Back to Mobile View

Skip to Content

Brazil's iPad production deal is 'in doubt'

Tech product manufacturer Foxconn has been in talks with Brazil to open a factory in that country for some time now, but apparently talks have begun to break down. Reuters now says the proposed US$12 billion deal is "in doubt" because Brazil lacks skilled labor and isn't meeting Foxconn's expectations for tax breaks.

Foxconn operates factories in several countries, with its most (in)famous operations in Shenzhen, China, where the manufacturer builds products for Apple and most other major tech companies. The proposed factory in Brazil likely would have supplemented iPad and iPhone-building operations in Foxconn's other factories, but the future of the deal is in trouble.

Production was originally supposed to begin at the Brazilian factory in July, was then pushed back to November, and now appears to be postponed indefinitely. For its part, Brazil says Foxconn's demands with regards to tax breaks and other "special treatment" are "crazy," but Brazil's high taxes, poor infrastructure, and lack of skilled workers is likely making Foxconn think twice about initiating major operations in South America.

It's still possible the deal may be salvaged, but government officials do not appear to be hopeful. One official confessed to Reuters that Brazil may "end up starting with something smaller" than the originally proposed deal.

© 2014 AOL Inc. All Rights Reserved.