Foxconn iPad factory in Brazil may not open

Foxconn is again in the news, this time in Brazil, as its $12 billion factory deal reportedly may not go through due to demands of tax breaks and special treatment.

According to Reuters, Apple's plan to produce iPads in Brazil is in trouble. Brazilian President Dilma Rousseff announced Foxconn's plans to build the plant in April, and, "Senior officials hailed the deal as a sign of growing economic ties with Asia, and proof that Brazil was moving up the value-added manufacturing chain as its economy grows," said Reuters' Brian Winter.

Problems have now arisen as Brazil lacks skilled laborers and Foxconn's negotiations for increased tax incentives have brought talks to a standstill, according to the article.

Other computer manufacturers have echoed Foxconn's interest in Brazil as a manufacturing home for their consumer electronics, especially tablets. Brazil is also considered a promising consumer market thanks to the popularity of the Internet there, but taxes make imported goods expensive, Winter wrote, saying a 16GB iPad 2 would currently be about $900 in Brazil, almost double what it would cost in the U.S.

As for Foxconn, the deal may still get done. One suggested possibility is "for Foxconn or a Brazilian partner to simply assemble foreign-made parts" rather than manufacturing them in Brazil, which could reduce the strain on local resources while still opening the door for Foxconn and other technology manufacturers to produce electronics there.