>> In tonight's closer look, we go to Beijing.
That's where we caught up with an economic development expert
in China who advises clients
on foreign technology strategy and acquisitions.
He is very familiar with Foxconn and its chairman.
He's also very familiar with Wisconsin,
having attended college and law school here.
Also working here for many years, including
as chair of the Wisconsin International Trade Council.
In a Skype interview, we started by asking Einar Tangen
his reaction to Wisconsin landing Foxconn.
>> I think it can be treated, if it's going to be forward,
as an opportunity.
The corridor between Milwaukee and Chicago
has been too long overlooked.
It could be the next site of a very,
very good tech corridor that could help
both Wisconsin and Illinois develop their attributes.
This is a wonderful area.
We'll see how it develops.
>> Do you think Wisconsin has the technologically trained work
force for this kind of operation?
>> Not currently, but you do have resources.
Quite frankly, I would advise that Wisconsin get together with
Illinois on this particular project because a lot of people
from Illinois are going to be filling the gap
that exists in these areas.
These are areas where, you know, traditionally blue collar
industries, some tech, but very, very small,
certainly not enough to fill the gap here.
I would expect people coming up from Illinois,
northern Illinois, coming there to work.
Illinois obviously has a very large tech corridor between the
universities in Wisconsin and Illinois.
I think there would be enough to fill the pipeline for a factory
like this.
>> You said you thought Foxconn would have expected closer to $5
billion in incentives to locate in Wisconsin.
Even at $3 billion in incentives that the Governor Walker
is announcing, in your mind,
is that a good deal for taxpayers and citizens?
>> Depends how you look to at it.
I think the average person will decide that no,
this probably is not a good deal.
They see the enormity of all the issues
going on with finance, health care, etc.
This is -- remember, a very region-specific benefit.
The idea that the state is going to support this area is going to
be a hard pill to swallow for those in maybe perhaps northern
Wisconsin who see very little of this kind of activity
and they are going to wonder why this money is being spent.
On the other hand, the business community will probably see this
as a long-term opportunity.
There will be real estate development.
There will be fortunes to be made.
There will construction.
There will be a lot of activity, perhaps economic multiplier
that justifies this.
>> As for Foxconn's business model,
its labor costs and worker conditions in China or
elsewhere, how does that translate to Wisconsin?
It's obviously very different here.
>> Yes. If you look at the other countries,
7 to 9 countries depending on how you want to count it,
that they are in,
low labor costs tend to be the common denominator.
Wisconsin, obviously is not going to be that.
>> Now, more specifically we've all read about conditions being
so bad at some of these Chinese factories that Foxconn had
employees dying by suicide.
What should we know about concerns over that kind of
extreme, that people are now raising?
>> Well, I think it would be very difficult to kind of have
the company town mentality that they had perhaps in China.
That, I think, was what drove a lot of these people.
These were mostly migrants coming from small rural villages
in China.
Perhaps a lot of shock involved there, a lot of overtime,
very closed system, very, very difficult.
But Terry is a very, very savvy businessman.
He's a guy who's going to watch very carefully
where the signs are.
I think the fact he has chosen Paul Ryan's district
is an indication that he is a very savvy businessman who
understands how politics works.
It has helped him in China and all of the other countries that
he's been involved in.
He does it at a very high level. He does it very well.
I don't think he'll be looking to antagonize people
in the United States.
I think he understands the conditions here
will be quite different.
You must pay overtime.
You must obey the rules.
>> As to the politics of this decision on the part of Foxconn,
clearly President Trump has declared
he wants things made in America.
Is Foxconn concerned enough about tariffs
cutting into profits that it's getting ahead of that,
and working to please the president by going into
a battleground state like Wisconsin?
Do the politics extend that deeply into this?
>> I would say absolutely.
Terry is very, as I said before, very, very savvy.
He's not going to miss a trick.
His business is so large and so worldwide
he cannot afford to lose markets.
You lose markets, you earn competition.
Right now he basically owns most of the market.
He wants to keep it that way.
This is a safety play, and it makes lots of sense.
President Trump is, as most people have realized,
very open to flattery.
He likes it when people throw around big numbers,
especially if they are promising jobs or made in America.
We'll have to see how it all works out in the end.
My guess is that this plant will not be the kind of assembly
plant they have in China, where they have tens of thousands of
workers toiling away, putting pieces together.
It's an LCD screen factory.
My guess is a lot of it will be automation
and as few employees as possible.
So yes, politics is definitely behind this.
And as I said before, I don't think it's a mistake that this
is being touted in Paul Ryan's neighborhood.
>> Some point to concerns that Foxconn made similar
announcements in Pennsylvania previously
and the plant never came to be.
Could that happen after the announcement about Wisconsin?
>> Well, it's obviously a concern.
This is a little splashier than most.
And they also have the president directly involved.
I don't know that you would want to play that kind of bluff game
with Donald Trump unless he thinks Donald Trump is not going
to be around in another, you know, year or so.
I think it makes more sense that he is interested in getting the
Trump organization on his side.
Building in America, as I said, as an insurance policy against
a trade war which is still quite possible.
>> You spoke earlier about automation in the plant,
having as few employees as possible.
But Wisconsin is talking about 3,000 jobs to start,
potentially ramping up to 13,000, plus spin off employment.
Do you think those kinds of numbers add up,
given your sense about automation?
>> I would find it hard to believe
that he would have those kind of numbers there.
I could see a highly automated factory being staffed at as low
levels as possible.
Remember, he's not actually producing a lot of his
components that are going into these LCD frames.
Those are going to be done elsewhere.
The glass, the boards, things like that.
I don't know exactly what they're going to be producing
there but it's not going to be all done on premises.
Therefore, you'll have a tremendous amount of suppliers.
They'll be people in shipping, things like this.
So, as I said, the up side opportunity if they go forward
with this is not necessarily looking what you are going to
get out of Foxconn, which is going to be very, very little,
but looking what kind of infrastructure you can build for
future innovation and creating kind of a new tech corridor that
could be very helpful, as I said, to Wisconsin and Illinois.
>> As to infrastructure, do Wisconsin's highways and rail
lines support this operation?
>> Well, interesting enough, this could be a catalyst to a
lot of the infrastructure needed because one of the things
Foxconn is going to insist on is that they have a mature
infrastructure to handle whatever they have.
And that is probably going to mean roads,
because everything comes out of Wisconsin,
despite having the Great Lakes there,
most of it is going by road and some by rail.
So, don't be surprised if part of the package is a series,
some monies being put towards
the infrastructure in southeastern Wisconsin.
As I said, though, this is very difficult for a lot of the areas
in northern Wisconsin who kind of see this,
all this excitement and say where's mine?
Our roads aren't being taken care of, and things like that.
So I think Scott Walker and his team is going to have to go
a little ways to show how this is going to benefit the entire
state, not just a small corridor between Milwaukee and Chicago.