As President Donald Trump took a victory lap at the groundbreaking of Foxconn’s $10 billion southeastern Wisconsin-based plant Thursday, he had a stern message for a neighboring manufacturer.
“Harley-Davidson, please build those beautiful motorcycles in the United States,” he said, adding, “Don’t get cute with us.”
“Build them in the USA, your customers won’t be happy if you don’t,” he said.
It was a sign of the times in the Trump economy, where the Foxconn investment comes with a price to taxpayers and Harley-Davidson faces the consequences of international tariffs.
Here in the sprawling Foxconn building south of Milwaukee, men and women in suits toured an trade show with products and services that looked straight out of a futuristic movie set.
Exhibits featured both hardware and software products, including smart classroom technology, security, intelligent transportation, LCD screens, agricultural technology and a precision medicine booth billed as the “Hospital of Tomorrow.” A friendly robot served attendees miniature Wisconsin hamburger bites. A stage with a podium was flanked by holograms.
Foxconn, the Taiwanese electronics manufacturer, and its stakeholders were celebrating the groundbreaking of a nearly 3,000-acre campus and “innovation hub” here in southeastern Wisconsin, the result of $4 billion package of tax breaks and other local, state, and federal incentives.
While Foxconn is a beneficiary of the Trump administration’s policies, 24 miles north at Harley-Davidson’s Milwaukee corporate headquarters, the motorcycle manufacturer is grappling with tariffs imposed by the Trump administration and the decision to move some of its manufacturing to Europe.
Earlier in the week, Trump lashed out at the motorcycle giant, saying it was using tariffs as “an excuse” to move some of its operations overseas.
It’s a story of old versus new technology in the Trump era – the promise of 13,000 new jobs in an area billed by officials as “Wisconn Valley,” contrasted with what’s happening to the 115 year-old motorcycle stronghold. Harley-Davidson is facing a potential credit downgrade and the loss, the company says, of as much as $100 million per year because of European Union tariffs. Those tariffs are a retaliation for trade penalties imposed by the Trump administration.
“We’re making wonderful trade deals for the US,” Trump said shortly after shoveling ceremonial dirt at the plant’s groundbreaking.
Speaking to Foxconn employees, distributors, and clients, Trump defended his trade policies, citing record growth for the steel and aluminum industries.
“We are demanding from foreign countries, friend and foe, fair and reciprocal trade. We have been very much taken advantage of as a country,” he said, calling the development at Foxconn “beautiful.”
“This is as great as there is anywhere in the world and we do it within our country,” he said.
The price of Foxconn
But this trade deal, billed as “wonderful” by the President, had its own price: Those $4 billion of incentives were controversial in the state.
Opponents criticize it as an example of corporate welfare the state can not afford; the state alone is poised to give the company up to $3 billion in tax credits and breaks. It will take until at least 2043 for the state to recoup that lost tax revenue, according to Wisconsin’s estimates.
The Village of Mount Pleasant and Racine County, where the plant is to be built, have greed to provide $764 million in tax incentives to help get the facility constructed, including buying the land and giving it to Foxconn for free.
State and local governments will also spend $400 million on road improvements, including adding two lanes to the nearby Interstate 94. And the federal government has committed to spend $160 million more in federal money to help pay for the interstate expansion.
In addition, the local electric utility is upgrading its lines and adding substations to provide the necessary power that will be used by the plant, at a cost of $140 million. The cost of those projects will be paid by 5 million customers in the area.
Old vs. New
For stakeholders here, the Foxconn investment represents a look toward a future American economy.
Foxconn breaks ground on Wisconsin plant amid criticism of $4 billion in state and local incentives paid to company.
“Harley Davidson’s sort of old technology; this is new technology. What this (groundbreaking) represents is a repositioning in the global marketplace. And I think Harley has to do what they have to do but they’ll find that this is a competitive place to be, and this is just proof of it,” Wisconsin state Rep. Scott Allen, a Republican, told CNN.
He continued: “People are changing their perceptions about what they want, and I think the technology here suggests that people are excited about the future.”
Allen said the Foxconn investment has already shown results for his constituents about 40 minutes away. Harley-Davidson, he said, faces a challenge as it tries to stay competitive.
“People form brand loyalties and they stick with them, but the younger generation is a lot more pliable, and the younger generation is looking for solutions, they’re looking for products that meet their needs and their niche, and I think companies are going to recognize that they really have to look forward, not just being stagnant, not just being complacent with what they have,” he said.
At the Foxconn facility, Trump was looking forward, too.
“I think we can say, the eighth wonder of the world. This is the eighth wonder of the world,” he said.
CNN Money’s Chris Isidore contributed to this report.