Michigan appears to be a good bet to land a sizable chunk of the massive investment a Taiwanese tech company is making in the United States. Reports, still unconfirmed, from the Asian press that Foxconn Technology Group will build a multi-billion research and development facility here affirms the state’s adoption of a tax incentive program to lure large job creators.
Should Michigan land the center, which Foxconn says will focus on autonomous vehicles, it will help cement the state’s position as the intellectual capitol of the automotive and mobility industries.
That’s worth a lot more long-term even than the jobs attracted by the tax breaks.
Foxconn, if it comes, will be eligible for a piece of the $200 million the state is making available for up to 15 qualifying companies at any one time. If they meet job-creation and worker wage requirements, Foxconn and other companies could keep some or all of the income taxes their new employees would otherwise pay to the state.
It’s a contained and modest incentive package, yet it is likely key to bringing in Foxconn. And the broader benefit is that it applies to more than one company; Michigan won’t have to craft individual packages for every business it is hoping to lure.
And compared to what Wisconsin is prepared to ante up to win the biggest Foxconn prize — a $10 billion plant that initially will employ 3,000 — Michigan looks like a savvy shopper.
Wisconsin is losing all perspective in pursuing Foxconn. The state’s Legislature is preparing to vote on a $3 billion package to seal the deal on the digital screen plant, that the company promises could eventually add another 10,000 workers.
Even if it meets those optimistic employment projections, critics say it will take 25 years for Wisconsin to break even on its investment.
Michigan could get a major Foxconn operation, at a fraction of the cost.
And the R&D facility would bolster a critical automotive segment for the state. Billions will be spent in coming years to develop self-driving cars. Michigan is competing with Silicon Valley and a number of other places to dominate such development.
A center as large as the one Foxconn proposes would help draw other facilities, as well has the high-skilled workers the budding mobility industry demands.
Should Foxconn bring the R&D center here, the state would also be in better position to compete for yet another piece of the company’s U.S. investment: A plant to make small screens, primarily for automobiles.
The synergy between an automotive research operation and an auto parts factory are obvious. It makes perfect sense for Foxconn to twin the two in one Michigan location.
Gov. Rick Snyder courted Foxconn by playing up the state’s strengths: its proximity to the world’s major automakers and a healthy supply of engineering and technical talent. The tax incentive package gave him a sweetener.
That’s a better approach than mortgaging the state’s future to pay for today’s jobs.