“Crazy” Foxconn Demands Means Your iPad Might Not Be Assembled In Brazil Any Time Soon

“Crazy” Foxconn Demands Means Your iPad Might Not Be Assembled In Brazil Any Time Soon

If you’re expecting to see iPads with a “Assembled in Brazil” marker engraved across the aluminum back starting next year, think again. Brazilian officials are now claiming that “crazy demands” by Foxconn could totally nix the $12 billion deal, keeping iPhone and iPad manufacturing firmly rooted in Asia.

According to a Reuters report, Braziian officials say that Foxconn and the government just can’t come to an agreement on tax breaks, work conditions and the like.

In addition, discussions have been difficult because of Brazil’s high taxes and unskilled workforce, neither of which meet Foxconn’s expectations.

Expectations grown from Foxconn’s Chinese origins, no doubt: it looks like a cultural divide is a big part of the impasse here.

“We’re dealing with a lot of issues, like the (Taiwanese) trying to figure out how to do business in Brazil … and Brazil figuring out how to produce these complicated products,” a government official said. “Maybe we will end up starting with something smaller.”

Smaller? Like the Kindle Fire, perhaps?

What’s strange about this report is that just a week ago, Brazil’s Minister of Scirence and Technology Aloizio Mercadante said that the Foxconn factory was “ready” and would start pumping out iPad 2s. Either that’s an outright lie, or Foxconn’s prepared to let that factory just sit empty and rotting to get the government concessions it wants.

  • Carlos

    THATS THE PROBLEM WITH OUR LATIN AMERICAN COUNTRIES. WE TALK TOO MUCH TOO SOON!

  • Mike Shyu

    I didn’t think I’d see the day in which the words, “I’d rather have the model that’s made in China” were uttered out my mouth…

  • Tomi

    Agree… not only do our politicians talk too much and deliver mostly nothing, greed is the law of the jungle imposing taxes to scare away investment in the region.
    I’m really not that thrill if they make it in Brazil. China has gained a reputation of making quality products for the last decades. Is the same story of Japan who through the 50’s, 60’s and late 70’s products coming from there were considered low quality. MADE IN CHINA now has some prestige to it.

  • Vladimir Veloso

    It’s not that simple. There’s an official Government requirement which says Foxconn assembly operations must have a local partner in several aspects, for example, some components must not be just assembled here, they have to be manufactured here. Some sort of “economics / social” measures to protect Brazilian industry and jobs.

    Here’s a translated sample of Mercadante’s words from a local newspaper called “Folha de Sao Paulo” article:” “The negotiation is complex, the conditions of structure, technology, energy, logistics, is very complex,” the minister said after speaking at a seminar on innovation and technology in Sao Paulo.”What is the greatest difficult? Brazilian Partners” he said during his presentation. “It is a requirement to have Brazilian partners. In ??technology business, the partners that we have do not have the financial muscle to invest close to that value,” he said. “By “that value” he means something near US$ 12 billion.The whole article may be read in portuguese here:  http://www1.folha.uol.com.br/m… trying to find an 100% translated article in the English Version of Folha de Sao Paulo, since Google Translator version is far from accurate… 

  • Bob Forsberg

    If Foxconn doesn’t get what it wants will employees start jumping off buildings until it does?

  • scottbodenheimer

    Brazil?  Really?  Since Apple makes such huge amounts of profit on their hardware, and since it is after all the most valuable company in the world (or number 2 depending on stock fluctuation) it would be really nice of this American company to put their next hardware factory in the USA where Americans could perfect high tech technology fabrication on a mass scale. Maybe Apple board members have never heard of Henry Ford – and how paying your workers enough to afford your products helps increase market share.

  • Diogo

    I don’t see why a factory in Brazil makes any difference for
    people outside Brazil and I hardly believe that one day we will have some iPad
    factory, for me that it’s just ‘marketing’ (for the lack of a better word) from
    ours politics, since the price for an iPad down here it’s more than twice the
    price from US and they promisse to reduce than over 40%.

  • Eduardo

    If Americans accept a $1.50/hr pay rate, Apple will go for it. It may be the “coolest” company, but in the end of the day has to make a profit by using underpaid Chinese workforce.
    The point is that Brazil does not comply with the inhuman Chinese culture when it comes to work relations. And never will. 

  • Lifetriumphant

    Sir,
    The implications of such a “radical” business model would implode the economy! {ahem… That is sarcasm…} Why CEOs would have to tolerate a decrease in their generous benefits packages. The diamond encrusted platinum parachutes they eject from corporations may have to be curtailed all the way back to mere gold. What a travesty! {cough… Also sarcasm} Stock holders would have to start playing the long game instead of the instant wealth lottery they’ve grown accustomed to. Why would you suggest such a horrifying reality? ROFL!

  • Cowboy Ron

    Oh those clazy demands…

  • steffen_jobs

    i sure taught those crazy, capitalist asians how to negotiate!

  • Anthony M Perez

    Oh, God forbid we move the jobs to American soil. We have so many jobs here in the U.S., we don’t need any more. Another company that thinks profits before pride in the country where it’s located.

    Way to go, Apple!

  • Ciclismo

    I’m sure many companies would love to have products built in their home countries, but the fact is that consumers are not willing to pay the premium it would cost to do so. It’s not the companies who are at fault for moving jobs to countries with cheaper labour, it is the consumers and investors who are to be held responsible.

  • Ciclismo

    “MADE IN CHINA now has some prestige to it.”

    Yes and no – there are plenty of examples where Chinese labourers are only used for the simplest tasks – check out many Sony products such as the PSP, they don’t say “Made” but only “Assembled in China”. All of the complex parts are manufactured in Japan, Taiwan and Singapore, and then just put together like a cheap Lego house by workers in China.

    I also know of several companies (first hand knowledge after talking to their Product Managers) who are moving contracts to other countries because the cost of being consistently ripped off is far exceeding any profits.

    We got scammed by two different companies to the tune of almost half a million (each time) – they took the down-payment, filled the containers with products that were so poorly produced that more than 50% were useless, and when we came to make a claim, the same guy we had talked to initially, sitting in the same office of the same factory, just said “look at name, we new company now, old company bankrupt, go away”. I heard he then called the cops (his mates) to then remove our representative from the factory. The products are now being produced in Taiwan – costs around 15% more upfront, but is more profitable in the long run.

  • George

    Really, as an Brazilian businessmann I can tell something for sure based on my own testimony: Brazilian’s labor laws is insanely hard. They’re always for the labor and against the company. If Foxconn thinks that they will apply the same rules they do in China in Brazil, they’re completely wrong.

About the author

John BrownleeJohn Brownlee is a Contributing Editor. He has also written for Wired, Playboy, Boing Boing, Popular Mechanics, VentureBeat, and Gizmodo. He lives in Boston with his wife and two parakeets. You can follow him here on Twitter.

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