“A much-hyped $12 billion plan for Taiwanese manufacturer Foxconn to produce iPads in Brazil is ‘in doubt’ due to stagnant negotiations over tax breaks and Brazil’s own deep structural problems such as a lack of skilled labor,” Brian Winter reports for Reuters, citing “government sources.”
“The idea for a ‘Brazilian iPad’ prompted immediate skepticism back home, where factories have struggled for years with high taxes, an overvalued currency and a lack of qualified workers due to poor education and a tight labor market,” Winter reports. “The expected start date for production was first set for July, then delayed to November. Now, it is unclear whether the project will ever get off the ground, at least in the form that it was originally envisioned, the officials said on condition of anonymity.”
Winter reports, “Folha de S.Paulo newspaper reported on Thursday that funding for the Foxconn project from the BNDES state development bank — without which the initiative would likely collapse — was in danger of being withdrawn… If the project does fall through, it could become symbolic of Brazil’s struggle to meet high — and perhaps unrealistic — growth expectations this year. After expanding 7.5 percent last year, the economy is now forecast to grow just 3.5 percent in 2011, which could put it last in the BRICS group of large emerging markets, and near the bottom of Latin America. The issues holding back the iPad — high taxes, bad infrastructure and a shallow labor pool — are routinely cited by business leaders as the main obstacles to higher growth.”
Read more in the full article here.
[Thanks to MacDailyNews Readers “Brawndo Drinker” and “Carl H.” for the heads up.]
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