Foxconn Technology Group's estimated $10 billion investment in a sprawling 22 million-square-foot manufacturing campus in southeastern Wisconsin could be an opportunity for the state's injection molders.
Approximately $4.26 billion in annual supply chain spending is potentially up for grabs and about one-third of which, or $1.4 billion, would be sourced within Wisconsin, according to estimates from consulting firms Ernst & Young LLP and Baker Tilly Virchow Krause LLP.
Taiwan-based Foxconn plans to build North America's first liquid-crystal display (LCD) panel manufacturing facility in Racine County's Mount Pleasant — or, rather, the "Wisconn Valley" region, as dubbed by the state. Construction on phase one kicked off in June.
The company's LCD screens are used in everything from iPhones and computers to televisions and vehicle dash panels.
The giant electronics products maker promised Wisconsin it would also hire 13,000 employees, despite current reports of a tight labor market forming a barrier to recruitment efforts in addition to Wisconsin's low unemployment rate.
"That's a concern for all employers today," Greg Fritsch, CEO of Pewaukee, Wis.-based PM Plastics Inc., said in a phone interview. "We are at full employment. We struggle with that."
The high-volume custom injection molder is part of the PM Plastics Group, which includes Moraine Plastics in West Bend, Wis., and Nitschke Mold & Manufacturing about 20 miles south. PM Plastics has injection presses with up to 1,000 tons of clamping force.
Regarding the Foxconn project, Fritsch said the company is always looking for new customers and new opportunities to grow the business, but a 13,000-person-strong workforce at the Mount Pleasant campus could put an additional strain on human capital for the state's manufacturing industry.
"That's going to put pressure on us and others like us in terms of not only attracting people to come work with us but retaining those people with good benefits packages and higher wages," he said.
But despite the uncertainties and unknowns, it could be hard for local manufacturers to ignore the new neighbor in town as buzz around the project begins to crescendo.
"I think the general feeling is when a potential whale swims into your pond, everybody is excited about it," Fritsch said.
While it's way too early to know the full impact the Foxconn project will have on Wisconsin injection molders, companies are taking steps to stay informed and making necessary adjustments to their businesses to get in line for what could be intense competition and opportunity down the road.