iPad maker goes Brazilian
iPad and iPhone maker Foxconn is considering a big investment in Brazil. Foxconn is a huge group with annual turnover of $62bn and about a million employees, many in mainland China; it claims to be China's biggest exporter. It runs the huge Shenzhen campus, which has been the scene of worker protests and suicides. It makes parts …
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Impressive numbers until you put them together.
So that is about $6k turnover per employee, per year. Doesn't seem to leave much room for plentiful wages to our standards. It is interesting how those companies steadily move further inland. The government still regularly brutalizes the people but their gradual industrialisation seems to be relatively controlled. Not sure what Brazil would have to offer, but as a hedge against too much Chinese state interference it might make sense. Then again, maybe the Chinese government has no problems with it because they figure they'll "pwn" Foxconn anyway. Even so, global diversification might make sense.
Mea culpa
And so it is. That still leaves a bit to be desired, as I doubt more than half the running costs will be wages. Perhaps should have a gander at their yearly statements, if this ham-handed so-not-a-hack can manage to find them.
title
Yeah, they're totally "brutalizing" people by moving inland. Oh wait, the Chinese government is FORCING them to move inland because it raises the standard of living and improves the economy.
Of course, once the economy improves it will be time to head to a new BRIC or developing country.
Building in Lat Am
There are good reasons to manufacture in Lat am from a tax perspective. There are substantial import taxes into Brazil. There are also good government grants for setting up manufacturing there. Couple this with a great growing economy thanks to stability of the banks and it's a good market.
Simon
that's putting it mildly.
The import duties on routers/switches used to be 150% (ten years ago).
Besides, aren't there supposed to be an Olympics there in the near future? Could be that there will be some massive (and massivly empty) buildings available for use.
Or did I miss them...
make sense
to move it to countries where employee deaths are not taken too seriously.
I guess it's the old suicide chestnut?
Because 10 suicides per 1,000,000 over a few years sounds like a lot.
It isn't if you consider that the average is 140 per 1,000,000 per year [via http://en.wikipedia.org/wiki/Suicide_in_the_People%27s_Republic_of_China ]. (Though these off course are mainly by unemployed people, so higher than expected for the factory workers.)
So is a Brazilian iPad
just like a regular iPad except for a small, erm, touchpad near the, erm, bottom
A million employees? that's like HUNDREDS of employees!
With 1,000,000 employees, the company can expect over 270 suicides per year. HR would have to process more than one suicide per working day. Yet not so long ago, the news was ablaze with stories of just a handful.
But the issue isn't the suicides per se, it's the fact that the employees were treated like dirt when they were alive. So it was good to make a fuss as I believe it led to imporvements... such as safety netting...
I'd get my coat but I never removed my cloak of anonymity. Probably.
Made in Brazil
Years ago, it was "Made in Japan", then "Made in China"... "Made in India" is another one I've seen around the place.
All in the name of pushing the manufacturing cost down. My question, what is the business world going to do when they run out of second and third world countries to do their manufacturing?
More over, what are those of us in "first world" countries meant to do?
Actually "Made in Brazil" is already a reality
I have to buy stuff from the local country shops in Eastern Europe now and then. These are quite cost cautious and because everyone knows everyone they prefer not to risk it with goods that are likely to go bad.
As a result they have been switching to stuff made in Brazil for a while now. It is much higher quality then Chinese (especially stuff made of steel and alloys) while being at about the same price. Knifes and cutlery that are really rustfree and not just labeled so, knifes that actually cut on par with an old Zolingen or Sheffield. Their plastics are also not bad (they recycle a large portion of EU and UK plastics for us).
I would not be surprised if we see the same shift in the UK in a year or two and frankly I would not mind if "Made in Brazil" relegates chinese goods to the dusty "dodgy" corner in half of the supermarket departments. It is a change for good. On more than one count.
Easy
The business world reduces parts of the first world to third world standards, then move manufacturing there ...
Seriously though, it's not likely that they'll run out. By the time we run out of poor regions/countries to export manufacturing to, we'll either have reached technological levels that put us all in a Jetsons-like future, or we'll be fighting the giant mutant cockroaches for the remaining tinned food ...
Re: Made in Brazil
> All in the name of pushing the manufacturing cost down.
Actually, setting up and running any kind of business in Brazil is very expensive compared to China, Vietnam, etc. To compete with them, the product quality (and price) usually is higher than the cheap stuff from Asia.
title
By the time we run out of third world countries, many former first world countries will be third world countries. Doesn't anyone study economics anymore?
RE: Made in Brazil
suicide?
Why did it took you so long to realise this anyway. This is being going on for several decades now.
Corporate greed dictates the world economy today. Creating this superficial thing called "developing markets" which in reality is no more than "large scale exploitation of low/no income, non/low educated workforce". It's disgusting!
wage inflation?
You mean Chinese people want a decent standard of living too?
Shocking, truely shocking.
I guess that means we won't be able to buy everything for peanuts anymore.
@Dazed and Confused
We will be able to afford it as long as China continue suppressing the real value of their currency. If we had to pay what things actually cost, we couldn't afford it already.
I was talking about Foxconn with some of our Chinese developers the other day - they were looking to hire another dev, found someone suitable and offered him the job. He didn't seem to like the pay that was being offered, and said that he would earn much more working for Foxconn. Yes, replied the lead dev, but you will be dead in six months. Boom boom.
RE: we couldn't afford it already
That's because CEO's recieve excessive big bonusses while eating from 2 shores (the low-income, low educated workforce and high paying first-world "customer").
You make it sound that consumer products would cost so much more when made locally in first world countries. They would not! If CEO's and managers were paid normal fair fees for the actual work they do. The same with politicians and "high-ranking" government ppl. But then again there wouldn't be an outrageously richest man of the world, would there?
And because labour would remain in these first countries (and many western governments earn tax from work-income) overal taxes would be lower and living conditions would become better for us. Now we're currently profiting from low quality chinese crap while our incomes and savings diminish slowly. When all our chinese crap electronic gadget has broken down and we have no more money left to pay for replacement THEN we'll realize what we have done.
But now I probably sound like a "filthy communist". Oh well, see you at the pawnshop.
can we grow up?
Why is FoxConn automatically associated with Apple? Apple is not even its biggwest client, and nearly every one of the major retail tech firms has products being made there. Of the suicides and other issues there, few if any have even happened to folks assigned to Apple lines or in Apple used areas. Apple has some of the tightest controls and standards in place for FoxConn of anyone they make stuff for, and they're one of only a handful of companies that do routine on-site inspections of those standards including record reviews, and go further to have "surprise" inspections routinely.
FoxConn has more employees at their China facility than the capitol city of my state has total residents. Less than 10% of those people work on Apple gear. Stop associating the two, please.
yes, we can!
El Reg's news doesn't say, but it is on the local media down here.
"O ministro da Ciência e Tecnologia, Aloizio Mercadante, afirmou nesta terça-feira que a Apple e a Foxconn vão produzir o iPad no Brasil até o final de novembro deste ano."
http://br.reuters.com/article/topNews/idBRSPE73B0CB20110412
The Science and Technology minister, Aloizio Mercadante, said this Tuesday Apple and Foxconn will manufacture the iPad in Brazil starting the end of November this year at most.
title
Not all Foxconn products are Apple products,
but all Apple products are Foxconn products.
Looking for future 3rd world countries?
If Apple, et al, are looking for 3rd world countries for a future manufaturing site, might I suggest the USofA? By the time they exhaust a few more labor markets the US will have attained 3rd world status (if it hasn't already).
The Welcome mat is out here for job opportunities.
More over, what are those of us in "first world" countries meant to do?
Well we could educate our children in science and technology, send them to university and move up the value chain so we are designing the ARM cores that go in the iPads.
We could invest in high tech manufacturing so that we can make things with automated assembly lines instead of needing millions of cheap workers.
Or we could just open another branch of "scented-candles-R-us" and make reality TV shows about shopping there.
Just to digress
You guys do realise that 1st, 2nd and 3rd world have nothing to do with economics?
1st world is US aligned
2nd was Soviet aligned
3rd world means non-aligned - not poor
Third world
It hasn't been "third world" for, oh, over 40 years, except in the media.
It's actually "majority world" and "minority world".
Guess which one we are in.
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