5 ways Foxconn could help Madison
Economic development experts say the Capital City should benefit from the Taiwanese company’s $10 billion Wisconsin investment.
Gov. Scott Walker and Foxconn’s Terry Gou have struck a deal that could drive economic growth in all areas of the state, including Dane County.
Photo by John O'Hara for the Wisconsin Economic Development Corp.
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From the pages of In Business magazine.
Forget for a moment that Foxconn Technology Group plans to build a massive LCD screen electronics plant more than 100 miles away from Madison in the Racine County village of Mount Pleasant, just east of Interstate-94.
Let’s not dwell on the fact the deal to bring them here was brokered by two public officials — President Donald Trump and Gov. Scott Walker — who aren’t very popular in Dane County.
Perhaps we should avoid a prolonged discussion about the nearly $3 billion in taxpayer incentives it took to lure the Taiwanese manufacturing giant to southeastern Wisconsin, an arrangement that has plenty of skeptics who worry that Wisconsin taxpayers will get left holding the bag.
Skepticism aside, local economic development officials believe Foxconn’s $10 billion investment will have beneficial ripple effects for Greater Madison — perhaps in ways that we cannot now envision.
By now, anyone who has been following the news has been told that Foxconn, a maker of liquid crystal display screens used in smartphones and potentially in technology such as self-driving cars, plans to employ up to 13,000 workers and, according to Gov. Walker, its investment also could create another 22,000 indirect or induced jobs.
Time will tell, of course, but we spoke to the following executives to get their take: Tom Still, president of the Wisconsin Technology Council, a science and technology advisor to the governor and the Wisconsin Legislature; Kurt Bauer, president and CEO of Wisconsin Manufacturers and Commerce; Zach Brandon, president of the Greater Madison Chamber of Commerce; and Jack E. Daniels III, president of Madison College.
They identified the following five ways that Wisconn Valley, as Walker calls the Foxconn development, could help Madison.
#1: A l-o-o-o-o-ng supply chain
The most significant benefit to Madison, and the state as a whole, is the size and scope of Foxconn’s supply chain. The high-tech manufacturer will likely use hundreds of suppliers across Wisconsin, and at least one-third of its expected annual spending, estimated at $1.4 billion, will come in Wisconsin.
“It’s a win for southeastern Wisconsin and therefore has an effect on the overall ecosystem of Wisconsin,” Brandon says. “That word [ecosystem] is important because the whole state is in a symbiotic relationship. As Madison does well, so does the rest of the state; if the rest of the state does well, so does Madison.”
Any supply chain is almost certain to include Dane County, Still agrees. “This is a leading technology county,” he states. “It’s one of the top two or three manufacturing counties [in Wisconsin]. It’s one of the top agricultural counties. It’s a center, a hub of transportation and logistics. So the supply chain aspect of Foxconn, especially as it ramps up, cannot help but touch Dane County.
“And oh, by the way, construction, engineering, and design. There is a cluster in Dane County that is of national significance, really, in terms of expertise.”
Bauer notes the multiplier effect of any manufacturing facility is great, and it’s even greater with Foxconn given its size — a 20 million-square-foot campus — and the products it’s going to produce. “These LCDs require quite a bit of technology and quite a bit of raw materials,” Bauer states. “There is a research and development side, there is a supply chain side, and there is vendor-contractor. Anything from materials to food service is going to be needed in a plant that large.”
By the first week of October, the WEDC’s Mark Maley reported there were 260 companies statewide that had signed up to be part of the Foxconn supply chain.
Multiple companies have approached Bauer, including some in Madison, that offer an array of products, and they want to network with Foxconn to determine whether they are a good fit to do business together. WMC plans to organize a business vendor fair to give would-be suppliers a chance to meet with Foxconn representatives, exchange business cards, talk about their company, and show what they are capable of doing.
“Foxconn is going to need a lot of help because this will be the only LCD manufacturing facility outside of Asia, and so they are going to have to start from the ground up,” Bauer says. “They are not going to want to bring things in from Asia to supply this plant. They might initially have to, but by and large you’re looking at a supply chain that’s going to be located within 50 miles or so of this facility.”