Foxconn’s choice of southern Wisconsin for their first major American manufacturing plant is fascinating to me as someone who has seen the Midwest absolutely battered by Chinese competition for the last 25 years.
The days are gone since Foxconn in China slung nets under the windows of the dormitories where its young employees resided to catch the suicidal workers, so depressed after a brutal day of assembling iPhones. Now Foxconn is confident enough of its manufacturing prowess and managerial acumen to stick a giant factory in a Wisconsin cow pasture and recruit its workers from the broken down, bankrupt towns in the neighborhood like Beloit, Kenosha, and Rockford, Illinois. Not that there are not vexing problems related to worker depression in the semi-rural Midwest. Opioid addiction and alcoholism are rampant, and nets will not help them there.
So why would Foxconn choose southeast Wisconsin? Perhaps the biggest reason is Chicago. They get exurban Chicago at a huge discount. Chinese management will be able to fly into O’Hare and get to the new plant in an hour, but everything will be cheaper in Bristol, Wisconsin, than close to the airport. They are following the Amazon play book.
Amazon is building giant fulfillment centers west and south of Chicago. They staff these 1,000,000-square-foot mega plants with $13-per-hour people who come and go depending on how fast Amazon runs the conveyor belts.
Amazon has proved that you can recruit thousands of workers in a short period of time, work them hard but fairly, and retain enough of them to justify building more plants in the Chicago metropolitan area. Access to arterial highways is essential for Amazon, and it will be for Foxconn, too.
Amazon and Foxconn will challenge virtually every employer in the Chicago/Milwaukee area and lift the threshold for wages. Amazon offers health insurance and tuition subsidies after one year on the job. Employees will make $13 per hour, the new minimum wage for able-bodied, modestly intelligent people who will work hard. It will be interesting to see whether Foxconn will make stringent drug testing a condition of employment. My research indicates an oral swab at the preliminary interview is Amazon’s entrance test with random testing on the shop floor.
Why is Foxconn going to manufacture in the United States? I think it is partly political; putting a plant in Paul Ryan’s district that voted for President Trump makes sense, short term. Being close to its American customers can’t hurt. Stashing money outside of China is a good hedge for Foxconn’s bosses. And it’s hard to resist amber waves of grain.
What do you think?
Question: Should companies drug test?