Business: Foxconn could boost state businesses.
Foxconn displays its technology
MADISON - As politicians ponder unheard of subsidies for Foxconn, they’ll have to consider not just the jobs at the company’s proposed Wisconsin factory but also at seemingly unrelated businesses around the state.
From scientists studying nanotechnology to farmers growing ginseng, businesses in Wisconsin see in the Taiwanese giant a potential investor, customer and Asian export partner. These gains could come at some businesses that aren’t connected to the massive supply chain of companies that would serve Foxconn’s flat screen liquid crystal display plant planned for southeastern Wisconsin.
Seungpyo Hong, founder of the cancer diagnostic company and Madison startup Capio Biosciences, said he met with executives from Foxconn recently and was hopeful that his company may one day benefit from a deal with the Asian electronics maker.
“They actually showed a great deal of interest,” said Hong, who sees potential for Foxconn to provide capital or work with his small tech firm in other ways. “I think it’s a little bit of both. Obviously they have deep pockets, so they are looking for investments.”
A Foxconn site in the state comes with costs: the suspension of environmental rules plus up to $3 billion in cash payments to the company by Wisconsin taxpayers over 15 years. Those subsidies are an order of magnitude bigger than any incentive package ever given to a business in the state.
The incentive package size has left critics questioning whether Wisconsin should walk away from the up to 13,000 factory jobs pledged by Foxconn, saying that the state would be giving preferential treatment to one company at the expense of others.
The deal’s supporters say the state needs to consider the additional benefits for businesses of having ties to a company with some $135 billion in revenue.
Firms providing products and services to the Foxconn plant could hire thousands of workers. And then there are the companies and researchers who might benefit without being directly connected to the plant at all.
One key area where Foxconn could impact the state is in medical research, particularly around cancer. Research into that disease is a major priority of Foxconn chairman Terry Gou, who lost his first wife and younger brother to cancer.
Capio Biosciences, a startup that recently moved to Madison from Chicago, wants to provide new diagnostic tools for tracking cancerous cells and tumors. Instead of identifying them through scans or biopsies, Capio wants to provide a quicker and less invasive method: pinpointing cancer cells in a sample of a patient’s blood.
Hong, who is Korean, said Foxconn officials told him they’re considering a major investment in biotechnology.
Lisa Johnson, chief executive officer of the trade group BioForward Wisconsin, helped set up the Capio meeting and said Foxconn has met with other undisclosed companies and groups in the state. She noted that Foxconn has many potential ways to get involved locally, from capital investments in or contracts with state companies to support for university research.
In another local connection, the head of the Carbone Cancer Center at the University of Wisconsin-Madison
recently met with representatives of the medical equipment division within Foxconn about potential collaboration with cancer researchers in Taiwan.
“I will hope and expect that there will be a give and take … such that patients in Taiwan would benefit and patients in Wisconsin would benefit,” Howard Bailey, the center’s director, said in an interview.
Gou has reportedly donated hundreds of millions of dollars to cancer research and treatment through the National Taiwan University, which already has a strong connection to Wisconsin.
Ann-Lii Cheng, director of National Taiwan University’s cancer center, is a former fellow at the UW cancer center, where he worked alongside Bailey and others. Paul Carbone, the oncologist that the UW center is named for, even helped
establish the Taiwanese cancer center and Bailey has also visited it.
As the world’s largest contract electronics maker, Foxconn already manufactures medical devices, giving the company another reason to seek connections to top health researchers and practitioners like those at the Carbone center.
Another obvious connection for Foxconn is GE Healthcare, the medical devices company with a major presence in Wisconsin. GE spokesman Ben Fox confirmed that officials from the two companies have already met.
“We were happy to recently host Foxconn and Governor Walker for a high-level introduction to our company, and a discussion of Wisconsin’s skilled workforce and continuing leadership in manufacturing innovation,” Fox said.
Technology companies aren’t the only Wisconsin businesses that might benefit from the presence of Foxconn in the state.
With 700,000 employees at his company’s plants in China, Gou has rich connections to the huge potential market for Wisconsin exports.
One group that could benefit from that is ginseng growers in Wisconsin, who have long marketed the pungent root to buyers from China and other Asian markets who prize its medicinal qualities. Those buyers include Gou and his mother.
Foxconn has signed a letter of intent with the Wisconsin Ginseng Board to help central Wisconsin ginseng growers get their product to more markets in the Asian-Pacific region. The agreement will be non-exclusive, so Wisconsin growers will still be able to work with other existing buyers.