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Foxconn to Invest $12 Billion in Brazil With iPad Production to Begin by November?
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Whoever said that was hard to understand? Not me!
This is a big problem (and has been for 30+ years)...that everything we buy in the USA is made somewhere else...USA no longer manufactures except for our junky USA cars.
Sure...at some point when this all started decades ago, it WAS cheaper to build certain things outside the US...but then everyone got on the bandwagon and now it's the norm. (Thanks politicians!)
The "it's cheaper to build outside the US!" is a bogus argument and has become an evil of our own doing.
If it costs X to build in the US, please don't tell me it costs 1/10th of X to build, import, pay taxes, blah blah blah, to get it back into your company's hands.
We can all agree that some things, yes, are easier and/or cheaper to build outside the US for a variety of reasons. Our USA system needs some serious overhauls to get stuff to be built back in the US other than screws and toilet paper.
Like you, I'm not familiar with the details of their business model. Some of what they manufacture might be labor intensive, and some of it might be built on a robotic assembly line. Trying to figure this out from that Wikipedia article will be nothing but speculation.
Evil and stupid
Strange as it sounds, this move manages to be both evil and stupid.
In contrast, I've been impressed by Asia automakers such as Toyota, Honda and Kia. They've moved most of their production for U.S. consumption here and have wisely avoided the horrors of unionization by paying well and treating their workers with respect. Their U.S. factories show that American workers can compete quite well with workers in Asia.
I'm far less impressed with Apple and particularly its unwillingness to build in the U.S. Their products bear the label "Designed in California" for a simple reason. Their executives care little for this country as a whole and anyone who lives outside a few affluent enclaves on the West and East coasts. And they seem actually proud, inordinately so, of exploiting China's cheap labor. That's why "Designed in California" is followed by "Assembled in China." Snobs and serfs. That's their world.
If you want an good illustration of that mindset, check out what Obama told the Silicon Valley elite during an exclusive campaign fundraiser in the Silicon Valley in 2008 or read his 'bitter and clinging to guns and religion' remarks in Pennsylvania.
Strange as it sounds, this move manages to be both evil and stupid.
- It's evil because it suggests that both Foxcomm and the titans of Silicon Valley have found another exploitable source of cheap, desperately poor labor 'just in case' something happens in China--say a major earthquake like that in Japan or moves to throw out China's aging dictatorship much like that now taking place in the Middle East. Standing by itself, you might call this move shrewd but evil.
- But it's also stupid because it rewards Brazil for its aggressive mercantilist policies. Other countries, particularly in Latin America, are likely to take note and follow. In fact, they'll be foolish if they don't.
In contrast, I've been impressed by Asia automakers such as Toyota, Honda and Kia. They've moved most of their production for U.S. consumption here and have wisely avoided the horrors of unionization by paying well and treating their workers with respect. Their U.S. factories show that American workers can compete quite well with workers in Asia.
I'm far less impressed with Apple and particularly its unwillingness to build in the U.S. Their products bear the label "Designed in California" for a simple reason. Their executives care little for this country as a whole and anyone who lives outside a few affluent enclaves on the West and East coasts. And they seem actually proud, inordinately so, of exploiting China's cheap labor. That's why "Designed in California" is followed by "Assembled in China." Snobs and serfs. That's their world.
If you want an good illustration of that mindset, check out what Obama told the Silicon Valley elite during an exclusive campaign fundraiser in the Silicon Valley in 2008 or read his 'bitter and clinging to guns and religion' remarks in Pennsylvania.
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Exactly. Our economy did not go down the crapper because of lack of manufacturing...but it certainly doesn't help.
How is it that in THIS ECONOMY the US Gov't can't entice Apple/Foxconn/whoever to build here in the US?! Come on...you're telling me that the US Gov't either said a)nope...not gonna budge...our policies/rules are the same or b)here's our best offer (yet it was still much worse than opening in Brazil?!)
$12 Billion is a lot of money for a company opening a manufacturing plant.
As for your tax comment...I've always wondered and firmly believe that 100% of all US citizens should pay the exact same tax rate. Whites don't pay differently than blacks right? Catholics don't pay more than Muslims right? Aren't we all supposed to be "equal" in this nation? Make the darn tax rate something universal like 20% and every SINGLE YEAR we all know exactly what we're paying and the gov't knows exactly how much they're getting. Budget problems and crying will be basically wiped out.
You are still not getting it. It does cost a fraction to build things outside the US.
The US minimum wage is $8.25 per hour in many states. The minimum wage in a country like the Philippines is about $0.71.
Because of labor unions and their regulations, a manufacturer typically needs to pay significantly above minimum wage anyway, PLUS benefits like health insurance cost way more. In the Philippines (which I bring up because I employ people there) health care cost about $10 per worker per month. Here in the US it can cost several hundred.
Payroll taxes are no picnic either. Typically, in the US the total cost of hiring a worker when you factor in payroll, admin, benefits, etc. is that worker's salary + 25%.
Labor is one of the biggest expenses any company has. Manufacturing requires a lot of labor too. You need people to operate machines, fix machines, load products, even assemble certain items by hand in some cases.
So you can easily do the math. Where in one country you can get people for a dollar an hour to work and in other you get them for $10-$12 an hour, clearly the cost to operate in expensive country is 10x as much. That means you have to raise your prices that much more.
Now all total manufacturing expenses aren't 10x more, since raw materials will typically cost the same anywhere in the world and there are some overhead expenses as well, but that labor difference is still huge when you consider a company like FoxConn that has 920,000 employees.
Moving to the US would mean they would effectively have labor costs as if they were hiring 10 million employees instead of 1 million. You can't say that wouldn't make them raise their prices several fold to compensate for that.
You can run the math yourself based on their number of employees, average wages in China, average wages in the US and their profit margins.
Anyone who thinks it costs the same or only slightly more to produce here is living in a dream world.
What are they manufacturing, and what percentage of Foxconn's output is represented by that type of product?It looks pretty labour intensive to me...
Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_3_1 like Mac OS X; en-us) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8G4 Safari/6533.18.5)
Finally a comment from someone who actually knows what he's talking about.
If you want to red pill of anything real meaningfully, start listing to Noam Chomsky.
Finally a comment from someone who actually knows what he's talking about.
If you want to red pill of anything real meaningfully, start listing to Noam Chomsky.
Sorry to burst your bubble again, but not all manufacturing requires a lot of labor. Painting all manufacturing processes with a broad brush is disingenuous. I've seen my share of robotic assembly lines, and as far as I'm aware, robots are not labor.
I don't know about the USA but in Europe it's a legal requirement to display the country of manufacture so it may be nothing more than that
I don't know but the picture was with a story about phone manufacturing. I think all of FoxConn's output is high tech so it will be high tech of some sort.
Here are some more pictures of FoxConn's assembly lines
They are all pretty labour intensive
Thank you. Don't forget to add the corporations to that flat tax in addition to eliminating all tax loopholes/breaks. Cutting NPR and Union collective bargaining rights are not going to solve our fiscal mess. If we can't openly discuss the stupid wars then move the spotlight to the Corporatocracy this country has become.
Dang Chinese US companies!
So the US should penalize a Chinese company for building a plant in Brazil? Good luck with that.
I laugh at this topic...because it's been yapped about for weeks..."just cut NPR and we'll save $40 million!" Wow...$40mill out of trillions. Yeah, great concept. Why don't we cut out public museums, libraries, and parks while we're at it.
I actually listen to NPR...basically because it's on the classical station I tune into. NPR may be a bit on the Democrat side, but overall I find the stories are at least real news...while offering both sides of the argument.
Queue all the Fox News freaks...
Apple's unwillingness to build in the US? What company in the US has the manufacturing facilities of Foxconn? I agree it would be great if the devices were produced here, however supply would be much more constrained that it currently is.
Here in Brazil we have high taxes. Taxes are high and public services are of poor quality. The cost of labor is quite high, due to all the labor bureaucracy that punishes both employers and employees. The purpose of mounting the iPads here in Brazil is that they would not be able to pay some import taxes and enjoy some tax incentives that the Brazilian government grants to companies that assemble their products in national territory. Furthermore, we live in a fake democracy, in which the State is only concerned with lining their own pockets, leaving the needs of the Brazilian people in the last plan. That since 1500.
People already piss and moan about it. If apple really wanted to have a low environmental impact they would build their products where they have Higher standards for environmental quality.
They do. Changed their packaging to minimum needed as best as possible.
Using material that can be recycled, pcb free cables etc.etc.
If they give the production to FoxConn they can only get involved to a certain point. Too much demands on their partners and they won't get any production.
The Chinese and other countries have and still are learning that at the end of the day, they need trees, clean water etc., so they do adapt.
Because there is a lot of new technology out, they go through the environmental adaptation process faster than others in previous years.
As discussed in other similar threads, this represents EXCELLENT news for both Apple and Brazil for the following reasons:
- This is gonna provide Apple with a MUCH stabler production site in terms of governance, workforce and overall environment, along with way lower shipping costs (after all, Brazil is the second-biggest Western democracy in the world, not an Asian sweatshop);
- Lower prices will finally allow Apple to tap into that gigantic market, with a majority of middle-class consumers as well as one of the most demanding upscale societies;
- Brazil is gonna benefit from positive spillovers in terms of a skilled workforce cluster and much lower costs for Apple devices in the country - Brazil is, today, the place where you'll find the MOST expensive Macs, iPods and iPhones in the world due to high import taxes;
But it's important to clarify what some people (especially US citizens) tend to think about Brazil:
- Brazil does NOT have cheap labor as in Asia - in fact, the country is already the world's 7th economy and among the MOST EXPENSIVE in the globe in terms of overall labor AND living costs (due to extensive social security obligations and a booming economy), especially in the rich area of São Paulo. This is definitely NOT a reason for Apple to have a plant there.
- And no, we DO NOT speak Spanish nor are we "Latinos" (defined by the brother from the North as those Latin Americans of hispanic background); in terms of gene pools, Brazil is, in fact, overwhelmingly European (between 65 and 80%, depending on the region).
And finally, PLEASE correct the family name of the Brazilian Minister of Technology: it is "Mercadante", not "Mercadente".
There is a legal requirement when importing to show the country of manufacture, BUT if a company changes the character of the product it imports it qualifies as made in USA.
Depending on the product the manufacturer then lists something like Made in USA with some parts from (put in Country)
Peopel don't rea dthat stuff anyway.
They read:
Today only $ 1.99. Buy one get one FREE!
and then throw the packaging away.