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Before Taiwanese manufacturing giant Foxconn pledged to spend $10 billion and create 13,000 jobs in Wisconsin, the company made a similar promise in Brazil.
At a news conference in Brazil, Foxconn officials unveiled plans to invest billions of dollars and build one of the world’s biggest manufacturing hubs in the state of São Paulo. The government had high expectations that the project would yield 100,000 jobs.
Six years later, Brazil is still waiting for most of those jobs to materialize.
“The area where Foxconn said it would build a plant is totally abandoned,” said Guilherme Gazzola, the mayor of Itu, one of the cities that hoped to benefit from the project. “They haven’t even expressed an interest in meeting us.”
Foxconn’s experience in Brazil and other parts of the world illustrates how difficult it has been for it to replicate its enormously successful Chinese manufacturing model elsewhere.
In China, Foxconn has built vast factories backed by large government subsidies. Its operations — assembling iPhones for Apple, Kindles for Amazon and PlayStations for Sony — employ legions of young assembly-line workers who often toil 60 hours a week for about $2.50 an hour. Labor protests in China are rare or quashed swiftly.
But the model does not translate easily to other countries, where Foxconn must navigate different social, political and labor conditions.
In Brazil, Foxconn’s plans unraveled quickly. The administration that had wooed the company was soon swept from power amid corruption allegations and an impeachment vote. Some of the tax breaks that had been promised were reduced or abandoned, as economic growth and consumer spending slumped. Read the full story here.