Mount Pleasant is a village in Racine County, Wisconsin. It is located roughly 30 miles south of Milwaukee and 60 miles north of Chicago.
Until earlier this year, Mount Pleasant was perhaps best known for once being the home to the late Henry Herzog, who once owned a farm there. For those unfamiliar with Herzog, he was a Wisconsin State Assemblyman.
In 1915 and 1916.
Mount Pleasant is that kind of place.
Sorry, Mount Pleasant was that kind of place. As readers of this publication know by now, Foxconn plans to start construction on a $10 billion, 20 million sq. ft. LCD manufacturing plant in Mount Pleasant this year. And Racine County just gave its blessing to a deal to offer up to $764 million in financial incentives to support that campus.
As of the 2010 census, there were 26,197 residents of Mount Pleasant. Its population makes up about 13% of the 195,408 citizens in Racine County. That $764 million amounts to $3,910 of new debt for every citizen of Racine County. Worse, it represents $29,163 of new debt for every citizen of Mount Pleasant.
Foxconn says it will employ 3,000 people when the site opens, and if things break right, it could ultimately employ 13,000 at the site. That comes to $58,769 in new debt per job created, best case. Assuming 3,000 new jobs, it’s an outlay of $254,666 per job.
The impact is so blunt, Moody’s Investor Service immediately cut Racine County’s bond rating, meaning it will be more expensive for the county to borrow for future needs.
As you are letting that sink in, consider the potentially even bigger wow around the corner. Andrew Ng, once Google’s top artificial intelligence researcher, just launched a new venture to bring AI to the factory floor. And who is his partner? Foxconn.
It’s not immediately clear Ng understands how the typical electronics manufacturing plant works. A company video (at landing.ai) demonstrates a human hand-inspecting a semiconductor package. On the video, Ng says the software can easily be taught to spot defects on PCBs, which he says is often done by “thousands of people at a single factory.” Except it’s not. Inline AOI overcame that issue years ago.
There’s an obvious disconnect between the technology and the need that must be sorted out.
What is true, however, is that work toward not just the smart factory (also known as Industry 4.0), but one dominated by AI, will accelerate. The value proposition is too great to ignore. And that’s where matters become, well, uncomfortable.
Ng says that while AI technology is likely to disrupt traditional human-run operations, his new company is seeking ways to prepare displaced employees for higher-skilled work. If he succeeds, that would be great. I wouldn’t bet on it. In a perverse way, capital flows to those who appear best-positioned to blow up old industries, which typically results in lower labor costs, or greater automation, or both. As a startup, Ng’s investors will drive his research.
As Michael Ford notes in our cover story this month, Industry 4.0 married with AI could spell the end of employment, not just for line operators but also higher-level workers such as supervisors, managers and engineers. “The question,” he asks, “is whether this in fact will be necessary, or whether there are ways in which it could be avoided, or at least reduced.”
During its recruitment of Foxconn, Wisconsin state transportation officials were surprised by the ODM’s request for driverless lanes from the new campus to key regional transportation hubs. If the Landing-Foxconn partnership succeeds, those driverless cars might be human-free as well.
We’ve come a long way from the early 2000s, when China pushed factories to buy semiautomatic equipment. The reasoning, as old friend Gene Weiner pointed out to me at the time, was simple: jobs. When you have 1.3 billion people to keep happy, the benefits of automation aren’t necessarily prioritized. Now we are spending hundreds of millions of dollars to underwrite corporations that might accelerate the obsolescence of humans in building electronics. In doing business with Foxconn, the citizens of Mount Pleasant might find it anything but.
P.S. A couple of housekeeping notes. In our December issue, a column from Roy Akber borrowed heavily from previous work by Craig Armenti. Our sincere apologies to Craig for the unattributed use of his ideas.
And we continue to add interviews to our podcast series, PCB Chat. Stop by upmg.podbean.com to hear the latest, including my chat with Randall Sherman on the state of the EMS/ODM market.