Foxconn Technology Group is best known for its Chinese factories that make components for iPhones. In the electronics industry, it is the world's largest contract manufacturer (making parts for and assembling customers' branded products), employing about a million people in China. Reversing the trend of companies finding low-cost labor in China, the Chinese company has announced plans to build a factory in Wisconsin. The state offered the company $3 billion in financial incentives if the company meets targets for number of employees, wages paid and dollars invested in the state. Foxconn expects to hire 13,000 employees and invest $10 billion. However, the initial plan, to build liquid crystal displays (LCDs) quickly changed to smaller displays, requiring fewer workers and a smaller facility.

One of the reasons for the move for Foxconn was the anticipation of continued tariffs on imported goods from China, and a US facility would avoid that extra cost. On the other hand, a healthy economy, which results in low unemployment, meant that Foxconn soon encountered a shortage of workers for its facility. Management then quietly explored the option of importing Chinese engineers to fill the open positions.

Threats to its task environment include a softening demand for iPhones, which means Apple may not purchase as many components in the future. Another benefit of the Wisconsin connection for Foxconn is that Wisconsin is the largest US producer of ginseng, which is primarily exported to China. Foxconn plans to take advantage of their presence in Wisconsin by entering and modernizing the ginseng growing business. That move may not only yield profits but also enhance Foxconn's reputation as a good corporate citizen in areas where it operates.

Foxconn Takes a Chance on Wisconsin Foxconn Technology Group is best known for its Chinese factories that make components for iPhones. In the electronics industry, it is the world's targest contract manufacturer (making parts for and assembling customers' branded products), employing about a million people in China. Its biggest manufacturing facility is in the Pearl River Delta, an area that is China's manufacturing powerhouse. There it makes products for Apple, the Taiwan-based company's biggest customer. While many US. companies have found low-cost labor in China. Foxconn has recentiy reversed that story by announcing plans to build a factory in southeastern Wisconsin, in the town of Mount Pleasant. The state government offered $3 billion in nancial incentives if the company meets targets for workers hired. wages paid, and dollars invested in the state. Foxconn said it expects to invest $10 billion and hire about 13,000 employees, including factory workers, engineers, and support staff. It aims to have the plant up and running by 2020. The original announcement was that it would make large liquid crystal displays (LCDs), but the company later amended the plan to produce smaller displays instead,thus requiring a smaller facility, a smaller investment, and fewer workers. The political context for Foxconn's move has made the decision attractive in several ways. One is that Wisconsin's then governor, Scott Walker. was enthusiastic about bringing jobs to the state. He pushed for the incentive deal. which critics have described as overly optimistic and expensive (he later lost a bid for reelection). Still, Foxconn's promises to support education and help build a technology hub in the Midwestiincluding funds for \"innovation centers," R&D facilities in the Wisconsin cities of Eau Claire, Green Bay, and Racinegave a shine to the company's reputation and won the company support for the deal. Another political factor has been the Trump administration's concern about Chinese imports. Opening a facility in the United States helps Foxconn limit the amount of product subject to tariffs on goods made in China. Of course. China's government, too, is a part of the political environment, and it is pursuing ambitious plans for moving its industries away from low-priced items to highetechnology, highevalue goods. The Chinese government is not reluctant to spend money to make the country a leader in robots, electric vehicles, and other products of the future. As companies shift their low-end work to lower-wage countries such as Vietnam, government subsidies are helping them develop their manufacturing of higherend products to sell locally or exportto Europe, if not the United States. W Ironically. a booming economy could pose an economic threat to Foxconn's plans for operating in Mount Pleasant. The unemployment rate in the United States is low overall, and it is even lower in Wisconsin [just 3% in a recent month). This is making it difficult to nd enough qualified workers, even without the Foxconn factory in the area. Foxconn began interviewing US. workers in Wisconsin, but talk eventually spread that the company was having trouble finding enough interested engineers and might need to persuade some of its Chinese employees to transfer to the U.S. factoryrumors that management downpiayed. Looking at longterm demand for labor, Foxconn has been working with local educational institutions to prepare students for careers in hightech manufacturing. Threats also exist in Foxconn's task environment. Even as managers were planning the company's expansion in Wisconsin, they were looking to what they viewed as a challenging year ahead. Among those challenges ls less robust demand for new iPhones, suggesting that Foxconn's biggest customer might not buy as many components in the future. Foxconn reportedly set out to engage in cost cutting and downsizing in order to weather the slowdown, but publicly, Foxconn's position is that it is moving ahead with its plans for Wisconsin. _| A less-noticed aspect of Foxconn's move into Wisconsin involves a personal connection related to a crop that is mostly exported. Paul Hsu is a farmer who grows ginseng in Wisconsin, which has excellent climate and soil conditions for the root crop that people, especially in Asia, value for medicinal qualities. Most U.S. ginseng is grown in Wisconsin and sold in Asia, so Chinese consumers of herbal remedies associate Wisconsin with ginseng. While Hsu was traveling in China, he met Foxconn CEO Terry Gou. That meeting provided the seed for another Foxconn investment: modernizing the ginseng business in Wisconsin with crop and processing technologies. Why ginseng? One possibility is that making this cross-cultural link to Wisconsin agriculture will bolster Foxconn's reputation as a company that plays a valued role in the communities where it operateseven communities halfway around the world from its headquarters. Questions for Discussion 1. What forces does thls case describe operating In Foxconn's global environment? 2. In light of the threats and opportunities described in this case, do you think Foxconn's plans to open a facility in Wisconsin will help it compete? Why or why not? 3. The trend toward globalization gave Foxconn a major business opportunity to be a supplier of technology, especially to Apple. To the extent that political forces have recently led to tariffs and other barriers to trade. what impact on Foxconn would you expect to see (or have you seen)