Experts say Foxconn deal looks promising, though unknowns remain

Business experts in the state say the Foxconn deal looks promising for Wisconsin, though some details have yet to be nailed down.

Tom Still, president of the Wisconsin Technology Council, says there’s “lots of reasons” that the $3 billion incentive package being offered to Foxconn will be worth it in the long run.

He points to the large number of expected jobs, which will not only boost income taxes but will also generate related economic activity.

According to the fact sheet from the Walker administration, 13,000 workers will eventually be employed at the Foxconn facility, while 22,000 additional indirect and induced jobs are expected as well. Still says the additional jobs figure could be an underestimate.

Doug Fisher, director of the Center for Supply Chain Management at Marquette University, says the news is “incredibly impressive.”

With many American companies chasing low-cost sourcing elsewhere in the world, he says this big project being located here in Wisconsin is unique, but makes sense given the state’s rich manufacturing history.

“You don’t hear too many stories like this,” he said.

In China — which has grown its numerous manufacturing clusters by leaps and bounds in the last few decades — business models are all about scaling up, Fisher said.

“They locate the workforce near where they will be working — not a bad model at all,” he said, adding that he’s heard talk of living spaces for workers being constructed near the Foxconn facility.

Fisher says although certain details are scarce, his gut reaction tells him it’s a “really positive thing.”

He says he’s not skeptical about the plan because “Foxconn is incredibly smart. I have to believe they’ve done their homework. They could not be doing this with a high degree of risk.”

And risk on Wisconsin’s side of the deal is low as well, Still said, adding that “in order to get a dime, Foxconn will have to invest a dollar.”

He said the way the incentive package is structured, Foxconn doesn’t get the credits until it invests the necessary amount of capital and hires enough workers.

“In general, it will be a game changer for the Wisconsin economy,” Still said. “So many supply chain possibilities, possibilities for emerging companies to be a part of this. It’s going to have a ripple effect throughout the economy.”

–By Alex Moe