Foxconn, Other Asian Firms Consider Mexico Factories As China Risks Grow (reuters.com) 84
An anonymous reader quotes a report from Reuters: Taiwan-based electronics manufacturers Foxconn and Pegatron are among companies eyeing new factories in Mexico, people with direct knowledge of the matter said, as the U.S.-China trade war and coronavirus pandemic prompt firms to reexamine global supply chains. The plans could usher in billions of dollars in badly needed fresh investments over the next few years for Latin America's second-largest economy, which is primed for its worst recession since the 1930s Great Depression.
According to two of the sources, Foxconn has plans to use the factory to make Apple iPhones. However, one of the sources said, there had been no sign of Apple's direct involvement in the plan yet. Foxconn is likely to make a final decision on a new factory later this year, and work will commence after that, the two people said, adding there was no certainty the company would stick to the plan. Pegatron is also in early discussions with lenders about an additional facility in Mexico mainly to assemble chips and other electronic components, said the people, who declined to be identified as the talks are confidential. Pegatron declined to comment. Foxconn has five factories in Mexico mainly making televisions and servers. Its possible expansion would underscore a broader and gradual shift of global supply chains away from China amid a Sino-U.S. trade war and the coronavirus crisis.
According to two of the sources, Foxconn has plans to use the factory to make Apple iPhones. However, one of the sources said, there had been no sign of Apple's direct involvement in the plan yet. Foxconn is likely to make a final decision on a new factory later this year, and work will commence after that, the two people said, adding there was no certainty the company would stick to the plan. Pegatron is also in early discussions with lenders about an additional facility in Mexico mainly to assemble chips and other electronic components, said the people, who declined to be identified as the talks are confidential. Pegatron declined to comment. Foxconn has five factories in Mexico mainly making televisions and servers. Its possible expansion would underscore a broader and gradual shift of global supply chains away from China amid a Sino-U.S. trade war and the coronavirus crisis.
Soon they'll be using the wall... (Score:5, Funny)
Re:Soon they'll be using the wall... (Score:5, Insightful)
If Mexico had been building the wall it would have been done by now.....
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Re: Soon they'll be using the wall... (Score:3)
The wall doesn't mitigate shit, except the free roaming of wildlife.
Drugs and undocumented workers almost all come through border checkpoints or underground tunnels.
The wall only has support from idiots who don't know the first thing about security, Mexico, or trafficking.
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Re: Soon they'll be using the wall... (Score:2)
U.S. Border Patrol has repeatedly demonstrated that they are "idiots who don't know the first thing about security, Mexico, or trafficking."
Re:Soon they'll be using the wall... (Score:5, Funny)
i'd love the irony that trump had finally ended up creating jobs ... in mexico.
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Ah Grasshopper, the end result is not yet here. How long before the alleged president invites the Mexican president to the White House for a sleepover? On the M. president's way out, the alleged president will give him a warm goodbye: Seeing as how I caused those factories to be built in Mexico, please pay the cashier on your way out as token of your gratitude to me.
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China is encouraging intermarriage between Han and Uighur. While it is going to wipe out the Uighur as a separate race its not the same as putting them into gas chambers. When you exaggerate ,people stop paying attention even if the basic point is valid.
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And while we are on the topic of cultural genocide, I would really like to see the native Aztecs in Mexico. Oh? They have all been assimilated to Catholicsm? The Chinese could learn a few tricks on genocide from Mexico.
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And while we are on the topic of cultural genocide, I would really like to see the native Aztecs in Mexico. Oh? They have all been assimilated to Catholicsm? The Chinese could learn a few tricks on genocide from Mexico.
Oh, well, China gets a pass because... Conquistadors. Yeah, makes sense.
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They dont get a pass but a thread on China vs Mexico is not the appropriate forum if you really want to discuss cultural genocide. The irony is too rich.
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China is encouraging intermarriage between Han and Uighur. While it is going to wipe out the Uighur as a separate race its not the same as putting them into gas chambers. When you exaggerate ,people stop paying attention even if the basic point is valid.
And they say romance is dead! Two ethnic groups at such bitter odds somehow finding each other so irresistible that one will be bred out of existence. The one denied passports, mass incarcerated, etc, of course.
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What I love is we are in the middle of a fricking pandemic and there are those still arguing against the wall, have you ever seen how coyotes get people across the border?
Heh. Yes, actually: They disguised pickup trucks to look like they were part of a construction team building a section of the Trump wall, picked up the people illegally crossing the border, then joined the fleet of construction pickup trucks leaving the site after completing their work for the day.
Not only did you pick an example of how the building of the wall is being used as an exploit to get in, but you've also made the Democrats' case for using electronic surveillance at a fraction of the cost!
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Hey, that would fall under the military budget, right? I think you found Trump's badly-needed 100 billion to finish that wall!! Tweet him!!!!
Best aspect is, could mitigate drug lord influence (Score:5, Insightful)
One great aspect of manufacturing money pouring into Mexico, is that maybe with another large source of money besides the drug trade, it could help diminish the influence of the drug cartels [escholarship.org] in the Mexican government...
It's also inherently better to have stronger neighbors, and people worried about illegal immigration would have a lot less to worry about if there was no economic pressure to leave Mexico and go to the U.S... in fact if Mexico was dong really well, it could be the next Canada in terms of attracting Expats who liked a warmer climate than Canada offers.
Best way to reduce cartels is legalization (Score:5, Insightful)
As long as the worlds largest drug addict nation is next door there will be demand for drugs. Only way to avoid criminals running the business and killing people in drug wars is to legalize all drugs in the US. Will never happen as many of the black agencies in the US raise their funds via drug trafficking but blaming Mexico and its poverty for drug cartels is a strawman.
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As long as the worlds largest drug addict nation is next door there will be demand for drugs.
I totally agree there, I don't mean to say the money drug cartels collect would diminish. Only that manufacturing moving into Mexico in a big way would give some other industry some parity - also also job opportunities that were not working in the drug industry.
Re:Best way to reduce cartels is legalization (Score:5, Interesting)
Manufacturing in Mexico actually helps the drug cartels. before NAFTA the primary route for smuggling drugs into the US from Columbia was via the Caribbean. Once NAFTA got signed and car factories got setup in North Mexico the amount of truck traffic across the border exploded. It was no longer possible to check for drugs at the border so the best route for smuggling drugs in the US became the US-Mexico border and the Columbians became suppliers to the Mexican cartels.
So more manufacturing in Mexico helps the cartels in both smuggling more easily as well as having legitimate businesses to invest their drug profits into.
The only thing which will stop the cartels is legalization.
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Re: Best way to reduce cartels is legalization (Score:2)
Yes, there are definitely international corporations that are willing to get in business with the drug cartels. Drug money is as green as any.
https://www.theguardian.com/wo... [theguardian.com]
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Put that crack pipe away (Score:2)
Legal opium trade sure did nothing bad to Chinese in 19th century. And besides, the Mexican drug cartels are selling drugs to Mexicans and are increasingly engaging in all sorts of domestic illegal activities ranging from racket, kidnapping, and even pilfering oil pipelines. Mexico is a borderline failed state, always has been. The old traditional face-saving argument "We would be fine if gringos stopped buying our drugs" is a load of BS.
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You set up a strawman "We would be fine if gringos stopped buying our drugs". Thats exactly opposite of what I am saying.
The gringo is never going to stop buying drugs so let the Gringo companies run the drug trade as a regulated trade. No cartel is going to be able to compete with the likes of Coca Cola and Zuckerberg both experts at selling addictive products.
Criminals make lots of money from drug trade which lets them corrupt the govt and it leads to a failed state. If people are going to shoot it up any
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Legal opium trade sure did nothing bad to Chinese in 19th century.
Opium had been legal in the US up until the Prohibition. Yet somehow it worked just fine.
Heck, heroin was freely available from pharmacies in Germany up until mid 70-s with prescription. It was widely used as a drug of choice for maintenance for opium addicts.
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Coca cola gets its name from Cocaine. It started out as a cough syrup with the main active ingredient being coca leaf (and yes that included trace amounts of cocaine). US society did not fall apart because Coca cola was legal.
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Sure, if doctors could prescribe opiates nothing could go ever wrong. [wikipedia.org]
And that was semi-legal at best, and limited in scope. Actually allowing opiates without a prescription would be a disaster.
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And then there's also a corresponding increase in alcoholism: https://time.com/5763403/alcoh... [time.com] - so the opioid epidemic is simply a nothingburger.
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Apart from the fact it makes no sense what so ever. You have the whole of South America to choose from for the market and the production. The more China and Russia power up South America the more power they steal from the USA, it's ability to exploit and pillage South America stripped away. Mexico does nothing for that, makes no sense what so ever.
Continued investment and development of Brazil, not just to cut off the USA but to turn Brazil into a major competitor against the USA. It makes far more sense t
Re: Best aspect is, could mitigate drug lord influ (Score:2)
Mexico has one of the most educated populations in Latin America AND a strong existing supply infrastructure for electronics AND a little thing called NAFTA. Ya heard?
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The Mexican cartels will simply shake down the new factories and their workers and wind up with more loot than if the factories were never built. They won't take this lying down. Between them and the alleged administration in the U.S. asking for a cut, Mexico will be lucky to break even.
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Once they have more money, you can also sell them things they couldn't afford before.
Taiwan Risk (Score:5, Interesting)
I would call it that Taiwan risk is growing rather than China risk. China is currently dependent on Taiwan for chip manufacturing and other tech. So despite all the rhetoric Taiwan is safe. However Trump administration is forcing a decoupling of Taiwan and China through sanctions on Taiwanese companies doing business with China. Which means the costs to China of simply invading and taking over are going down. At some point the balance will tip and China will launch Operation Reunification. Taiwanese companies have seen the writing on the wall and are trying to build factories outside of Taiwan.
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Consider that /. is a world-wide site and that many authors - especially on an article about China - aren't native English speakers.
Yeah, I hear some people post here from the UK.
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Countries that are interdependent dont go to war unless one of them tries to exploit the dependency. In WW2, Japan would never have attacked USA if USA had not stopped selling oil and steel to Japan (Japan was even willing to ignore US Army pilots fighting on the Chinese side). Similarly while the CCP has been talking of invading Taiwan for decades until 10 years back they did not have amphibious capability and since then the cost of disrupting trade is too high. They do a lot of trade with Taiwan. The poin
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Chips are as crtical to China's rise as oil was to Japan's. USA had allies and a military. Yet when faced with a choice of giving up and rolling over due to lack of oil or taking the war to USA, Japan chose to roll the dice. China wants to be a tech power. if they cant have TSMC fab their chips , it gets mighty tempting to takeover Taiwan and force them to. And China's military can roll Taiwan any day. The only thing stopping them is they dont want war with USA. They sell too much stuff to the US.
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China is boosting domestic chip fabrication to account for this. Taiwanese fabs are losing a lot of highly skilled staff as China offers big money to bring them over to develop domestic capability. The goal is to be only one generation behind within the next few years so that chips made in China are highly competitive.
As for moving iPhone production to Mexico, China won't just ignore it. Maybe they will ban sales of foreign made iPhones for "security reasons" or something. Or maybe just ban Apple entirely,
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Apple already produces iPhones in Brazil because Brazil banned foreign made iPhones. India is doing the same hence the new iPhone factory in India. Apple will keep producing iPhones in China for the Chinese market. The Mexican factories are meant to supply the US market. With globalization taking a back step I see a future of Foxconn having factories in each trading block - one in NAFTA, one in SAARC, one in MERCASUR, one in EU and one in Greater China.
MMGA? (Score:2)
MTMA (Score:5, Funny)
Make Texas Mexico Again?
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No, we don't want Texas back. Nobody likes Texas.
California, and Arizona, though -- we'd be game for that.
Cheers!
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We cant give up California. We dont want to go back to importing MJ from Mehico. Arizona sure - you can take the land as long as we keep the water.
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No, we don't want Texas back. ...
California, and Arizona, though -- we'd be game for that.
Wait 'til my wife and I are moved out of CA and you can have it. B-)
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Wait a minute! (Score:4, Interesting)
Don't they have that nice big empty lot near Milwaukee?
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gigabucks...
As long as poor people don't get a dime, they're happy.
God, I hope Trump is a dumb asshole today. (Score:2)
I know he doesn't actually have authority to do anything, but he should get on TV and say some insane bullshit about banning iPhone if Foxconn doesn't move here. Just the chance that the FUD could send factories here is worth it.
Re:God, I hope Trump is a dumb asshole today. (Score:4, Interesting)
The people making those kinds of decisions are not so easily intimidated. The most they'll do is make some vague promises and token gestures and wait for the attention to fade. The reasons companies make stuff in Asia are economic, and political posturing doesn't change any of that.
In a world where everything is the same as it is now, except iPhones were made in the US, those iPhones would cost about $2000. That's because a skilled Chinese factory worker makes only about a hundred bucks a week, and it's not just the nimble-fingered country girls assembling the iPhone in Foxconn's sweatshops, it's the entire supply chain.
It wouldn't be such bad thing for consumer goods to be made in the US by highly paid American workers, but to cost a lot more. But a lot of people would be unhappy with that change.
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You act like iPhones won't cost $2k in 5 years if production were left right where it is.
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Assembly is a small part of the cost of a phone. It doesn't take very long at all. Even if you quadrupled the labor cost it would only slightly increase the overall cost. Kind of like how if you paid burger flippers a living wage, the price of a burger would only go up a few cents.
Hmm (Score:2)
If only Foxconn had a factory [wikipedia.org] and other still empty buildings [theverge.com] in, say, Wisconsin ... that are gathering dust and tax breaks.
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The 14th Amendment has an exception for slavery - convicts. Use convict labor. Start a tough on crimes movement wih 20 year minimums for Jaywalking and you have all the workers you need. If most of the population is imprisoned in for profit private prisons/plantations the unemployment rate goes down. And you also get rid of people who would have voted against you.
Yes, do it, Taiwan, do it. (Score:5, Insightful)
Inevitable (Score:1)
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You do know that the cost of Chinese workers has risen to 4 dollars and hour and the Chinese factories have automated the shit out of the factories to avoid getting outcompeted by Vietnam and India on cost. China doesnt compete only on cost anymore. China also has the world's cheapest power. Dont see Mexican factories being able to compete with China on cost as they have more expensive power, less automation experience, higher shipping costs (most of the components are made in Asia so moving end assembly cl
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China is definitely climbing the quality chain much like Japan did before. A lot of Americans don't realize this. However, China's form of government is probably going to put a ceiling on how far they can rise. Japan's mostly-wes
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A dictatorship is generally one person in power for life. China has a one party state capitalist system - private ownership but central planning. The closest system is the Fascist system (without the overt racism). It lends itself well to rapid industrialization in fact much better than Democracy does (look at India for an example of what happens when a developing nation tries to be a democracy). Once China catches up on the tech level with USA and Western Europe that when the challenge comes. When the path
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"Cracks about Alabama aside, the US is a first world country, and people who live here have first world expenses that make competing with places like China and Mexico impossible."
No its not. We simply automate. We automate better than anyone as it is. We automate, and then the jobs are few and can pay 1st-world wages anyway.
The real expense that makes manufacturing in the USA difficult is the income taxes. 22% of the average US-built product is income tax expenses from corporate, capital gains, employe
more movement needed (Score:3)
If world relations with China settle down, things just might go back to something close to normal. If that happens, any big moves to decouple with China will have been a massive waste of money, time and effort.
If things keep going the way they are, I'll give it a 75% chance that China simply invades and takes Taiwan by force. If that happens, the only way these companies survive is if they move a lot more than just a manufacturing line or two. They need to move corporate structures, full supply chains and maybe even headquarters to the west. If China invades, it will get VERY ugly. Taiwan can't win and there's no chance the west will risk a nuclear war to defend it. But it will be VERY expensive for China. There won't be much left of Taiwan's economy when it's over. Any company on the ground over there will be a ghost. No way in hell that anything like a semiconductor fab will survive. Not that China will care. They just want the land mass.
Very tough call for Taiwanese companies. It's a BIG gamble either way.
We Don't Seem To Ever Learn A Thing (Score:1)
Lesson for this year is that its dumber than a pile of rocks to make your supply chains come from foreign sources.
Build the damned things in Iowa, not Mexico.
And for people worried about the labor rate, what about automation? I thought robots were building everything. How can hordes of 1000's of Mexicans getting paid a dollar two ninety eight an hour beat a factory floor of 100's of machines putting phones together automatically, with just a few well-paid techs to keep the machines working?
Want to really
I've never understood why/how Foxconn could (Score:2)
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This is unpossible Walker, Vos, Fitzgerald & T (Score:2)
I warned people they were full of shiat.