Foxconn In Wisconsin: Good News And Bad News [View all]

[Initech]

Foxconn Technology Group Chairman Terry Gou announced from the White House Wednesday that the company will spend $10 billion to create a Wisconsin plant that will create many display panels and jobs. That sounds great but represents both good news and bad news.

Let's start with the good news.

First, the deal will create thousands of jobs. Foxconn said it will create 3,000 jobs over four years with the potential for 10,000 more. Wisconsin Governor Scott Walker more optimistically said it would create 13,000 jobs. So the number of jobs is uncertain, but even the conservative estimate means thousands of new jobs for Americans and that — especially in the beleaguered manufacturing sector — is a good thing.

Second, President Trump campaigned on reviving manufacturing in America and bringing jobs home from overseas, and Walker has campaigned on helping blue-collar workers. So the deal would clearly be a big win for both of them, and an even bigger win if Foxconn builds additional facilities in the U.S. and other companies follow their lead.

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Second, as the Washington Post reported Tuesday, lawmakers and other concerned citizens in Wisconsin are concerned that the state may give away too much in incentives to attract Foxconn. Those concerns are heightened by the facts that Walker is up for re-election next year, has a low approval rating, and has run as a job-creator.

Third, it is uncertain whether the promised jobs will be stable and pay a living wage. As for job security, both the BBC and MarketWatch reported in May 2016 that Foxconn had replaced 60,000 of its workers with robots.

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Foxconn is also known for a work environment so harsh it led to employee riots and suicides. The Fair Labor Association — a non-profit formed by Nike and others in 1999 after a series of sweatshop scandals — documented in 2012 major labor-rights violations at Foxconn facilities including excessive overtime and salaries that were too low to cover basic living expenses and sometimes not paid.

http://www.cnbc.com/2017/07/27/heres-whats-worrisome-about-foxconns-plan-to-build-a-plant-in-the-us-commentary.html

That last part is the most worry some.