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Foxconn's $12 Billion Plan for Brazilian iPad Production in Trouble


Reuters reports that Foxconn's previously-announced $12 billion plan to begin producing iPads in Brazil appears to be faltering as Foxconn and the Brazilian government have been unable to reach an agreement.
A much-hyped $12 billion plan for Taiwanese manufacturer Foxconn to produce iPads in Brazil is "in doubt" due to stagnant negotiations over tax breaks and Brazil's own deep structural problems such as a lack of skilled labor, government sources tell Reuters.

[...]

"The talks have been very difficult, and the project for a Brazilian iPad is in doubt," one official said. "(Foxconn) is making crazy demands" for tax breaks and other special treatment, the official added.
Reports in the Brazilian media have indicated that the country's development bank is on the verge of withdrawing funding for the project, a move that would likely kill the plan as it currently stands.
One option could be for Foxconn or a Brazilian partner to simply assemble foreign-made parts to the iPad, rather than producing screens and other components locally. Other steps could also be taken to reduce the project's scale, which may simply have been too ambitious for all parties.
High import tariffs and taxes push the entry-level iPad price to approximately $900 in Brazil, nearly double the model's $499 price tag in the United States. By moving production into Brazil, Apple would be able to address the country's market of 190 million consumers at lower price points.

Related roundup: iPad Air

Top Rated Comments

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Posted: 39 months ago

Unfortunately i don't think the US workers would like the same treatment the china workers get. Im sure there is a reason they committed suicide, and i don't think its high wages and a lovely working life that did it. See Mike Daisey's show, The Agony and the Ecstasy of Steve Jobs


Just to reiterate a point that has already been made a lot of times over the past couple of years: the workers at Foxconn committed suicide at a rate significantly lower than that of the general population in China. And those suicide rates are the official Chinese ones, which if anything would probably be understated with regard to suicide in the general populace, because they certainly do not want to look bad.

(Unfortunately, we do not have numbers for China broken down by age. So it may well be that Foxconn's suicides *were* out of the ordinary, for people of that age. However, since we don't know, it seems somewhat irresponsible to assume that that is the case.)

If a company in the US had, say, 50,000 employees, and those employees committed suicide at 2/3 the rate that other people in the US commit suicide, would we hold a Spanish inquisition?

This is not to say that Foxconn is a great place to work, or that there aren't real problems. All I'm saying is, using this as evidence that there are real problems is either slightly ignorant or extremely disingenuous.
Rating: 5 Votes
Posted: 39 months ago

Dear Foxconn,

Canada is also very close to the USA.

Signed,
skilled workers.


But producing in Canada won't solve Apple's problem, which is high import taxes when importing products to Brazil. Producing in Canada would probably also triple the unit production cost because wages are way higher in Canada compared to Brazil...
Rating: 4 Votes
Posted: 39 months ago
Dear Foxconn,

Canada is also very close to the USA.

Signed,
skilled workers.
Rating: 4 Votes
Posted: 39 months ago
For those who want the ipad produced in US: Lets face it, the ipad is a hand built electronic product. It is not designed for automated assembly. Go look at the teardowns. Its one reason it is so well made, I am afraid to say. No American could handle the workplace necessary to assemble it. Unless you were willing to double the price.
Good, Fast, Cheap -- Pick two.
Rating: 4 Votes
Posted: 39 months ago



$900 for a baseline iPad? Wow that's freaking expensive


You're damn right. I am Brazillian, and I'm sick with the tax policy applied here. This week a chinese car manufacurer dropped all plans to build a factory here because our "magnific" politics raised the tax over cars. 13,000 jobs trown away! I just can't get it in my mind!
Rating: 4 Votes
Posted: 39 months ago

Dear Foxconn,

Canada is also very close to the USA.

Signed,
skilled workers.


I think the point is to produce for the Brazilian internal market, not the US market. And I think wages in Canada are probably higher than in the states right now anyway - stronger Canadian Dollar (and economy) not helping much there.
Rating: 3 Votes
Posted: 39 months ago

Foxconn seems to be asking for too much, and Brazil is definitely not a Chinese sweatshop - so it's just impossible for them to have the same cost advantages in Brazil, a Western nation with usually very high employment social nets as they do in cheapo Asia.

It will be a pity if they don't start making iPads there; but in any case interest following the new tax incentives for tablets is already considerable, with companies like LG, Samsung, Motorola, Positivo and others confirming their interest in manufacturing devices in Brazil.


Foxxcon is facing problems in China, that is why the are attempting to expand to other regions. Higher wages and the Chinese government is paying more attention to pollution, so its driving cost up, making them less competitive.
Rating: 2 Votes
Posted: 39 months ago
I say make them in the US and smuggle them into Brazil at a profit. It's better than guns or drugs.
Rating: 2 Votes
Posted: 39 months ago
Haha, I can beat that price. In Zambia, it costs 7,000,000 kwacha. About $1,800
Rating: 2 Votes
Posted: 39 months ago

I say make them in the US and smuggle them into Brazil at a profit. It's better than guns or drugs.


lol, they smuggle guns and drugs, we smuggle Apple products!
Rating: 2 Votes

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