President Donald Trump has doubled down on his claim that Apple will be manufacturing the iPhone in the U.S. once its Taiwanese contractor, Foxconn Electronics, opens its factory in Wisconsin.
"Now we need people because they're going to have thousands of people working, it's going to be a—you know—that's the company that makes the Apple iPhone," the president told Wall Street Journal reporters in a wide-ranging interview last week. "They're going to build them here, they're going to build other things here too.”
In July, an arrangement was announced with the manufacturer, which said that it would spend $10 billion to build a flat-screen factory in the Badger State, to be completed in the 2020 timeframe—in return for $4 billion in state tax incentives and other “sweeteners” over 15 years.
In return, Foxconn and the state have said that investment will support the creation of 3,000 jobs initially (plus the 10,000 short-term construction jobs created to build the plant). Eventually, the goal would be to support 13,000 direct jobs, the vendor said, and up to 22,000 indirect jobs for businesses that could crop up around the campus.
Yet as for building the iPhone in Wisconsin, there has been no definitive statement of plans by Foxconn to produce iPhone screens there, although the manufacturer has not thrown cold water on the idea with a denial, either. Apple has also been mum on the speculation.
However, even if Foxconn could make iPhone screens stateside at a cheaper labor and production cost than it already enjoys in Taiwan, there is the question of whether it would make economic sense for Apple to ship the screens back to Asia to be inserted into its overall manufacturing supply chain before re-importing the finished phones to the domestic market. Foxconn, of course, does not produce the entire handset on its own—the production process spans many factories and stakeholders on both sides of the Pacific.
That uncertainty is dulling some of the optimism for the project, as are other aspects of the deal. Detractors say that Foxconn is a company with a track record not delivering: In 2013 it announced plans to build a $30 million plant in Pennsylvania that never came to fruition; there are similar abandoned deals on the books in Brazil, India and Indonesia from the past few years. Also, it has a high interest in automation, which opponents say could limit the amount of actual job creation that Wisconsin sees.
Further, the massive incentive plan has stirred controversy and is expected to be a main issue in this year's gubernatorial race. Aside from the tax breaks—which Wisconsin does not expect to recoup until 2043—Wisconsin will allow the manufacturer to avoid state environmental rules and oversight; it also plans to pay for millions in additional road improvements; and, it said it would buy the land for the factory and give it to Foxconn for free. The state plans to take the land by eminent domain, which has drawn a lawsuit from outraged property owners.
Nonetheless, Trump remains bullish: “The head of Foxconn, you know he's a friend of mine. He's only moving there because of me," he told the WSJ, thus taking full ownership of the deal.