Foxconn development forcing change in Wisconsin

The Foxconn development is forcing Wisconsin to do things it should have done years ago, experts said this week.

“It’s causing higher education to do things we’ve never done before,” said UW-Milwaukee Chancellor Mark Mone, who’s leading an effort to prepare a workforce that’s ready for Foxconn.

“Foxconn is the starting point. Everybody will benefit,” he said, adding one result soon will be a score of academic institutions with a common portal to help drive workforce improvement. ”The key is alignment …What does industry need, and how can higher education respond?”

Roxanne Baumann of the Wisconsin Manufacturing Extension Partnership cited a “revolution of cooperation” in Wisconsin with leaders saying: “Now is the moment to level up and meet the challenge.”

David Vasko, of Rockwell Automation, said the Foxconn development is driving innovation and workforce development. “These are things we should probably be doing anyway. We are going to have to make the workers we have more productive.”

Added Mone: “Let’s take care of our own first. We can really put a lot of people in Wisconsin to work… This is a long game.”

But audience member Keenan Grenell, executive director of the Manufacturing Diversity Institute, called for diversity in the companies that will supply Foxconn. “Workforce development does not create wealth,” he said.

The panelists discussed the challenges and opportunities ahead for Wisconsin yesterday at the S.C. Johnson iMET Center in Sturtevant after hearing an economist from South Carolina review how BMW’s 1994 investment changed that state’s economy. The program, organized by and the Wisconsin Technology Council, was also a joint meeting of the Tech Council’s Innovation Network. And it was the latest in the “Navigating the New Economy” series from

University of South Carolina economist Joseph Von Nessen said the initial BMW investment of $600 million and promise of 2,000 jobs has mushroomed into 10,000 jobs and a big multiplier effect for non-BMW jobs.

“They definitely under promised and over delivered,” Von Nessen said.

Foxconn would be granted $4.5 billion in state and local incentives if the company completes its full $10 billion investment and employs 13,000.

Von Nessen said analyzing projects like Foxconn in the short-term can be misleading, as early investments can lead to exponential benefits over time.

The state decision to provide $130 million of incentives was controversial in 1994, but it’s no longer seen that way because of growth in the auto cluster — Volvo is coming to the state — and expansion into aerospace and tires. He says the true value of this kind of investment can only be seen in retrospect.

“I don’t think you can find any policy maker or business leader that would” regret the decision, he said after recounting the rapid decline of the textile industry that spurred South Carolina to woo BMW.

Von Nessen expects the Foxconn investment to lead to the development of “hidden clusters,” perhaps in medical equipment and health care. For example, he points to the aerospace and tire clusters developed in the wake of BMW, which was the common link that tied these other clusters together.

“There are all sorts of additional opportunities out there,” he said.

But, he said, cluster expansion is not inevitable. Wisconsin leaders have to be proactive, ask the right questions and make sure to address fundamentals, like workforce training in and beyond high school.

“That is the real dividing line,” he said of post-secondary education.

Von Nessen also noted a strong base for research and development is critical for maximizing the economic value of big projects like BMW and Foxconn.

For example, all BMW engines are manufactured in Germany, rather than in South Carolina. Because of that, the state is missing out on much of the business from engine production — a major part of the supply chain.

Drawing on his experiences studying the BMW plant in South Carolina, Von Nessen said the company does not displace local business activity, despite this being a common criticism of multinational corporations.

In fact, he said projects like the BMW plant and Foxconn can help local businesses by fueling demand in the region.