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toomanysinks · 6 years ago

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Foxconn pulls back on its $10 billion factory commitment

Well that didn’t last long.

In 2017, Foxconn announced the largest investment of a foreign company in the United States when it selected Mount Pleasant, Wisconsin for a new manufacturing facility. Buttressed by huge economic development grants from Wisconsin, an endorsement from President Trump, and Foxconn CEO Terry Gou’s vision of a maker America, the plant was designed to turn a small town and its environs into the futuristic “Wisconn Valley.”

Now, those dreams are coming apart faster than you can say “Made in America.”

In an interview with Reuters, a special assistant to Gou says that those plans are being remarkably scaled back. Originally designed to be an advanced LCD factory, the new Foxconn facility will instead be a much more modest (but still needed!) research center for engineers.

It’s a huge loss for Wisconsin, but the greater shock may be just how obvious all of this was. I wrote about the boondoggle just a few weeks ago, as had Bruce Murphy at The Verge a few weeks before that. Sruthi Pinnamaneni produced an excellent podcast on Reply All about how much the economic development of Mount Pleasant tore the small town asunder.

The story in short: the economics of the factory never made sense, and economics was always going to win over the hopes and dreams of politicians like Wisconsin governor Scott Walker, who championed the deal. Despite bells and whistles, televisions are a commodity product (unlike, say, airfoils), and thus the cost structure is much more compatible with efficient Asian supply chains than with American expensive labor.

Yet, that wasn’t the only part of the project that never made any sense. Foxconn was building in what was essentially the middle of nowhere, without the sort of dense ecosystem of suppliers and sub-suppliers required for making a major factory hum. (Plus, as a native of Minnesota, I can also attest that Wisconsin is a pile of garbage).

Those suppliers are everything for manufacturers. Just this past weekend, Jack Nicas at the New York Times observed that Apple’s advanced manufacturing facility in Austin, Texas struggled to find the right parts it needed to assemble its top-of-the-line computer, the Mac Pro:

But when Apple began making the $3,000 computer in Austin, Tex., it struggled to find enough screws, according to three people who worked on the project and spoke on the condition of anonymity because of confidentiality agreements.

In China, Apple relied on factories that can produce vast quantities of custom screws on short notice. In Texas, where they say everything is bigger, it turned out the screw suppliers were not.

There are of course huge manufacturing ecosystems in the United States — everything from cars in Detroit, to planes in Washington, to advanced medical devices in several major bio-hubs. But consumer electronics is one that has for the most part been lost to Singapore, Taiwan, Korea, and of course, China.

Geopolitically, Foxconn’s factory made a modicum of sense. With the increasing protectionism emanating from Western capitals, Foxconn could have used some geographical diversity in the event of a tariff fight. The company is Taiwanese, but manufacturers many of its products on the mainland.

And of course, a research center is still an enormous gain for a region of Wisconsin that could absolutely use high-income, professional jobs. Maybe the process of rolling out a next-generation manufacturing ecosystem will take more time than originally anticipated, but nothing is stopping further expansion in the future.

Yet, one can’t help but gaze at the remarkable naïveté of Wisconsin politicians who offered billions only to find that even massive subsidies aren’t enough. It’s a competitive world out there, and the United States has little experience in these fights.

India may put friction on foreign firms to protect domestic startups

Indian Prime Minister Narendra Modi. (MONEY SHARMA/AFP/Getty Images)

One of the major battles for tech supremacy is over the future of the Indian IT market, which is rapidly bringing more than a billion people onto the internet and giving them robust software services. I’ve talked a bit about data sovereignty, which mandates that Indian data be stored in Indian data centers by Indian companies, pushing out foreign companies like Amazon, Google, and Alibaba.

Now, it looks like India is taking a page from the Asian tiger-school of development, and is going to increasingly favor domestic firms over foreign ones in key industries. Newley Purnell and Rajesh Roy report in the WSJ:

The secretary of India’s Telecommunications Department, Aruna Sundararajan, last week told a gathering of Indian startups in a closed-door meeting in the tech hub of Bangalore that the government will introduce a “national champion” policy “very soon” to encourage the rise of Indian companies, according to a person familiar with the matter. She said Indian policy makers had noted the success of China’s internet giants, Alibaba Group Holding Ltd. and Tencent Holdings Ltd. , the person said. She didn’t immediately respond to a request for more details on the program or its timing.

The idea of national champions is simple. Unlike the innovation world of Silicon Valley, there are obvious sectors in an economy that need to be fulfilled. Food and clothes have to be sold, deliveries made, all kinds of industrial goods need to be built. Rather than creating a competitive market that requires high levels of duplicate capital investment, the government can designate a few companies to take the lead in each market to ensure that they can invest for growth rather than in, say, marketing costs.

If done well, such policies can rapidly industrialize a country’s economic base. When done poorly, the lack of competition can create lethargy among entrepreneurs, who have already won their markets without even trying.

The linchpin is whether the government pushes companies to excel and sets aggressive growth targets. In Korea and China, the central governments actively monitored corporate growth during their catch-up years, and transferred businesses to new entrepreneurs if business leaders failed to perform. Can India push its companies as hard without market forces?

As the technology industry matures in the West, entrepreneurs will look for overseas as their future growth hubs. The challenge is whether they will be let in at all.

Video game geopolitics

Nexon’s MapleStory2 game is one of its most profitable (Screenshot from Nexon) .

Korea and Japan are two of the epicenters of the video game industry, and now one of its top companies is on the auction block, raising tough questions about media ownership.

Nexon founder Kim Jung Ju announced a few weeks ago that he was intending to sell all of his controlling $9 billion stake in the leading video game company. The company has since executed something of a multi-stage auction process to determine who should buy those shares. One leading candidate we’ve learned is Kakao, the leading internet portal and chatting app in Korea.

The other leading candidate is China-based Tencent, which owns exclusive distribution rights in China of some of Nexon’s most important titles.

Tencent has been increasingly under the sway of China’s government, which froze video game licensing last year as it worked to increase content regulation over the industry. Now the question is whether it will be politically palatable to sell a leading star of Korea’s video game industry to its economic rival.

From the Financial Times:

Mr Wi added that Nexon would be an attractive target for Tencent, which pays about Won1tn in annual royalties to the South Korean game developer. But selling the company to Tencent would be “politically burdensome” for Mr Kim, given unfavourable public opinion in South Korea towards such a sale, he cautioned.

“Political risks are high for the deal. Being criticised for selling the company to a foreign rival, especially a Chinese one, would be the last thing that Mr Kim wants,” said Mr Wi.

Such concerns around Chinese media ownership have become acute throughout the world, but we haven’t seen these concerns as much in the video game industry. Clearly, times have changed.

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source https://techcrunch.com/2019/01/30/foxconn-pulls-back-on-its-10-billion-dollar-factory-commitment/

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fmservers · 6 years ago

Text

Foxconn pulls back on its $10 billion dollar factory commitment

Well that didn’t last long.

Now, those dreams are coming apart faster than you can say “Made in America.”

In China, Apple relied on factories that can produce vast quantities of custom screws on short notice. In Texas, where they say everything is bigger, it turned out the screw suppliers were not.

India may put friction on foreign firms to protect domestic startups

Indian Prime Minister Narendra Modi. (MONEY SHARMA/AFP/Getty Images)

As the technology industry matures in the West, entrepreneurs will look for overseas as their future growth hubs. The challenge is whether they will be let in at all.

Video game geopolitics

Nexon’s MapleStory2 game is one of its most profitable (Screenshot from Nexon) .

Korea and Japan are two of the epicenters of the video game industry, and now one of its top companies is on the auction block, raising tough questions about media ownership.

The other leading candidate is China-based Tencent, which owns exclusive distribution rights in China of some of Nexon’s most important titles.

From the Financial Times:

“Political risks are high for the deal. Being criticised for selling the company to a foreign rival, especially a Chinese one, would be the last thing that Mr Kim wants,” said Mr Wi.

Such concerns around Chinese media ownership have become acute throughout the world, but we haven’t seen these concerns as much in the video game industry. Clearly, times have changed.

Share your feedback on your startup’s attorney

What’s Next

More work on societal resilience

This newsletter is written with the assistance of Arman Tabatabai from New York

Via Danny Crichton https://techcrunch.com

#TechCrunch

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atrayo · 8 years ago

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Gems of Opportunity: Infrastructure Concept: Rust Belt Region Retrofitting Closed Mines

Hello All, Today's Inspirational conceptual design is meant to breathe life into the Rust Belt Region of America. To take idle or closed down mining operations be it of coal or any other mineral ore and convert it into usable real estate. Basically, reinvigorate generations of mining families not to give up their way of life entirely. Just to present it in a new light with a twist to reemploy these former miners with upgraded skill sets. What was yesterday's industry can be tomorrow's destination for something else quite different. Ever since President Elect Trump won the presidency, not unlike the Brexit vote in the United Kingdom and the election of President "Rodrigo Duterte" of the Philippines. People want good old fashioned 1950's era leadership without all the bull shit guile we use today with governance. The time for political incorrectness as blunt straight talk is reemerging for better or for worse. The pendulum is swinging back right before our very eyes like it was in America during the 1940's to around the 1960's. Dare I say not unlike how the Russians operate wanting security in governance for their way of life at the cost of some civil liberties. America's Rust Belt wants meat and potatoes without much of the foodie gentrified hoopla known for in the major cities. I may be wrong in my assertions however due to globalization the Rust Belt of America's former glory days of mining and manufacturing looks like an old western Ghost town. Just take a peek at Detriot, Michigan where the old west ghost town is practically a major city across parts of three counties. This concept as a seed of an idea isn't complete but it is good enough to consider for corporations to reinvest in this Trump era of Americana revitalized. It won't help so much the ghost manufacturing sector that is mothballed across the country. It does, however, serve idle or closed down mining operations which technically this model could be exported globally to China, Africa, Russia, Europe, and South America, etc...

I'm basically a clairvoyant writer taking inspiration from the angels via automatic writing. I have an eclectic mix of a cross section of industries with similar inspirational conceptual designs in seed summary form like in this post. Much I like to say for the next bootstrapping hustling society that is to come as the last century echo of the children of the Great Depression. Here it is the children of the Great Recession as the millennials coming of age. Much like we're repeating globally the 2nd Gilded Age which the initial one occurred during the Industrial Victorian era. These sociological shifts historically are repeating themselves globally on a macro basis as meta-trends. Those that don't capitalize from the historical global lessons of our ancestors will suffer just like them. The minority that is astute comes away like shrewd leaders and greatly enriched hopefully at no one's expense. (I know too Idealistic)

Aside from that mini rant on how I envision the things to come here in lays a gold mine opportunity (pardon the pun). Allow me to set this up by having corporations move in like carpet baggers does no good for the local rust belt mining communities. Unless such an unemployed workforce of miners that know the mine backwards and forwards is upgraded in skill sets. This is an installed local base for the corporation coming to invest in the local community. Depending on one of seven utilizations (maybe there's more than 7?) is how these unemployed miners will be retrained. State Legislators can set up block grants with the corporation picking up the rest of the tab to reskill these miners. The heartless thing to do as carpet baggers is to ship in workers from elsewhere across the country or the world.

1) The first utilization is very basic to retrofit by infrastructure of the mine by hardening it to reduce cave in's and whatnot. Which the retrained miner workforce is educated and trained in underground infrastructure hardening as the grunts. Sure the architects can be from somewhere else in the world be it in Geneva or what have you. Just the bulk of the workforce is sourced locally from such miners that for generations know that mine in particular.

Under this model the once idle or closed coal, iron, etc... mine operation is converted to an Underground Landfill or Nuclear Waste Disposal Site. Major Cities like New York City have been paying for over a decade to transport their trash by train and truck to rural communities across the country. Here is an article from July 2005 from NBC News that speaks about to this fact. These idle closed down mines are out of site Prime Real Estate to ship trash from the major cities.

The railcars are part of an armada that performs a nearly constant exodus of waste from the nation’s largest city. Each day, trains and trucks carry 50,000 tons of trash from New York to huge landfills and incinerators in New Jersey, Ohio, Pennsylvania, Virginia and South Carolina. (July 2005)

Otherwise, the Yucca Mountain, Nevada model can be pursued which cost taxpayers $15 Billion US Dollars to construct and by a cheap ass political maneuver by Democratic Senator of Nevada "Henry Reid" mothballed this entire facility like a bridge to nowhere incident for taxpayers. To compound this tragedy by canceling this project the Federal Government is now on the hook for more than the cost of building this facility to transport and store the nuclear waste upwards to over $50 Billion US. The not in my backyard syndrome even in the middle of the desert in Nevada, except for the boondoggle to build it as a local economic stimulus package. Is a nasty swindle and reaks of fraud in my book, so excuse this 2nd rant on my end.

Here is an article from the Washington Examiner from Dec. 15th, 2016 with an excerpt.

Its failure, due to political sabotage, is both dangerous and expensive. The Yucca Mountain repository, in a deserted, uninhabitable section of Nevada, was supposed to begin taking in nuclear waste on New Year's Day 1998, so that the material would not have to be stored in communities across the nation. Nineteen years and countless scientific studies later, Yucca is just a $15 billion hole in the ground, thanks mostly to ferocious opposition from the retiring Senate Democratic leader, Harry Reid.

Every year Yucca Mountain fails to take in nuclear waste, taxpayers incur billions in additional penalties to the utilities whose waste the government is not taking as agreed upon. By one 2013 estimate, taxpayers could be on the hook for $50 billion in damages by 2020, on top of the construction costs already incurred.

I can understand if a local mining community has an affront to having a nuclear waste facility underground, but otherwise, a landfill for municipal garbage is a good alternative. The only downside is to make sure that any methane gas build up over the years is siphoned out safely. So it doesn't cause an explosion, which the methane gas can also generate local tax revenue for the community as an export commodity as a green natural gas biofuel program.

2) With the exception, I made above that this concept won't help the former manufacturing sites. However, it can offer tomorrow's 21st-century manufacturer's alternative real estate as underground. Where any generated waste as a byproduct is stored underground in a secure facility. Depending on the honeycomb size of the mine a multi-tier manufacturing can occur underground. Where any emissions are sequestered and the rest emitted via silos to the surface sorta like an underground smoke stack. The finished goods are brought to the surface via industrial elevators or a conveyer belt system.

3) A Penal Correction High-Security facility can be built underground perhaps prisoners in a futuristic Guantanamo Bay prison like the one in Cuba. As high valued targets, maybe even a notorious black site. Low-risk inmates can be given privileges to exercise topside where the rest of the population never see's the light of day literally.

4) Piggybacking onto the utilization above a high-security covert research facility or other government black site can be erected. Conspiracy theorists perhaps will speculate it as another area designation like Area 51 in Nevada.

5) A temperature controlled Server Farm can be placed underground as a suitable cooling destination as a Data Haven of sorts.

6) Believe it or not, a commercial office park can be erected underground not unlike the manufacturing idea from above. Including warehousing as a distribution center for any number of companies and/or wholesalers. Amazon and Walmart come to mind immediately as candidates.

7) Lastly is the most ambitious of all the ones listed above if you can envision it. To create an underground shopping mall and a tourist destination out of such a hardened infrastructure. For example, the Cornish British peninsula is known historically for its tin mining operations going back thousands of years ago up until the Industrial era at the turn of the last century. There's a mining museum and former mine open to the general public known as the King Edward Mine Museum. Something similar in the Rust Belt region could be developed as a local and regional tourist attraction. However, with greater cajones to have the underground mine rehabbed to include a shopping mall, restaurants, etc... Access to such a facility can have a surface tram go down to the first mine level near the upper ground level. From there elevators can transport shoppers, tourists, employees deeper into the mine. This is assuming there is enough of a ceiling clearance to walk upright within the mine levels. There can be horizontal escalators like the ones at an airport terminal or an amusement park to move people around effortlessly. With of course several silos with climbing ladders to the surface as an air ventilation system and for emergencies or for first responders to use as a last resort. The mine museum can have part timer former miners give tours to the general public. Maybe miners who suffer from Black Lung from decades long coal mining that are still abled bodied to work. Teaching future generations of visitors of the triumphs and tragedies of the mining way of life. Otherwise no matter which utilization listed above all of them will have several emergency stations on each mine level. Stocked with up to date masks with oxygen, first aid supplies, rations, equipment such as helmets and flashlights, etc... It will be up to the local municipality to train former miners to be inspectors of the mine to insure it is structurally sound. Besides to also inspect every quarter of the year this litany of emergency stations underground much like their are inspectors for fire extinguishers. This can augment the tax base revenue from the retrofitted mines to include the inspection permitting process for the up to date emergency equipment. This is the vision I have for the Rust Belt underground region of Americana that can be pursued earnestly. To reanimate local mining towns with their unemployed workforce and bringing in a continuity of a supply chain of logistics. That certainly may grow these old glory days for such townships into tomorrow's small cities with a new lease of life. We owe it to America to at least explore this option responsibly as a possibility to invigorate job creation and to seize such partially developed underground real estate. However, if not in America maybe this inspirational seed conceptual design is for the Russians, Chinese who are today's infrastructure hawks, the Europeans, and maybe even the Africans with Chinese built major Infrastructure. Ivan "Atrayo" Pozo-Illas, has devoted 21 years of his life to the pursuit of clairvoyant automatic writing channeling the Angelic host. Ivan is the author of the spiritual wisdom series of "Jewels of Truth" consisting of 3 volumes published to date. He also channels inspired conceptual designs that are multi-faceted for the next society to come that are solutions based as a form of dharmic service. Numerous examples of his work are available at "Atrayo's Oracle" blog site of 11 years plus online. Your welcome to visit his website "Jewelsoftruth.us" for further information or to contact Atrayo directly.

#Gems of Opportunity #Ivan Pozo-Illas #Mining Workforce #Retrofitted Mines #Rust Belt Region #Underground Real Estate #Underground Infrastructure

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