Foxconn to partner with Rockwell Automation

Foxconn has already announced a partnership with a major Milwaukee-based employer: Rockwell Automation.

But observers say more partnerships with companies like Johnson Controls and GE Healthcare are likely to happen as the Taiwanese company finds its footing in Wisconsin.

In one such agreement, Milwaukee-based Rockwell Automation will be collaborating with Foxconn to “increase operational efficiencies in electronics manufacturing to new levels,” Terry Gou, Foxconn chairman and CEO, said in a statement.

The two companies will be working together on workforce development and training. Foxconn says it has committed to work with Rockwell Automation and ManpowerGroup to provide skills training for military veterans.

Blake Moret, Rockwell Automation president and CEO, says Foxconn shares Rockwell’s commitment to “expanding and upskilling the U.S. workforce to ensure there is the necessary talent for advanced manufacturing roles.”

The partnership with Rockwell Automation “makes the most logical sense,” according to Mark Sailer, a financial analyst with KLCM Advisors in Milwaukee.

“Foxconn uses their stuff in China as it is,” he said. “It’s a no brainer; not surprised by that one.”

Sailer says Johnson Controls will likely win business with Foxconn, speculating that the trucking company Schneider Transport and contract manufacturer Plexus also could be likely partners.

Enno Siemsen, a UW-Madison business professor and director of the Erdman Center for Operations & Technology Management, said the potential is there for Wisconsin companies to partner up with the major electronics maker, but there are no guarantees.

“My sense is yes, there will be opportunities to compete on supplier contracts and become partners,” Siemsen said. “But Foxconn will have other options; they don’t have to do this. It will be a competition.”

GE Healthcare said in a statement that it’s “delighted to welcome Foxconn to Wisconsin.”

“As part of a broad group of Milwaukee business leaders, we were happy to recently host Foxconn and Governor Walker for a high-level introduction to our company,” the statement says.

A key part of understanding the potential economic impact of Foxconn, Siemsen says, is to see how much of the value added is actually going to be in the state.

In some cases like this, he said, plants will come to an area but will then build from components shipped from all over the world.

“Then, the value added is very small,” he said.

In others — such as with automotive plants in the southern U.S. — suppliers are often located nearby, so the value added is actually in the local area, he said.

“There isn’t a hole lot of info that clearly tells us how it will unfold,” Siemsen said. “Those details will emerge… Foxconn probably has an open mind on how they approach this.”

Siemsen thinks it could go either way, depending on how proactive various entities are with seeking new partnership opportunities.

“If we don’t demonstrate competitiveness, they will be shipping in components. Very little value added,” he said.

On the other hand, if value is evident in the local workforce, that will lead to more of the supply chain moving to the state and a “tremendous” economic boost, he said.

“The plant could be a starting point for something big, and that’s what we should aim for,” Siemsen said. “We want Foxconn to invest in state, to have suppliers in the state, but they’re not going to do this out of the goodness of their hearts.”

–By Alex Moe