South American-Made iDevices? Foxconn And Brazil Must Meet In The Middle

Late last year, Brazilian mining magnate Eike Batista -- the eighth richest man in the world -- made some waves in proposing a $1.6 billion construction project to lure to his native country a bit of the Apple manufacturing machine. While that invitation remains in limbo, another, bigger, deal has recently come to light, this time between Foxconn and the Brazilian government itself. The offer includes a reported $12 billion investment from the Taiwan-based company to build and maintain its own facilities in Brazil (dedicating them to, among other things, iPad and iPhone manufacturing). Initially graced with eight months to two years to hammer out all the details, Foxconn is pushing its early-2012 deadline. However, according to Forbes, negotiations have seemingly improved of late, with Aloizio Mercadente -- Brazil's Science and Technology Minister -- stating during April's BRICS Summit that "a Foxconn deal to make Apple products in the country was imminent." While any such agreement would be a significant boon to Apple's abilities to meet soaring customer demand, there are some points to consider before either party is likely to sign off on the project. These have been widely circulated and are fairly reasonable by most accounts. Foxconn lists the following demands as most crucial:

• Large property to house more than one division of Foxconn.
• High speed wi-fi.
• Export priority shipping at São Paulo (and other unnamed) airports.
• Financial support from the Brazilian National Development Bank, BNDES.
• Government help in finding minority investors (Batista?).
• Transportation and logistics that permit quick delivery of goods to and from Foxconn facilities.
• Office wired 100% with fiber optic cables.

Personally, I don't know that I've ever seen such a basic list of demands. They're all obvious! I mean, I'm not a huge multinational corporation or anything, but even my needs more or less match these. I absolutely require a large property with high-speed Wi-Fi and fast ethernet throughout. My bank helps me pay for my truck, and the city maintains the roads I drive it on. If I could just get government assistance in finding minority investors, I'd be all set! But all humor (or attempts at it) aside, the list is completely feasible and altogether expected. Naturally, the government has some demands of its own. From the Forbes blog:

...Brazilian president Dilma Rousseff has asked Foxconn to hire primarily Brazilian labor, [for the] transfer of technology and the basic respect for Brazilian labor rights and laws, including the famous 13th salary, where all employees get a full month salary for a month that doesn’t exist. Foxconn CEO Terry Gou criticized Brazil’s labor laws in the Wall Street Journal late last year.

That last bit seems like the real lingering point of contention, if there is one. Still, Terry Gou calling out any nation's labor laws is a little bit odd, considering Foxconn's history of its own violations. All told, there's just too much money on the table for either side to turn away. And, since Brazilian citizens pay huge markups on imported Apple goods, the entire populace can enjoy vastly cheaper taxes on products made in-country. And we can all enjoy more iPads and iPhones!

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