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Foxconn Unit To Cut Over 10,000 Jobs As Robotics Take Over (nikkei.com)
According to Nikkei Asian Review, "Foxconn's panel arm Innolux is planning to slash more than 10,000 jobs this year as part of the company's aggressive efforts to increase the use of automation in manufacturing." Honorary Chairman Tuan Hsing-Chien said in a press conference on Tuesday: "We will reduce our total workforce to less than 50,000 people by the end of this year, from some 60,000 staff at the end of 2017." From the report: Innolux is a liquid crystal display-making affiliate of major iPhone assembler Hon Hai Precision Industry, better known as Foxconn Technology Group. Tuan is also a technology adviser to Foxconn, Sharp and Innolux. Tuan said up to 75% of production will be fully automated by the end of 2018. Most of Innolux's factories are in Taiwan. Tuan's pledge came a few days after Foxconn Chairman Terry Gou said the company would pour in some $342 million to overhaul its manufacturing process by using artificial intelligence.
You're using some lovely RIAA math there, sport.
Wisconsin is paying nothing by offering tax breaks and tax credits for a company that otherwise would not even be setting up shop in Wisconsin.
You seem to assume that a government wouldn't be that stupid and corrupt, but you're totally wrong.
To lure Foxconn Technology Group to Wisconsin, state residents will have to do more than just forgo taxes from the Taiwanese electronics giant. They will have to pay cash — writing checks for up to $200 million a year.
And because Wisconsin already waives almost all taxes on manufacturing profits in the state, these incentives represent not a lost opportunity at collecting revenue but an obligation to pay cash to Foxconn out of the state treasury for up to 15 years. When including a $150 million sales tax break for buying construction material, the incentive package could total up to $3 billion, according to the bill that lawmakers could vote on as soon as Tuesday.
They'll be so much better off unemployed than having that "sweat shop" job.
It is unlikely anyone will be unemployed. Most of these robots are going into areas where labor costs are highest, which means the areas around Shenzhen. There are plenty of other jobs in that area. Nearly every business is looking for workers.
The headline and summary are misleading. What they describe as "job cuts" and "slashing" are really Foxconn dealing with hiring shortfalls. The one child policy started in 1979 and became more strictly enforced in the 1980s. Workers born in the "bulge" generation before that are no longer interested in working on factory floors, and there just aren't enough young people to replace them.
There are three solutions:
1. Move manufacturing further inland or to other countries (such as Vietnam), where supply chains will have to be rebuilt, and new workers trained.
2. Raise wages to draw more workers off the farms.
3. Use robots.
From a business perspective, #3 is the best choice.
Wisconsin is paying nothing by offering tax breaks and tax credits for a company that otherwise would not even be setting up shop in Wisconsin.
If no subsidies were offered, the jobs would still go somewhere (possibly Wisconsin), so by offering tax breaks Wisconsin is depriving some state of tax revenue, and, meanwhile, another state is offering tax breaks that is depriving Wisconsin of revenue. Meanwhile, businesses are locating to optimize their tax breaks, rather than where it actually makes the most sense for reasons of skill availability, resources, and logistics.
These tax incentives are a Prisoner's dilemma. Each state does it because the other states do it, yet they would all be better off if no one did it. It would be a beneficial and legitimate use of the Commerce Clause for the federal government to just ban this economically damaging activity. It would be better and more fair for both states and businesses.