Molders ready to seize a spot in Foxconn's massive supply chain

​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.

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Across the state, manufacturers looking to learn more about supply chain opportunities have attended supplier-readiness sessions, which cover topics such as Foxconn's vendor evaluation process. In addition, interested suppliers, some of whom are injection molders, can create a company profile on Wisconsin's Supply Chain Marketplace, an online directory where companies like Foxconn can select and source suppliers in the state.

"Foxconn is putting a lot of emphasis on making sure businesses have a partnership mindset," Mark Maley, spokesman for the Wisconsin Economic Development Corp., said in an email.

WEDC was responsible for negotiating the Foxconn contract, a deal that includes $3 billion in tax and other performance-based incentives from the state.

Other guidelines from Foxconn include preferred certifications like ISO 9001 and strategies on how prospective suppliers are approaching supply chain technology demands, such as better supply chain transparency via data sharing and utilizing other Industry 4.0 technologies like automation, additive manufacturing and artificial intelligence.

"[Foxconn] agreed with us that it was important for us to get out with as much information as we had available to allow suppliers to prepare and kind of 'get ready' for what it is that Foxconn is going to be looking for," Jela Trask, WEDC's business and investment attraction director and key business liaison, said in a phone interview.

So far, nine supply chain workshops have been held in six regions throughout Wisconsin, with the potential for more down the road as additional information becomes available.

"Foxconn is a catalyst to get everybody moving quickly," Trask said. "Beyond even being a direct supplier, you're just going to have to up your game, period. And that's nothing but positive for all of us when it comes to economic growth."

But in the meantime, for injection molders like PM Plastics, it's business as usual. They're merely expressing interest in the project, making proper connections and, well, waiting — some patiently, some eagerly, some hesitantly — for whatever the next step may be.

Vital Plastics Inc., a custom injection molder with annual sales between $17 million and $20 million, joined the Wisconsin Supply Chain Marketplace last year, stating interest in becoming a potential supplier to Foxconn.

The company has 57 presses, with clamping forces ranging from 35-400 tons, spread across its two facilities in Baldwin, Wis., near Minneapolis.

Scott Glor, Vital's business development manager, said at this stage it's tough to know how much business the Foxconn project could bring to the company, but his goal would be between $1 million to $3 million annually. If annual sales exceeded $750,000-$1 million, he projected the company would consider a facility expansion. Job creation would be on the table at less than $500,000, he said.

Vision Plastics Inc., an injection molder with Wisconsin facilities in Elkhorn and Delavan, said being selected as a supplier to Foxconn could potentially lead to additional job creation, too. The company currently employs 150 between the two facilities.

In emailed responses, Vision's Business Development Coordinator Laura Popelier said she anticipates job growth in the manufacturing industry overall making the most impact because of the Foxconn project.

Plastic Parts Inc., which operates out of a 44,000-square-foot facility in Union Grove, Wis., just down the road from the Foxconn project, is registered on the state's supply chain marketplace. The company has attended the supplier readiness sessions, too, citing hundreds of other companies curious about the project and interested in participating in future supply chain opportunities.

The second-generation, family-owned injection molder employs about 45 and has 15 injection molding machines in clamping forces of 55-500 tons.

Without knowing exactly what kind of contract is up for grabs with Foxconn, Plastic Parts Vice President Jill Osiecki said she imagines a relationship with the Taiwanese supplier to big names like Apple Inc. would mean "growth opportunities — both short and long term."

"Foxconn's investment in our Racine County community will be transformational and will help kick-start a growing business ecosystem in Wisconsin," Osiecki said. "At Plastic Parts, we see this as an enormous opportunity for growth right in our own backyard."

Other Wisconsin injection molders, including International Mold and Production LLC, have said it's too early to comment on any specifics, as Foxconn is still getting the supply base in order and gathering net promoter scores, a methodology of ranking suppliers based on what their customers say about them.

IMAP President Leonard Koren said he has attended information sessions and submitted company information to Foxconn's third-party supply chain consultant Pendio Group.

Earlier this year, the rapid mold maker and custom injection molder announced it was relocating from Grayslake, Ill., to a 162,000-square-foot facility in Kenosha, Wis. — a decision that Gov. Scott Walker partially attributed to the state's "growing economy and possibility of working with Foxconn," according to a news release.

"I believe a rising tide will lift all boats, and the large investment in the area will generate more innovation and business," Koren said. "For any plastics supplier in the area to get a large-volume supply contract would be a great win for all of us."

The Foxconn project has been a political hot potato in recent weeks, initially with local news reports speculating about the size of the LCD screens that the company will manufacture once the site is fully operational in 2020. Observers have questioned if the company has scaled back plans to build larger screens, noting that a decision to build only smaller screens would mean a lower overall investment.

On Nov. 6, Walker lost a reelection bid to Democrat Tony Evers, and taxpayer support for the Foxconn project was among the key issues in the race.

On election day, The Wall Street Journal, citing unnamed sources, said Foxconn was having trouble recruiting engineers to work in Wisconsin and had plans to staff the plant with engineers from China.

Foxconn declined to comment for this story.