Foxconn is cost-sensitive. How does the United States attract it to invest in building factories?

On July 26, Foxconn Technology Group Chairman Terry Gou announced at an event at the White House that Foxconn will invest $10 billion to build an LCD factory in Wisconsin, the United States. This is also Foxconn's first large-scale factory in the United States.

After Trump took office as the US President, he has always regarded job creation as one of his most important goals. Foxconn's investment in the United States will create at least 3,000 and up to 13,000 jobs in the future. Similar to the measures taken by some cities in central and western my country to attract Foxconn, the Wisconsin government also plans to provide $3 billion in tax incentives for this project. This also shows that even in today's increasingly automated industry, large-scale manufacturing companies are still an important tool to maintain the vitality of the local economy.

Unlike other companies that were strictly scrutinized and rudely rejected when they came to the United States, Foxconn's arrival in Wisconsin almost caused a riot in the local area. Previously, many states in the United States had also fought each other to the death for the "Foxconn project."

There is probably only one reason for this situation - the strong demand for labor in labor-intensive enterprises, and job creation is precisely the most important and serious issue facing the Trump administration at present.

In this context, the shrewd Guo Taiming will naturally put forward various requirements before the project is implemented, such as site, taxation, subsidies, and the most critical recruitment and training of skilled workers. Obviously, the two sides will have to negotiate for many rounds to reach the best balance point, and there may even be a perfect match between American technology and Chinese skilled workers, and new manufacturing may come into being.

The transfer of manufacturing industry undoubtedly concerns many people and also affects the jobs of many people. Someone from the American Employment Organization once described that for Americans who are eager for jobs, the two high-end panel production lines that Foxconn plans to set up are simply a piece of "fat meat" - the direct employment demand may be tens of thousands of people.

In recent years, with housing prices and land prices in southeastern coastal cities hitting record highs, it has become increasingly difficult for physical enterprises to make profits. Many small manufacturing companies in the southeastern coastal areas have either closed down or moved to the central and western regions or even overseas. However, manufacturing giants such as Foxconn are particularly sensitive to cost factors and have actually expanded their manufacturing bases in the central and western regions at the beginning of this trend.

For a long time, China's manufacturing industry was labeled as "low-end". Fortunately, since the German Industry 4.0 concept, the American Industrial Internet and the "Made in China 2025" plan were proposed, the whole society has a deeper understanding of the manufacturing industry, and manufacturing giants such as Foxconn and Gree have begun to unveil the mysterious veil. The most gratifying thing is that most local governments are significantly improving the industrial structure and realizing economic transformation and upgrading by introducing advanced manufacturing.

Take Henan Province as an example. Its export volume ranked last among the six central provinces. Although its vast land is rich in wheat and corn, a large number of its hundreds of millions of people, in addition to those who work as farmers at home, go to the southeast coast to work. However, since Foxconn settled in 2011, Henan Province's export volume has increased rapidly and has rushed to the first place among the six central provinces.

The more heartwarming change is that many Henan migrant workers across the country have gradually returned to their hometowns to work in the wave of manufacturing repatriation led by Foxconn. This not only helps to improve social problems such as "left-behind children", but also Foxconn's strict compliance with the law and efficient work philosophy have gradually penetrated into the local economy and society, providing a benchmark and example for traditional manufacturing companies.

Now, the states in the United States are also facing a turning point similar to that of Henan Province. Big cities like Los Angeles or New York will naturally not be too fond of OEM manufacturing. Their technology, entertainment and sports industries have already ensured that residents can live a good life, but industrial cities like Detroit and Milwaukee are always faced with problems such as worker unemployment and declining output value. I believe that the benefits of manufacturing will not only create thousands of jobs, but will also drive the development of industries such as catering, services and education.

Relevant data shows that the ratio of direct jobs to indirect jobs created by Foxconn in Henan is 1:1.75, which means that for every Foxconn employee, 1.75 service jobs need to be created accordingly. For the United States, where the service industry is more developed, this may even bring a higher proportion of service industry jobs. Moreover, the manufacturers cooperating with Foxconn have always been strong, and its upstream and downstream partners in the industry chain may also invest because of Foxconn's leading role.

Foxconn's manufacturing base is of great benefit to American employment. On the other hand, for industrial giants like Terry Gou, Foxconn's move to the United States naturally involves a lot of business strategies.

First of all, Foxconn has always won by scale and efficiency. The ultimate scale is nothing more than building manufacturing bases around the world to maximize the use of manufacturing resources.

As we all know, the United States is a country of immigrants. Although there are high-skilled immigrants, there are also many illegal immigrants or refugees from developing countries. These people have relatively weak employment capabilities. It is unrealistic to ask them all to seek a technical job in Silicon Valley. However, if they cannot find a suitable job, it will cause a series of problems such as public security. A large part of the jobs in the manufacturing industry require low skills, so these human resources can be integrated to the maximum extent. For this reason, Guo Taiming will naturally strive for all available resources, including investment subsidies, tax incentives, infrastructure construction, etc., and may even ask the government to directly build a manufacturing workshop to meet his own production needs.

Secondly, as a place where high-quality talents gather, the United States can change Foxconn's existing genes to a certain extent. Once the construction of the US manufacturing base is completed, Foxconn can select relatively outstanding talents from manufacturing bases such as mainland China and send them to the United States to let them learn advanced technology and management experience, thereby greatly accelerating Foxconn's internationalization process. It is also hoped that it can be further integrated into the US industrial Internet and other systems to gradually get rid of the image of a "low-end OEM".

Finally, Foxconn's largest customer, Apple, is also in the United States. Since the Obama era, the US government has continued to put pressure on Apple, hoping that Cook can move the manufacturing of Apple products back to the United States, but due to production capacity, technology, cost and other issues, Cook has always been ambiguous. Guo Taiming's move is expected to ease Apple's pressure and bring the two companies one step closer in terms of cooperation.

Some analysts believe that Foxconn's US project includes the production of small-screen mobile phones. Once production is stable, it is possible to develop a large-scale integration of shells, key components, and assembly. In other words, the Apple mobile phones in the hands of American consumers in the future may be produced in the United States throughout the entire industry chain, thereby minimizing costs.

Enterprises are often the most important organizations in society, especially some giant star enterprises, whose advanced ideas may even have a profound impact on the economy and society. For example, Foxconn has successfully influenced the development of some cities in the southeast coastal areas and central and western China.

In today's society, although we have repeatedly emphasized the need for industrial upgrading, advanced manufacturing is irreplaceable in any era. It is the only one that can continuously export daily necessities to the world and thereby slowly reconstruct the industrial structure of a region.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.