Foxconn’s plans to build a $12 billion factory in Brazil dedicated to producing iPads is “in doubt,” government officials in Brazil told Reuters. Reportedly, negotiations have stalled because both sides have yet to reach an agreement on tax breaks for Foxconn. Additionally, Brazil may not be able to populate the factory with enough skilled laborers. Worse still, Brazil has been tasked with building infrastructure for the 2014 World Cup followed by the Olympics two years later. Skeptics argue Brazil will not be able to finish all of the construction required for the two major sporting events and create Foxconn’s proposed “intelligent city” outside of Sao Paulo. Read on for more.
“The talks have been very difficult, and the project for a Brazilian iPad is in doubt,” one official told Reuters, noting that Foxconn has made “crazy demands,” in the country. “The negotiation is rather complex. The situation for structure, technology, energy, logistics, it’s all very complex,” Brazil’s Science and Technology Minister Aloizio Mercadante explained. Oddly, Mercadante also told press earlier this month that Foxconn was already prepared to begin production at a plan in Jundiaí, Brazil. “We’re dealing with a lot of issues, like the [Foxconn] trying to figure out how to do business in Brazil … and Brazil figuring out how to produce these complicated products,” another Brazilian official said. “Maybe we will end up starting with something smaller.”
Reports surfaced on September 26th that Apple was cutting iPad orders by 25% for the fourth quarter of this year, although there was also speculation the 25% cut was simply a shift from Hon Hai’s Chinese plants to Brazil-based factories.