Hello,
I found this article a few days back on Reuters and I thought to myself, wow.....really? It seems that Foxconn and Apple are teaming up to build iPhones and iPads in Brazil. The reason behind it seems to be that Apple is under-performing in Brazil and the consumer market there is growing rapidly as new wealth expands the middle class. High import taxes seem to price most of these products out of reach for most consumers, so why not build them in Brazil and cut prices.
But I think it's important to look beyond just producing for the Brazil market. Foxconn and Apple will most likely aim to export to the rest of South and Central America as well as the United States, and perhaps even in a few decades Foxconn will ship iPads from Brazil to China.
With China's increasing wages, raising currency and a spurt of suicides last year; it's become obvious that the cost of doing business in China is on the way up. Foxconn need to start thinking global if they want to continue to produce high-tech products. We are also less than a decade away from Foxconn opening up a plant in Africa some where as well.
For those people out there who think that China will always be the workshop of of the world, think again. These jobs now flow across borders like trade winds. The moment a country becomes too expensive or "un-friendly" companies move to other countries offering better tax breaks.
I'll never forget back in 2004 when my landlord in Shanghai was telling me how he just moved his factory to Vietnam because China was getting too expensive - and that was 7 years ago. Times are changing. The Foxconn / Brazil / Apple article is below.
___________________________________________________
Original Link: http://www.reuters.com/article/2011/05/06/us-brazil-foxconn-idUSTRE7454H120110506
Copyright: Reuters
Foxconn Brazil iPad deal facing barriers: reports
Fri, May 6 2011
SAO PAULO (Reuters) - Taiwanese electronics giant Foxconn wants to begin assembling iPads in Brazil by July, but it is still seeking tax breaks and other government concessions as part of an investment plan that could be worth up to $12 billion, Brazilian media reported on Friday.
Foxconn Technology Group, maker of Apple Inc's iPhone and iPad, announced its intention to dramatically ramp up production in Brazil last month during a visit to China by Brazilian President Dilma Rousseff.
Foxconn has moved up its desired start date for assembling iPads in Brazil to July from November, seeking to tap massive demand for the device in Brazil's booming consumer market, according to newspapers Estado de S.Paulo and Folha de S.Paulo. Their reports quoted government officials.
"It's a daring timeline. Whatever is within our reach, we're going to work on making that viable," Science and Technology Minister Aloizio Mercadante told Folha.
Foxconn's plans have generated excitement among Brazilian officials, who are hoping their country can move up the value-added manufacturing chain despite extremely high labor costs, taxes and an overvalued currency that have made business difficult for other factories in recent months.
The project could also give Foxconn and Apple a better foothold in Brazil, where high-tech gadgets are often priced out of the market because of import tariffs and production costs. Apple's cheapest iPad currently retails for about $860 in Brazil, versus $400 in the United States.
Several obstacles remain to the deal's full implementation. Rousseff recently received a long letter from Foxconn chief Terry Tou detailing several conditions for both short-term and long-term investments, the reports said, quoting Mercadante.
The company is negotiating tax incentives for production and other measures that would make it easier to import components for local assembly, the reports said. Foxconn also wants government assistance in dispatching 200 Brazilian engineers to China for training as soon as possible.
Foxconn intends to first begin assembling iPads in Brazil using imported parts, and then start producing screens and other parts locally in coming years, the reports said.
Skilled labor shortages and the likely need for a local partner in the venture have caused some Brazilian economic officials to privately question whether the total investment will reach anywhere near $12 billion, the amount cited by Rousseff last month.
The deal will also require funding from Brazil's BNDES state development bank, Mercadante said, which is under pressure to slow loan growth amid a rise in inflation.
___________________________________________________
--
Ryan Pyle
Photographer
ryan@ryanpyle.com
Website: www.ryanpyle.com
Archive: http://archive.ryanpyle.com
_______________________________________
Showing posts with label Foxconn. Show all posts
Showing posts with label Foxconn. Show all posts
Friday, May 13, 2011
Friday, June 25, 2010
Ryan Pyle Blog: Work Conditions & Suicides
Hello,
I few months back I was speaking at Columbia University and a professor sitting in on my talk asked me, "What are the labor conditions like in China at the moment?"
It was a tough question. There are, two sides to the story - and Howard W. French, who was moderating, assisted in answering this question based on his wealth of experience in Central America, Asia and Africa. Some ideas that we both generated during that talk are below.
Working conditions in China have caught a lot of headlines the last few weeks because of a spurt of suicides at Foxconn and a workers strike which has shut down Honda for several days. So, what are China's factories really like? I'll split my answer in to two overly simplified categories, the good and bad.
A) The Good
Manufacturing work, although tough, does allow people from the countryside to move off the land and find work opportunities in cities, suburbs and industrial centers that they wouldn't otherwise have the chance to visit. It allows many to earn a living and explore and have "an adventure" in some cases. This might sound naive to some of the most skeptic readers out there; but I've been to textile factories where a lot of the male workers play basketball after work and workers travel off the factory in the evening to meet friends at other factories and go out for dinner. I have met factory workers who make a decent wage and don't complain too much about working hours and who know that the work is hard but they won't be doing this forever - as they just want to save a bit and return back to the countryside and buy a home. These are some of the more positive stories I've heard in the last few years of visiting factories across China.
B) The Negative
While the "sweat-shop" idea is truly a rarity in China, there are many other factors of obtaining employment and maintaining employment that place significant psychological stress on workers. After years of visiting factories in some of China's most industrious locations I have come across some trends and common situations. Some of these situations are looked at below:
1) The Big Move
All migrant workers have to move. By the very nature of their employment, all migrant workers have to leave their homes, break ties with family and friends and move to a distant location; often without promise of employment. Many have to borrow money in order to leave in the first place; this is the first instance of incurring debt - which may happen often.
2) Agents
Once they arrive in manufacturing areas like Dongguan or Shenzhen they end up in "flop houses" which are full of migrants looking for work, they are not nice places. Some times weeks are spent in places like this while looking for employment at "job fairs" or through "private agents". Job fairs are difficult and exploitative in nature,and ofter jobs at very low salaries because they know that often jobs are in demand. The "private agents" on the other hand often charge potential migrant workers 3-6 months of their future salary to obtain jobs at highly sought after manufacturing companies. Assuming a migrant uses an agent, they may be borrowing money to cover living experience before employment and then have to pay back their "fee's" for up to six months after their first day of work. This is another cause of indebtedness.
3) Work Conditions
The work conditions are grueling, there is no doubt about it. But, with that being said they are humane; and in many cases conditions have improved ten-fold over what working conditions were like in the 1990s. While workers have to work for long hours performing the same tasks again and again, it is understandable that the pressure on the worker can mount and that they become isolated and feeling as though their work is meaningless and that their life is worthless - but this is the minority I feel. Workers safety is still an issue at many factories and many workers do get hurt and killed on the job. This continues to happen and is also a serious issue but I don't believe it is the cause of worker unrest, suicide and strikes.
4) Living Conditions
The living conditions for many migrant workers are not great, and much of the reasons for this are out of their control. For example, migrant workers are often forced to rent accommodation from the factory they work for at inflated rates, many workers are forced to eat at factory cafeteria at inflated rates and purchase snacks and food from company shops at inflated rates; thereby eroding spending power and savings. Yet another form of indebtedness. Social lives vary greatly, many find friends and engage in happy social lives, others fall through the cracks and live in isolation, often feeling estranged; it is these people who can often end up taking their own lives or getting themselves hurt on the job.
5) The Trap
A lot of you out there must just be thinking, why not just quit the job and move back home. It is just not that easy. Many migrant workers feel trapped in their employment for many reasons, the first is often family pressure. Many migrants borrow money and leave home with promises to deliver wealth to the family - but that is more often fantasy than fact. Also remember that for a migrant worker to obtain employment often they are already in debt to various people before their first day of work; and to complicate matters, often workers have their salaries held for at least three months by factories, so they are continuously owed three months salary. This is seen as an insurance policy for the company, forcing workers to return to work after the "Chinese New Year Holiday" where many workers return home and never come back to the factory. All of these pressures build up, and it's easy to see how a young 17, 18, 19 year old migrant, who is not very well educated, could become overwhelmed by negative feelings and hopelessness.
6) The Solution
To be honest, there is no solution. The problem is not always the job, but the system around finding and maintaining employment. There are too many middle-men and too many people out their making huge profits off of China's migrant classes. Basketball courts, swimming pools, better housing, better food, increase in salaries may not help the situation much. It is the infrastructure around finding employment and holding employment are improved.
Expect more suicides and more workers strikes. Sad but true. But that's just my two cents.
--
Ryan Pyle
Photographer
ryan@ryanpyle.com
Website: www.ryanpyle.com
Archive: http://archive.ryanpyle.com
_______________________________________
I few months back I was speaking at Columbia University and a professor sitting in on my talk asked me, "What are the labor conditions like in China at the moment?"
It was a tough question. There are, two sides to the story - and Howard W. French, who was moderating, assisted in answering this question based on his wealth of experience in Central America, Asia and Africa. Some ideas that we both generated during that talk are below.
Working conditions in China have caught a lot of headlines the last few weeks because of a spurt of suicides at Foxconn and a workers strike which has shut down Honda for several days. So, what are China's factories really like? I'll split my answer in to two overly simplified categories, the good and bad.
A) The Good
Manufacturing work, although tough, does allow people from the countryside to move off the land and find work opportunities in cities, suburbs and industrial centers that they wouldn't otherwise have the chance to visit. It allows many to earn a living and explore and have "an adventure" in some cases. This might sound naive to some of the most skeptic readers out there; but I've been to textile factories where a lot of the male workers play basketball after work and workers travel off the factory in the evening to meet friends at other factories and go out for dinner. I have met factory workers who make a decent wage and don't complain too much about working hours and who know that the work is hard but they won't be doing this forever - as they just want to save a bit and return back to the countryside and buy a home. These are some of the more positive stories I've heard in the last few years of visiting factories across China.
B) The Negative
While the "sweat-shop" idea is truly a rarity in China, there are many other factors of obtaining employment and maintaining employment that place significant psychological stress on workers. After years of visiting factories in some of China's most industrious locations I have come across some trends and common situations. Some of these situations are looked at below:
1) The Big Move
All migrant workers have to move. By the very nature of their employment, all migrant workers have to leave their homes, break ties with family and friends and move to a distant location; often without promise of employment. Many have to borrow money in order to leave in the first place; this is the first instance of incurring debt - which may happen often.
2) Agents
Once they arrive in manufacturing areas like Dongguan or Shenzhen they end up in "flop houses" which are full of migrants looking for work, they are not nice places. Some times weeks are spent in places like this while looking for employment at "job fairs" or through "private agents". Job fairs are difficult and exploitative in nature,and ofter jobs at very low salaries because they know that often jobs are in demand. The "private agents" on the other hand often charge potential migrant workers 3-6 months of their future salary to obtain jobs at highly sought after manufacturing companies. Assuming a migrant uses an agent, they may be borrowing money to cover living experience before employment and then have to pay back their "fee's" for up to six months after their first day of work. This is another cause of indebtedness.
3) Work Conditions
The work conditions are grueling, there is no doubt about it. But, with that being said they are humane; and in many cases conditions have improved ten-fold over what working conditions were like in the 1990s. While workers have to work for long hours performing the same tasks again and again, it is understandable that the pressure on the worker can mount and that they become isolated and feeling as though their work is meaningless and that their life is worthless - but this is the minority I feel. Workers safety is still an issue at many factories and many workers do get hurt and killed on the job. This continues to happen and is also a serious issue but I don't believe it is the cause of worker unrest, suicide and strikes.
4) Living Conditions
The living conditions for many migrant workers are not great, and much of the reasons for this are out of their control. For example, migrant workers are often forced to rent accommodation from the factory they work for at inflated rates, many workers are forced to eat at factory cafeteria at inflated rates and purchase snacks and food from company shops at inflated rates; thereby eroding spending power and savings. Yet another form of indebtedness. Social lives vary greatly, many find friends and engage in happy social lives, others fall through the cracks and live in isolation, often feeling estranged; it is these people who can often end up taking their own lives or getting themselves hurt on the job.
5) The Trap
A lot of you out there must just be thinking, why not just quit the job and move back home. It is just not that easy. Many migrant workers feel trapped in their employment for many reasons, the first is often family pressure. Many migrants borrow money and leave home with promises to deliver wealth to the family - but that is more often fantasy than fact. Also remember that for a migrant worker to obtain employment often they are already in debt to various people before their first day of work; and to complicate matters, often workers have their salaries held for at least three months by factories, so they are continuously owed three months salary. This is seen as an insurance policy for the company, forcing workers to return to work after the "Chinese New Year Holiday" where many workers return home and never come back to the factory. All of these pressures build up, and it's easy to see how a young 17, 18, 19 year old migrant, who is not very well educated, could become overwhelmed by negative feelings and hopelessness.
6) The Solution
To be honest, there is no solution. The problem is not always the job, but the system around finding and maintaining employment. There are too many middle-men and too many people out their making huge profits off of China's migrant classes. Basketball courts, swimming pools, better housing, better food, increase in salaries may not help the situation much. It is the infrastructure around finding employment and holding employment are improved.
Expect more suicides and more workers strikes. Sad but true. But that's just my two cents.
--
Ryan Pyle
Photographer
ryan@ryanpyle.com
Website: www.ryanpyle.com
Archive: http://archive.ryanpyle.com
_______________________________________
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