Apple and Foxconn’s Brazilian promise falls short

brazilA plan by Foxconn and Apple to wow the economy of Brazil has turned out to be a bitter disappointment.

Foxconn agreed in April 2011 to make Apple products in Brazil and President Dilma Rousseff promised that up to $12 billion in investments over six years would transform the Brazilian technology sector.

It meant that a new supply chain would be created, generating high-quality jobs and bringing down prices of the coveted gadgets.
However as it turned out none of that happened.

Foxconn has created only a small fraction of the 100,000 jobs that the government projected, and most of the work is in low-skill assembly. In fact Brazil’s technology sector has not been improved and there was not much of a local supply chain.

True the plant is making a lot of iPhones but they carry a a retail price tag of nearly $1,000 for a 32-gigabyte iPhone 5S without a contract. So locals do not even get the benefit of a cheaper phone.

In fact Brazil has poured cash into the Apple/Foxconn dream and ended up with sod all.

The economy currently hovers close to recession and the productivity of Brazil’s workforce is stagnant.

As far as Jobs’ Mob is concerned the scheme is a total success. iPhone sales in Brazil have still been rising. Wholesale shipments increased more than 40 percent to 2.9 million last year, according to research firm Gartner.

Foxconn also did rather well reaping tax benefits. It pledged an initial investment of $325 million to anchor an industrial park producing components locally within two years.

The site is dirt and bulldozers have been levelling the land since late last year.
Even the city councillor Givanildo Soares da Silva, who helped lead the push to donate nearly 100 acres of land to Foxconn, has since turned against it.

He said that people were hacked off after being told that Apple and Foxconn would bring all these jobs and it’s still just empty promises.”

Foxconn said in a statement the facility should be operational by the end of this year, bringing its Brazilian workforce to more than 10,000, though it did not provide a specific number of jobs or disclose how many are working on Apple products.