Feb 5, 201912:53 PMInside Wisconsin
with Tom Still
Global trends and markets are behind Foxconn’s possible pivot
(page 1 of 2)
Two recent news stories, seemingly unrelated to the media fire drill over the Foxconn Technology Group project, help to explain why the company could significantly evolve its Wisconsin operations over time.
The first was a New York Times story on how American-born Apple struggled to assemble its Mac Pro computer in Texas, despite its best “Made in America” intentions, mainly because of gaps in the supply chain and lack of available talent. As Apple CEO Tim Cook was quoted as saying in late 2017: “In the U.S., you could have a meeting of tooling engineers and I’m not sure we could fill the room. In China, you could fill multiple football fields.”
The second story from the Associated Press also involved Apple, which is grappling with sluggish iPhone sales — especially in China, its No. 2 customer behind the United States — and how that has affected revenues and stock prices of late. The company is now counting on more growth in a division that collects commissions from paid apps, processes payments, sells hardware warranty plans, and music streaming subscriptions.
How does the affect Foxconn and its plans for Wisconsin? Directly and indirectly.
Foxconn is a leading Apple contractor, even if assembly of iPhones and Macs was never on the drawing boards for the company’s facility in the Racine County town of Mount Pleasant. Foxconn is one of the top five tech companies in the world, yet it is subject to trends that range from global device sales to talent pipelines to trade wars.
Those trends are playing out now. On Jan. 30, a Reuters news report said Foxconn was reconsidering whether to produce LCD video screens in Racine County, touching off finger-pointing among people and politicians on all sides of the Foxconn deal.
The next day, there were conflicting reports. The first quoted a leading Foxconn official as saying the Reuters story was out of context and nothing had changed in terms of the company goal to create 13,000 jobs and invest $10 billion in Wisconsin. The second, from Nikkei Asian Review, said Foxconn will suspend work on its Racine campus and postpone work on a $9 billion display panel project in Guangzhou, China, for at least six months.