Brazilian billionaire hopes to court Apple for device assembly

-
\
-

Brazilian billionaire... try to say that 7 times fast.

Let's all just say Brazillionaire.

Well, if he can build the factories, pay the employees fairly and offer lower costs.....why not? However he better be able to deliver the demand Apple will place upon his company.

If there is any truth in this report:

http://sacom.hk/wp-content/uploads/2...nes_sacom3.pdf

I hope Apple start manufacturing elsewhere. The idea that Foxconn didn't actually raise the wages of it's staff, and just announced to the press that they were going to in order to get the focus off the suicide issue is very troubling.

I'm guessing Apple would be willing to work with production in Brazil. Spreading production to different areas reduces the risk of something going wrong with the supply chain. As long as his factory can produce the quality Apple demands and at the volume they demand, it could be a go. And to reduce our dependency solely on China for products is a good thing. Not as good as building locally, but still better than sending ALL our wealth to one country.

Brazill is about double the Chinese per-capita wage but it is worth a shot.

I agree with all you say. It seems a sensible idea to at least consider for sure.

Heck he even has a company called OSX.

How about investing in an automated assembly plant in the US? I am not talking about California, but there are other states where land is dirt cheap, labor costs are low with no unions. The states should be able to give tax brakes. Apple can lobby for accelerated depreciation for the plant or even expense a huge percentage.

With automation and economies of scale, shorter supply lines, the cost structure could be competitive,

I don't know the economics of this, but wouldn't it be nice if Apple actually manufactured it's products in California and a few other states? I am sure Californians could use it these days. And why not Kentucky? I would love to track my new MacBook Pro on it's journey from Hemit, California to Ontario International Airport and then to Montreal.

As I said, I don't know the economics of it, but I certainly could imagine the GREAT PR it would get if Apple said tomorrow 'we are moving all our manufacturing jobs to the US' ! It would make a huge statement to the rest of the big businesses who are sitting on top of huge cash surpluses while millions of Americans are out of work. That kind of good PR would have to generate income down the road.

The only place that Apple should produce its products is here, at home in the USA.

Enough already with sending labor overseas and 10% unemployment here, while letting Wall Street tell us how well we're doing! We need to produce everything, and then sell the products we make. The current situation is simply not sustainable.

If Brazil would do away with their anti-import tariffs, you wouldn't need to produce the products in-country. Their protectionism is amazing and the fact that companies have to build product there to avoid the penalties is just dumb. Let them pay twice of what everyone else does until they open up their market to the rest of the world.

A diversified manufacturing base for Apple is in their own best interests. But... Brazil's popluation is under 200MM, and they don't really have expertise in this area, do they? I would think they would need to get a Hon Hai or the ilk to run the thing.

Interesting concept though. Hope a factory comes to the US as well eventually... but just for domestic consumption rates.

Then Apple store would look like:

iPad - From 1299$
iPhone - From $999$
iPod classic - Just 677$
MacBook - From 2499$
MacBookPro - From 2999$
....

I am by no means an expert on this topic, but I'm fairly certain that it's not just the wages. The way the Chinese economy is set up, it would be cheaper by far to do an automated factory in China than the USA, so even if they could find a way to make an automated USA factory competitive with the current factories in China, if they transposed that new automated factory to China instead, then they would save even more.

The reality is that these kind of jobs are *never* coming back to places like the USA/Canada/UK etc., and that this kind of job loss is more structural than situational.

I have said this many times on this blog and always been shouted down and told automation won't reduce costs. I would have thought it would too, especially as I bet Apple / SJ could design a new paradigm shift in automation!

I vote for Florida so my deliveries are even faster

Oh yes, let's exploit our own workers by low-balling their salaries and denying them benefits. If China and others had real independent labor unions like ours there wouldn't be the sweat shops that keep the costs of our consumer goods so low.

Yes, bring the jobs home, but make them good jobs that can allow a family to send their kids to college or trade schools, not just subsist in Appalachia.

While I think it would be great to manufacture apple products here, The price for their products would skyrocket and the profits would plummet.

There wouldn't be any benefit in terms of tax or labor savings. Economies of scale and automation work in china as well as here and I would guess they are utilizing them. Assembly factories in the U.S. would increase supply lines from right next door to half way around the world, not shorten them.

Always the same answer.

In Germany, people keep buying Mercedes and BMW at prices twice that of a comparable Lexus. Why? Because if they would buy a Lexus their money would leave the country and they would have to pay the unemployed in their own country. It's a double-edged sword. It works there, why would it not work here?

Why would a high-tech automated assembly plant necessitate low wages? Fewer low or semi skilled workers perhaps but no reason why there shouldn't be plenty of well paid skilled people. Look at the potential in the new cloud plant in the Carolinas. Plus all the spin off potential for local business.

I am all in favor of getting large corporations manufacturing out of China. Us Amercians have been so spoiled with cheap products from China that we are terrified of other nations manufacturing our products for a bit more. If Brazil can manufacture our products with their workers getting paid a descent salary, costs stay fairly the same, and maybe even Apple takes a little bit of a hit on their bottom line, I am totally willing to pay a little more money. China already owns us, we have to stop this before they also control us.

The problem with moving this work to Brazil is that most of the component suppliers are located in and around China. So, you'd either have to relocate these as well, which would not be possible in many cases, or pay the higher costs of shipping components to Brazil, as well as the costs of shipping the final products.

I'm sure unemployed workers in the US would be able to find lots of job offers if they only asked for $.40 and hour, which is about what the Chinese workers are earning.

I would reserve judgment until more information is known about his track record vis a vis the environment (think rain forest deforestation, etc) and about how he has treated his workers in a country well known for desperate poverty, and for downtrodden native populations. Just because it is in the western hemisphere doesn't make it necessarily better for the workers in Brazil than China. Due diligence is in order. NO ONE gets 27Billion dollars without tredding on someone somewhere, unless he is a saint in disguise.

This has got to be the day with the most rubbish apple news in a long while.

Apple already employs 50,000 people, mostly in the U.S. Sending a few hundred, or even a few thousand low-end assembly jobs to Brazil or China just doesn't mean much. In fact, those low wage earners doing all that grunt work probably contribute greatly to Apple's ability to employ 50k people by keeping product prices low and Apple profits high.

In fact, Apple has hired over 12k people just this year, so if cheap labour overseas means that many hires in a single year in the U.S. then I say Apple should do all its manufacturing over there.

no chance. many of the chip development is from taiwan (chip capital of the world). china just provides the main labor while taiwan provides the technology, and apple provides the designs. nothing will be moved to brazil.

Actually, China is not very advanced on automation. I was in China last year and went to a GM plant in Shanghi. There was little automation because the machines cost a lot more than what it costs to pay dozens of people to do the jobs.

I also spent some time in Guangzho (Canton) where much of the worlds electronics are made. You can literally buy products there for pennies on the dollar. I was dumbfounded trying to imagine how a product I might pay $200 could be made for less than $20. It seemed like the parts would have been more expensive than that.

China will dominate this area for a long time because they have a virtually endless supply of labor for whom almost any wage is an improvement over the life they previously had out on some farm. I think it would be great to have Apple go to Brazil, but I doubt they have the economic capability to produce things as inexpensively as China can. And in addition, if China starts losing manufacturing to other countries, all the government has to do is to subsidize the industry and prices will drop again and bring it back. I wouldn't want to be competing against the Chinese for this kind of work.

But at a fraction of the distance to China. That matters too.

I agree that for ALL American companies (or companies from any country), job creation at home should be their number one priority. So many jobs have gone overseas yet everyone in the US seems to be wondering why their economy is collapsing. If seems pretty basic, if people don't have a good income they can't spend at home and keep their own economy afloat.

That said, if American companies are determined to keep jobs out of America and follow the cheapest labor (the 'China Price') then why not give Brazil a look, providing that IN LAW they provide for a good solid wage and better working conditions for their workers. Brazil might not be perfect but it's in our hemisphere and they have, at least internationally, a bit, perhaps a lot, more respect for basic human rights and freedom of expression than does China. It surprises me that Apple is quick to set up (sweat)shop in China but ignores a much freer and far less dangerous country in its own backyard - Cuba!

Our ridiculous taxes are the real problem. As much as I would like to be able to buy a Mac mini for less than $1500 or an iPod Touch for less than $400.... it just seems too good to be true.

Whaddya mean, "our wealth".

Absolutely true! But I'd still favor Brazil over China simply because China is getting far too big for their boots these days and they need to know they can't dictate their terms to every nation on earth.

I'm not speaking of Chinese people here of course, but the Chinese government.

.

Some time early next year, I hope that Apple will embark on a OiPC program (One iPad Per Child) that builds upon the OLPC program.

One thing that an OiPC program could include is assembly, repair, maintenance of the devices in the targeted underdeveloped countries -- i.e. using jobs and self-sufficiency to boost the underdeveloped economy.

Further, this could be expanded to include jobs to support the ecosystem around the OiPC. Things like the WiFi stations, Cloud centers, Training, Programming, centers, etc.

Think of it: an underdeveloped village could deploy OiPC devices as well as a local support center -- where equipment and tools necessary to create OiPC apps could be made available to the very children targeted by the program.

The benefactors, the children, of the OiPC program could use existing apps to create art, paintings, music, videos that could be offered for sale through a special media store.

In addition, the children could learn to develop their own apps and sell them on a world-wide OiPC app store.

What better way for the benefactors, the children, to give something back to OiPC -- than to become a self-sufficient member the local society and economy while providing a role-model for those who follow.


That's what I hope for the promise of the iPad -- it's bigger than just Apple!


And, yes... I'll put my money where my mouth is -- I will happily support a BOGI (Buy One, Give It) or BTGB (Buy Two, Give Both) to support a OiPC effort.

.

As a Brazilian citizen working overseas, I can only hope this is true, for the following reasons:

- Brazil is the second-biggest Western democracy behind the US;

- Even though the US and BR have their share of rivalry due to trade disputes, geopolitical competition and differences on foreign affairs, we are much more alike than many people know;

- Both countries are Western immigration-based States with a melting pot of ethnicities (Brazil: 55% white, 30% mulatto/mixed, 10% "pure" African-Brazilian and 5% Asian), an overwhelmingly Christian population and a welcoming/open culture that receives pretty much everyone without the cultural or language barriers of places like Northern Europe or Asia;

- Brazil, as the 8th biggest economy in the world, has a VAST industrial park and lots of expertise in the field, with many companies already producing high-tech and IT components down there, not to mention the world's third-biggest aircraft company and diverse defense companies;

- Due to nowadays' currency wars, it's clear that Brazil has to reduce its so-called "Brazil Cost" in order to improve competitiveness - this move will simply accelerate that trend, especially in terms of high import taxes that derive from a history of closeness and import substitution (just google "Unitron Mac" to see what I am talking about);

- Eike is probably one of the smartest entrepreneurs in the world today - he normally gets EVERYTHING he wants, so it's gonna be no surprise if he becomes the richest man anytime soon;

- Brazil is a MUCH more expensive country than places like China, with wages and living costs WAY higher than Asian sweatshops - no wonder you don't hear about companies "outsourcing" to places like Brazil like you do for truly cheapo, underdeveloped and overpopulated places like India or China - cost factors alone are not attractive when one thinks of Brazil - but the labor market is much more diverse, dynamic and competent than the average Asian place, especially in the industrialized Southern region;

- We all speak ONE single language and have no internal terrorism/sectarian problems or natural disasters like many others (although urban violence is still a concern in some areas);

- We have the hottest girls on Earth, bar none;

- And NO, we are NOT "Latinos" in the formal US sense of the term - we have virtually NO indigenous population, we don't speak fucking Spanish and we don't share any values with other Latin American countries - Mexico is much closer in every respect to the US than to Brazil.

So bring the Foxconn workers to Acu and pay them more than they got in China and less than the per-capita wage in Brazil. The shorter shipping distance just might make up the difference.

I totally disagree. Every government and society on Earth needs some form of taxation in order to function, it's what you DO with that revenue. Some countries like Finland or Australia or Canada pump lots of that tax money back into things like supporting domestic industries, health care, or more or less free university tuition. Others (us) choose to subsidize 700 US military bases overseas or start and prolong unnecessary wars overseas, leading to our troops being sacrificed for no great end. Or to spend hundreds of billions bailing out Wall Street's corporate welfare bums.

The difference is that Canada, Finland and Australia aren't thirteen trillion dollars in the hole, but are actually running surpluses. The Finns also have the highest education standards on the planet. Maybe it's time we swallowed some of our pride and admit we have a few things to learn from others, just as they have learned a few things from us.

Agreed. My only qualm with Apple is no manufacturing in the US. But the reality is, China labor costs are $1 an hour.

American autoworkers (including Japanese transplants) are making about $28/hr, Mexicans, $7/hr., Indians $4/hr and the Chinese $1/hr.

There in lies the realty!

And German construction contracts, as far as I know, go to the contractor who can guarantee the highest quality. Not to the lowest bidder. That indicates a completely different cost/benefit calculation than in China and the US. Low initial cost isn't necessarily better than higher initial cost amortized over a longer product lifespan in Germany.