Category Archives: Economy

Gou Plans to Take a Step Back

Perhaps this explains why we have been getting a few mixed messages from Foxconn lately.

TAIPEI (Reuters) – The chairman of Taiwan’s Foxconn, an assembler of Apple Inc’s iPhones, said on Monday he plans to step down in the coming months to pave the way for younger talent to move up the company’s ranks.

[…]

Terry Gou, speaking on the sidelines of an event in Taipei, said that while he planned to resign as Foxconn chairman, he hoped to remain involved in strategic decisions regarding the company’s business.

When asked by Reuters if he would quit as chairman, Gou said he was moving in that direction, although any decision needed to be discussed with the company’s board.

“I don’t know where you got the information from. But I have to say, basically, I’m working toward that direction – to walk back to the second line, or retire,” Gou said.

“I will be involved in the major direction of the company, but not involved in daily operations.

“I’m already 69 years old. I can pass down my 45 years of experience. That’s the goal I set up – to let young people learn sooner and take over sooner and to replace my position sooner.”

Gou said his plans would be discussed with the board of Foxconn, formally known as Hon Hai Precision Industry Co Ltd, in the coming months and shareholders would be told at the AGM in June.

Foxconn Buys Building in Madison

Excellent!

Foxconn Technology Group confirmed plans to buy a building on the Capitol Square in Madison currently owned by BMO Harris Bank to establish another innovation center in Wisconsin.

The company announced the purchase of the property at 1 W. Main St. on Friday morning. The building will be renamed Foxconn Place Madison and Foxconn says it will connect the University of Wisconsin-Madison and regional suppliers with the company’s Wisconn Valley Science and Technology Park in Mount Pleasant.

BizTimes Media first reported on Foxconn’s plans to buy the property in March. 

Foxconn has previously announced a number of other innovation centers around the state, including in Green Bay, Eau Claire, Milwaukee and downtown Racine. An article from The Verge this week suggested many of the projects have not made significant progress.

Local Business Innovating and Doing Good

Here’s a fantastic write-up about a local West Bend business that is doing great things by innovating and disrupting.

Born between 1946 and 1964, the Baby Boomer generation came along right after WWII. They make up about 26% of the entire United States population, a number that is only matched by Millenials. They own the majority of the homes in the United States and, in fact, usually own more than one property. With such numbers, boomers are determined to change the way we age in America. They will not settle for the care and surroundings that their own parents received. The boomers want to remain independent and in their own homes.

In a world of Uber, GrubHub, and Amazon, at-home caregiving and independence-enabling services will be the “go to” for our aging neighborhoods. GrandCare Systems, located in the heart of downtown West Bend, has been on the cutting edge of the digital caregiving bubble since the late 2000s. We had a chance to sit down with co-founding members, Charlie and Gaytha Hillman to find out more.

[…]

Charlie knew there had to be others experiencing the worry and stress he was. He searched for existing products and came up with nothing. He put his engineering mind and MIT education to good use and decided to design a technology to provide remote monitoring capabilities and enhanced communications between the loved one and family members. GrandCare is available not only for use in the United States, but internationally in countries such as the United Kingdom, Australia, Canada, Aruba, Bermuda and New Zealand.

The system can be used in both single-family homes or in senior living communities. GrandCare is a large touchscreen that is placed into the loved one’s residence. It is a source of information and communication with pictures, videos, games, trivia, weather/news, simple video chatting and reminders. Caregivers can simply log in or check the GrandCare app to add communications or check on activity, medications or health readings.They can also get alerts if something seems amiss (e.g. didn’t take medications, blood pressure is too high, didn’t get out of bed, or isn’t moving around normally). GrandCare requires zero computer knowledge on the senior’s part.

Wisconsin Shipyard to Build New Bulk Carrier

Great!

Fincantieri Bay Shipbuilding of Sturgeon Bay has signed an agreement with The Interlake Steamship Co. of Ohio to construct a U.S.-flagged Great Lakes bulk carrier that will be the first of its kind to be built in 35 years.

The new River-Class, self-unloading bulk carrier is believed to be the first ship for U.S. Great Lakes service built on the Great Lakes since 1983, according to a press release from Interlake and Fincantieri Bay Shipbuilding, a unit of the Italian shipbuilder Fincantieri S.p.A. The ship, which will transport unpackaged raw materials to support manufacturing throughout the Great Lakes region, also represents hundreds of jobs for U.S. merchant mariners and Wisconsin shipyard workers, Fincantieri said.

The ship, measuring 639 feet long and 75 feet wide, will be constructed in Fincantieri’s Sturgeon Bay shipyard by its nearly 700 employees. The work will will generate business for partnering contractors, vendors and suppliers. Major partners include American Bureau of Shipping (ABS), Bay Engineering (BEI), EMD Engines, Caterpillar, EMS-Tech Inc., Lufkin (a GE company) and MacGregor. Construction is expected to be completed in mid-2022.

The Interlake Steamship Co., based in Middleburg Heights, Ohio, is the largest privately held U.S.-flagged fleet on the Great Lakes with nine vessels. Based on the length, the new bulk carrier will be the smallest ship in Interlake’s fleet, but the company hasn’t built a new ship in 40 years, according to Interlake president Mark Barker.

Zuckerberg Advocates for Enforcement of Digital Hierarchy

He’s no fool. In an essay for the Washington Post, Zuckerberg calls for more regulation.

In brief, Mr Zuckerberg calls for the following things:

  • Common rules that all social media sites need to adhere to, enforced by third-party bodies, to control the spread of harmful content

  • All major tech companies to release a transparency report every three months, to put it on a par with financial reporting

  • Stronger laws around the world to protect the integrity of elections, with common standards for all websites to identify political actors

  • Laws that not only apply to candidates and elections, but also other “divisive political issues”, and for laws to apply outside of official campaign periods

  • New industry-wide standards to control how political campaigns use data to target voters online

  • More countries to adopt privacy laws like the European Union’s General Data Protection Regulation (GDPR), which came into force last year

  • A “common global framework” that means these laws are all standardised globally, rather than being substantially different from country to country

  • Clear rules about who’s responsible for protecting people’s data when they move it from one service to another

This is a game that has been played for centuries. Now that Facebook sits atop the industry, Zuckerberg is advocating to freeze the structure and increase the barriers to entry. Complex legal structures with substantial financial liability for violations makes it impossible for all but the biggest and wealthiest of companies to comply.

Wisconsin Unemployment Rate Dips on Flat Job Growth

Good news!

Wisconsin’s unemployment rate dipped below 3 percent in February, even as net private sector employment was essentially unchanged during the month.

The seasonally adjusted unemployment rate in Wisconsin was 2.9 percent during the month, the first time it has been below 3 percent since February 2018.

Private sector employment was down by 300, according to data released by the state Department of Workforce Development. Total nonfarm payrolls were down 3,400, led by a 3,100-job drop at the local government level.

Foxconn Plant To Be Operational By 2020

Great!

Electronics maker Foxconn Technology Group said Monday it will begin construction this summer on a display-screen manufacturing hub near Racine, with plans for production to start by the end of 2020.

A company statement said the construction marks the next phase of Foxconn’s overall blueprint for its campus in Mount Pleasant.

It underscores the company’s manufacturing plans at the site, weeks after reports and statements by Foxconn officials suggested the company was scaling back or changing its plans to build display screens in Wisconsin.

If the plant is operational by fall 2020, it also could give political fodder to one of its top cheerleaders, President Donald Trump, who has touted Foxconn’s plans as heralding a renaissance in U.S. manufacturing.
This will be hard for Wisconsin’s Democrats. Will they celebrate this great economic boon to Wisconsin or will they continue to carp and moan because Trump celebrates it? In other words, will Democrats prioritize partisan politics over celebrating Wisconsin’s success? I think we know the answer to that.

Foxconn Complies With Wisconsin’s Environmental Regulations

There you go.

A top aide to Gov. Tony Evers said Thursday he believes all of the state permits issued to tech giant Foxconn have been reviewed by the state Department of Natural Resources and deemed appropriate.

But the damage to the relationship with Foxconn is done. Despite having gone through the process and received the appropriate permits, they were forced deal with regulators again and wait to see if they would pass the new administration’s test. Inconsistent treatment, uncertainty, and the arbitrary application of regulations kills businesses.

U.S. Becomes World’s Largest Petroleum Exporter

Huzzah, huzzah.

New York (CNN Business)Move over, Saudi Arabia. America is about to steal the kingdom’s energy exporting crown.

The United States will surpass Saudi Arabia later this year in exports of oil, natural gas liquids and petroleum products, like gasoline, according to energy research firm Rystad Energy.
That milestone, driven by the transformative shale boom, would make the United States the world’s leading exporter of oil and liquids. That has never happened since Saudi Arabia began selling oil overseas in the 1950s, Rystad said in a report Thursday.
“It’s nothing short of remarkable,” said Ryan Fitzmaurice, energy strategist at Rabobank. “Ten years ago, no one thought it could happen.”

Restaurant Jobs in NYC Disappear After Arbitrary Wage Floor Imposed

Governor Evers wants this in Wisconsin.

Data show that following the labor movement’s “Fight for $15” victory, which imposed steep annual increases in mandatory wages for workers, New York City experienced its sharpest decline in restaurant jobs in nearly 20 years.

Restaurants tend to operate on famously low profit margins, typically 2 to 6 percent. So a 40 percent mandatory wage increase over a two-year period is not trivial.

In response to the minimum wage hikes, New York City restaurants did what businesses tend to do when labor costs rise: they increased prices and reduced labor staff and hours.

For example, Lalito’s, a popular restaurant on Bayard Street, recently raised its menu prices 10-15 percent, Eater New York reports.

A New York City Hospitality Alliance survey also showed that three out of four full-service restaurants said they planned to reduce employee hours. Nearly half of those surveyed said they planned to eliminate some job positions in 2019.

Work is Good

Yes it is. And Rep. Brandtjen wonders why Governor Evers is against it.

It didn’t take long after Tony Evers was elected governor to signal that he may remove the work requirements for able-bodied, childless adults receiving Medicaid benefits.

This is an inexcusably horrendous idea. What’s wrong with requiring able-bodied people to work for taxpayer- provided benefits? Work is good. People are much happier when they feel a sense of purpose. Why in the world would Tony Evers want to remove incentives to work? It’s almost criminal. Work determines who we are and who we become, it’s our identity; our contribution to ourselves and the greater community. Work should be encouraged because it’s healthy. The Robert Wood Johnson Foundation reports that being employed reduces a wide variety of health risks including stress, heart disease and stroke.

[…]

Why wasn’t this issue brought up during the campaign? It’s simple; no one supports encouraging people to fail. This is just another example of the soft bigotry of low expectations. If Tony Evers can justify this position I’d love to hear his rationale.

It seems to me Democrats simply do not value work, jobs or anything else that might make their voters freefrom the economic chains of government programs. It certainly would explain their vehement opposition to the Foxconn project, which would bring thousands of jobs to Wisconsin. Where am I wrong?

Student Debt Delinquencies Peak

I blame the students who took on odious amounts of debt for degrees that offer little opportunity to repay the debt and the adults who enabled the kids to take on the debt.

Student-loan delinquencies surged last year, hitting consecutive records of $166.3 billion in the third quarter and $166.4 billion in the fourth.

Bloomberg calculated the dollar amounts from the Federal Reserve Bank of New York’s quarterly household-debt report, which includes only the total owed and the percentage delinquent at least 90 days or in default.

That percentage has remained around 11 percent since mid-2012, but the total increased to a record $1.46 trillion by December 2018, and unpaid student debt also rose to the highest ever.

States Consider Colluding Against Corporate Handouts

Interesting.

This, as the End Corporate Welfare Act is circulating in several states, including New York. The bill would essentially call a cease-fire on awarding tax incentives to certain companies by creating an interstate compact of states that agree to end the practice.

New York’s bill is being sponsored by Assemblyman Ron Kim and state Sen. Julia Salazar, who have criticized the state’s deal with Amazon for months. “We are definitely glad our organizing has paid off,” says Michael Carter, a spokesman for Salazar. “This is not the first [corporate welfare] deal and it certainly won’t be last. But maybe now companies will think twice about pursuing one of these deals in the state of New York.”

A similar version to New York’s bill is also making its way through the Arizona and Illinois legislatures, while lawmakers in other states, including Connecticut, Florida, Massachusetts and New Jersey, are considering introducing such legislation.

From a philosophical standpoint, I get it. It is frustrating that some businesses shop their stuff around looking for the best corporate handout. The problem is that it will never work. With 50 states and hundreds of cities, it only takes one to cave to break the cartel. Plus, with business increasingly global, there is no way that we can prevent other nations from incenting businesses to locate there.

Amazon Changes Mind About New York

Wow. Wisconsin should take note. Big, global businesses can locate anywhere. *cough* Foxconn *cough*

New York (CNN Business)Amazon is ditching its plans to build a new headquarters in New York after facing backlash from members of the community.

“After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens,” Jodi Seth, an Amazon spokeswoman, said in a statement.

In the statement, Amazon noted that “a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City.”

Amazon selected New York City and Northern Virginia in November to split duty as its second headquarters (nicknamed HQ2) after a year-long search. Each city was expected to have more than 25,000 workers over time.

At least Queens won’t be gentrified with all of those good jobs and better standard of living.

 

Study Says Transition to Renewable Energy Would be Swell

LOL

Moving away from fossil fuels could create thousands of jobs, improve public health, and increase overall economic activity by nearly $14 billion in Wisconsin, according to a new study.

[…]

The study, done at the request of La Crosse County, is hypothetical and doesn’t address technological challenges.

“The impetus for this whole study was just to figure out whether producing our energy in-state would be beneficial to the economy and people and the environment of Wisconsin,” said David Abel, a UW energy researcher and lead author of the study.

Ahhh, to be an academic…

Evers Badgers Foxconn about Environmental Regulations

Gee, is there any wonder why Foxconn might be getting cold feet when this is the first thing they hear from the new governor?

Gov. Tony Evers says he’s confident Foxconn’s leaders understand his concerns around the manufacturer’s environmental impact in Wisconsin.

Addressing RENEW Wisconsin’s Renewable Energy Summit yesterday in Madison, the guv said he spoke with Foxconn’s Louis Woo Wednesday night. The special assistant to Foxconn CEO Terry Gou told Evers about the company’s plans to keep the waters of Lake Michigan clean.

“I know we’re always concerned about the environmental issues as it related to Foxconn,” Evers said. “I feel confident going forward that they get it, and that we’ll have a good partnership there.”

Still, he said, “we have some things to check up on though.”

Wisconsin Adds More Jobs

Excellent!

MADISON – The Wisconsin Department of Workforce Development (DWD) today released the U.S. Bureau of Labor Statistics (BLS) preliminary employment estimates for the month of December. The data showed Wisconsin added 48,300 total non-farm jobs and 44,900 private-sector jobs from December 2017 to December 2018. Construction jobs increased by 8,500 and manufacturing jobs increased 17,800 over the year. The December unemployment rate remained at 3.0%.

Homelessness Swells in Liberal Cities

Correlation or causation?

Alexander Casey, a policy advisor on Zillow’s Economic Research team, explained to Yahoo Finance that “15% of the U.S. population lives in areas where a staggering 47% of the homeless population lives. And these are areas where rents are 29% higher on average than the rest of the U.S. And most of these communities are already past this 32% tipping point.”

Zillow researchers clustered different communities together based on “how they’re experiencing rising poverty rates, existing homelessness, homelessness rates, and declining affordability.” The places where people are most at risk of homelessness, according to the study, included New York, Los Angeles, Seattle, and Boston, “which all have crossed the 32 percent affordability threshold.”

The three U.S. cities with the most homeless people in 2018 were New York (78,676), Los Angeles (49,955), and Seattle (12,112), according to the most recent HUD data. A 2016 Wall Street Journal report highlighted that while overall homelessness in America was declining, the homeless population in these cities and others had risen rapidly since 2010.

Income Mobility

When people gripe about “the 1%,” do they even know who that is? Income mobility is far more important than income distribution.

Some 94 percent of Americans who reach “top 1 percent” income status will enjoy it for only a single year. Approximately 99 percent will lose their “top 1 percent” status within a decade.
Now consider the top 400 U.S. income-earners—a far more exclusive club than the top 1 percent. Between 1992 and 2013, 72 percent of the top 400 retained that title for no more than a year. Over 97 percent retained it for no more than a decade.
HumanProgress.org advisory board member Mark Perry put it well in his recent blog post on this subject:
Whenever we hear commentary about the top or bottom income quintiles, or the top or bottom X% of Americans by income (or the Top 400 taxpayers), a common assumption is that those are static, closed, private clubs with very little dynamic turnover … But economic reality is very different—people move up and down the income quintiles and percentile groups throughout their careers and lives.

City Leaders Express Regret for Funding Brainstorming Project

I remember casting an askance eye at this when it happened. I don’t remember if I wrote about it. Essentially, they paid $10,000 to have a bunch of college kids brainstorm ideas for our downtown. Of course, they don’t have any grounding in business, finance, etc. It was just a bunch of young adults sitting around saying, “wouldn’t it be cool if there was…” fill in the blank. I’m far more interested in the ideas from people who live and work in our downtown and would directly benefit/lose from the decisions made. Skin in the game and whatnot…

WEST BEND — Members of the Downtown West Bend Business Improvement District expressed some buyer’s remorse when they reviewed some of the ideas the high school and college students generated as part of The Commons group.

“I would just like to echo the thought that I think we overpaid in hindsight for this opportunity and that we should be more careful next time that we consider this sort of brainstorming activity,” Alderman Michael Christian said, who is also a member of the business improvement district.

Officials paid almost $10,000 for the opportunity to host students to develop ideas for improving the downtown. The idea was borne from a meeting during the first months of 2018 when board president Mike Husar requested Economic Development Manager Adam Gitter obtain a record of the vacant spaces, along with the businesses that occupied the buildings in the downtown.

That idea morphed into a more comprehensive project to generate general ideas for improving the downtown.