
Titus said...
I grew up 5 miles from Madison ingy while not urban more populous than Racine or Kenosha.
Waunakee, WI is not "5 miles from Madison." Why would you exaggerate like that to "Ingy"? She's on your side.
I love that well paying jobs are coming back to Wisconsin. And it's great that places like Boston lose out. A case I help litigate several years ago involved some sleazy chemists from Boston who appropriated a Midwestern inventor's work. The thieves lost, natch, and had to pay millions and millions back to the salt-of-the-earth inventors.
MAGA
So they're going to create the modern equivalent of a West Virginia coal mining town, right in Wisconsin. That's a little creepy.
"Ingy" is a good handle for you. You should keep it for a while.
Kenosha gave us Snap-On Tools and Orson Welles. Racine had interesting rock quarries. Plus only people from Wisconsin know how to pronounce "Racine."
Great videos, Ingy!
My grandfather would tell me that some of the Milwaukee dialect came from the German immigrants, particularly how they would end a sentence with "once," just as they would say "ein fasse" in German (I hope I spelled all that correctly, the translator is not clear). They would also use German grammar rules in English. We saw a cartoon mocking the dialect in the Sentinel years ago, and it showed a farmer saying to his son, "Trow da cow over da fence some hay once!" And for years after we would say that to one another.
@Bricap: More Milwaukee German idioms here
Thanks, Chickelit. Bend the corner! I forgot that one. My grandmother always said "Ach!" but it was pronounced like "back," not like "achtung." She grew up in the UP. I don't know if she got it from there, or from living around Milwaukee from the 1950s on. The phrase "go by (my aunt's) house" extends beyond Wisconsin, I think. I grew up in AZ, and there were a couple of brothers down the street from me who would always say they were going by someone's house. Their parents were Midwesterners. One was from western Illinois, and the other was Polish background from Ohio.
We just have to keep those verdammt Illinois people away from them.
FIBs?
Why is it that leftists have to shit on anything positive? (Regarding the above comments).
How is creating jobs a bad thing? Regardless of what taxes the company doesn't pay (why not just pay zero taxes?). It's not like the government is actually going to use that money to support any infrastructure.
The above leftists are just hateful people. Maybe they don't realize it. Always looking in someone else's dog bowl.
"parcels that initially weren’t contiguous,"
Something's off with that phrase.
if two parcels of land aren't contiguous, you can't move them around like puzzle pieces, yet the phrase implies that the are now, or will become contiguous. Maybe they misunderstood the term "contiguous" and merely meant to say that they weren't part of a unified parcel, although they were bordering one another (which would be the actual definition of "contiguous")
R.e. South Carolina:
It is also, generally, non-union. While a lot of those jobs don't require a higher education, they do require some skill and ability to learn.
Wages are good, regardless of what the unions say (where you pay more for less work). Nucor has (presumably still in place) a rather unique pay structure where the majority of pay is bonus. Works well, and makes a lot of sense.
Yes, this was on the front page of the State Journal today. And in the Letters section? This laughable gem.
Link. The first line is especially good.
"If Trump lowers the cost of employment that is when things will really turn around. Everyone is hiring but wages are going up too slowly. They need to make new employees affordable."
The way to make new employees affordable, the way to lower the cost of employment, is to reduce wages (as well as to reduce or eliminate other benefits that might normally be part of the worker's compensation package, such as paid sick days, paid leave days, overtime pay, employer contributions to 401K plans, etc.).
The result will be not just "wages...going up too slowly," but wages dropping. Just think how swiftly we could suck jobs away from China and India if we started slashing wages to levels below theirs! Who could lose? (Other than we, the workers!)
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