The Hobbit will be filmed in New Zealand.
WorstPreviews quotes New Zealand Prime Minister John Key:
“An agreement has been reached between the New Zealand government and Warner Bros that will enable the two ‘Hobbit’ movies to be directed by Sir Peter Jackson to be made in New Zealand,” he said during a press conference. “We will be moving to ensure that New Zealand law in this area is settled to give film producers like Warner Bros the confidence they need to produce their movies in New Zealand.”I bet those Union reps are feeling like crap now that their little gamble to get “fair” treatment of their membership.
Peter Jackson responded fairly and bluntly that they were out of line making these demands and illustrated how his production went above and beyond the standards that they were holding the film hostage for, and decided to call their bluff.
The threat to take the production elsewhere widened some eyes. The rabble rose up and toppled their representation pleading for PJ to keep the production on their humble shores.
Which is exactly what Peter Jackson and Weta wanted in the first place.