This makes a lot of sense!!
Foxconn already has a facility in Mexico. They take advantage of the RFE program to achieve lower import duties and greater ease of shipping. Mexico and USA have NAFTA. No import duties = Higher Margins. Call me crazy, but I am of the belief that Macs are still prohibitively expensive for most of the world.
The VAT in Europe doesn't help. Mac Book Pros are nearly $2000 for the entry model, and support services for them are not as easy to come by. My guess is that the USA, Canada, and the UK are the largest markets for Macs.
An employee in the USA costs $30-40k per year, maybe 50-60k with benefits. When you account for efficiency, and no duties, the savings makes a heck of a lot of sense. Also, at this rate wages in China will be 50-80% of those in the USA in 5-10 years. My bet is that they have a supply chain directed at Mexico that they will utilize for parts. The parts are shipped to USA for assembly, along with certain parts that will be made here. They will probably also qualify for incentives for utilizing American labor.
I have no idea what other incentive programs exist, but I am confident there are many. I somehow doubt that Foxconn would agree to take on a 100million dollar endeavor for the fun of it, even with the money coming from Apple.
I have a very hard time believing this won't benefit Margins, and produce an efficiently dispersed supply chain, and assembly line that conforms to the realities of a developing world. It's the same thing that happened in Brazil.
IPad minis are not being produced in Brazil as an act of good will. The government made it very worth their while.
Remember, the next time anyone insults Apple, you can respond "At least I support an American company that produces 500k + good American Jobs.
To wish for Apple to fail is to wish for the global economy to fall into oblivion. Furthermore, Apple supports development in China. Wages rising in China by 500% over the past 10 years is due to the factories, and development that has been built to support companies such as Apple.
Contrary to the myth, workers in China, at least those at Foxconn are not slave labor. By Western standards they were until about 10 years ago, but a lot has changed. The Cultural Revolution was not a good time. China has come a long way in the past 20 years. American companies are not, and have never been responsible for the poor working conditions. China, a communist country, was not always the friendly, accessible, capitalist utopia it is today. The political and social repression you read about is a spill over effect from another era that will diminish with time. Speeding up this process likely not a good idea. It's still not perfect, but get with reality, the early late 19th century, and early 20th century wasn't a nice time for a number of demographics in America.
Google the Industrial Revolution and all will make sense.
Makes sense to me
