A $12 billion plan by Foxconn to build iPads in Brazil is in trouble as negotiations broke down over tax breaks and the fact that Brazil has a lack of skilled labour.
According to Reuters, the plan to open a Foxconn plant was announced by President Dilma Rousseff during an official visit to China. It was seen as a sign of growing economic ties with Asia, and proof that Brazil was moving up the value added manufacturing chain.
Factories back home were a little shocked. For years they have been facing high taxes, an overvalued currency and a lack of qualified workers due to poor education and a tight labour market.
The start date for production was first set for July, then delayed to November and now it has been put on hold completely.
According to the government, Foxconn is making "crazy demands" for tax breaks and other special treatment. Foxconn is saying nothing.
According to the Folha de S.Paulo newspaper funding for the Foxconn project from the BNDES state development bank was in danger of being withdrawn.
If it all goes tits up, the deal it could become symbolic of Brazil's struggle to meet high growth expectations this year. After expanding 7.5 percent last year, the economy is now forecast to grow just 3.5 percent in 2011.
Part of the problem is that there are high taxes, bad infrastructure and a shallow labour pool in Brazil. At the same time Brazil's consumer market is considered under-served.
Part of this is because the high cost of imports means an iPad 2 is nearly twice the cost of what it is in the US.
Yet on slavery Rating scale, Us slavery is Only 1/4 as gruesome as Brazil. trouble Is, If people arn't Paid, Inefficientcy Has No Meaning, While People have No Money to buy with. So Isn't Much point. brazil, 1/4 of Nil.
Worse in SRS Is Nigerian, mere 1/4 as kind as Brazil, where nachives are hunted down with helicopter guunships for sport, by Republic of India. Nigerian have violent & hopeless personality, Point really is: Foxconn really is so poorly managed that have to take great leap to Nigeria just to find people to inflict suicide upon & continue running. Foxconn makes crummy mainboards for large oem, like Hp. Under phony names, like skyhawk.
Fozconn should simply be closed down by ReD Chinmese Government as Violation of Fundumental Human rights. Look Whats happened to Hp, Mostly due to crummy terribleness of Compaq, yet yankee puritain imperialis to just plain crocked sadists, People only take so much, Then BAM, NO Moore.
drashek md