The UKs Register is quoting an ON.CC report (in Chinese, Google translation here) that Foxconn, which has seen a rash of suicides at its Shenzhen plant recently, will close down its entire operation in Mainland China. The Irish Times, however, is reporting that, Taiwanese electronics maker Foxconn says it is considering moving some of its production back to the self-ruled island where it has its headquarters.
So it is unclear what exactly the company is thinking right now regarding its future in China. Foxconn has about 800,000 employees throughout Mainland China, and has said that the labor-intensive approach that its taken in China is probably not sustainable long term.
Foxconn of course most famously produces the iPhone for Apple (which has reportedly ordered 24 million iPhone 4s for 2010 from Foxconn, and Jobs at D8: Foxconn is not a sweatshop), but the manufacturer also supplies products for numerous other multinationals. The Register report says that parent company Hon Hai Group will move the Mainland operations to Vietnam, Taiwan and India.
The suicides are of course tragic and still the main story. However, if Foxconn were to move all or a significant portion at least of its operations out of Mainland China, this could have far reaching implications not only to tech hardware prices worldwide, but also could have a (probably small) negative impact on Chinas economy (even in China, 800,000 jobs are still kind of a lot), and perhaps even a bigger impact might be on the general bad taste the entire incident has left on the country, especially around labor relations and conditions on the Mainland.
http://thenextweb.com/asia/2010/06/11/foxconn-to-reportedly-shut-down-mainland-china-operations/
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Go media. They make a huge deal about Foxconn's below average suicide rate (about half of the rate of the general population in China), they are forced to increase wages 66%, and so they decide they'd rather just sack the 800,000 people and move somewhere else. One guess as to how this will affect the suicide rate of those people.
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Weve heard all kinds of stories surrounding Foxconn and their less than desirable working conditions however, yesterday during Foxconns annual shareholder meeting, it was revealed that the company will stop compensating families of deceased employees. According to Foxconn CEO Terry Gou, the recent bouts of suicide can be strongly linked to the companys death benefits (a la victim compensation).
now Im going to jump off Foxconn, really leaving now, but you dont have to be sad, because Foxconn will pay a bit of money, this is all your son can repay you now.
Sadly (yet to be expected), the companys currently looking to relocate some manufacturing work, due to a lower earnings forecast contributed to by the increase of daily wages (basic salary rising from ¥900 ($132) to ¥1,200 ($176)). Oh, and due to what youve just read, Foxconns looking to set up a fully automated factory in either Taiwan or Vietnam yeah, well let you dwell over that.
http://t3chh3lp.com/blog/foxconn-scraps-victim-compensation-plan-wants-to-set-up-an-a.html
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I guess they think the best way to eliminate the suicide rate is to not have employees.
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TAIPEI, Taiwan (AP) -- Foxconn Technology Group, shaken by a spate of worker suicides at its mammoth industrial compound in southern China, said Thursday it could move some of its production lines back to Taiwan if the island offers attractive enough incentives, including cheaper costs for hiring foreign laborers.
Foxconn has come in for intensive criticism following 10 suicides this year at the factory complex in the Chinese city of Shenzhen, where it makes iPhones, iPads and other brand-name electronics for global corporations including Apple Inc. and Hewlett-Packard Co. Labor activists have linked the suicides to unduly harsh conditions at the plant, where more than 300,000 people are employed.
Responding to criticisms, Group Chairman Terry Gou told a shareholders meeting this week that Foxconn would move some factories to Taiwan if authorities offered attractive labor and other terms at the free trade zones they plan to set up.
Gou said Foxconn has built dormitories and recreational facilities at its China plants, forcing it to take over social service functions that ought to be reserved for local governments. He told shareholders that its existing China factory model may not be sustainable.
The new facilities in Taiwan would likely produce electronics components that require more precision work and have better profit margins, an official of Hon Hai Precision Industry Co., Foxconn's parent firm, told The Associated Press Thursday.
"We set up production lines in China in the past because of the huge labor cost differences between the two places," said the official, who requested anonymity because he was not authorized to speak to the press.
"If the labor costs are narrowed, we certainly would prefer Taiwan," he said. Foxconn already operates a fully automated factory on the island to produce precision components with robotic arms, the official said.
Labor activists accuse Foxconn of having a rigid management style, an excessively fast assembly line and forced overwork. The company denies the allegations, but has recently announced two raises, more than doubling the basic worker pay to 2,000 yuan ($293) at its southern China compound.
Foreign companies that rely on China as a source of cheap labor are finding it harder to attract and keep workers, who are demanding better pay and working conditions.
For its part Taiwan is now making intensive efforts to increase its attractiveness to foreign investors, and to lure back companies like Foxconn, which have left the island in droves for the mainland.
Last month it cut business income tax from 25 percent to 17 percent. The government is also planning to set up several free trade zones for tariff-free imports.
Businesses have pressed the government to lower the basic wage for foreign laborers, now at nearly 18,000 New Taiwan dollars ($550) a month. Economic Ministry official Huang Hsien-lin said authorities are studying ways to cut production costs at the free trade zones, but declined to elaborate.
http://finance.yahoo.com/news/Foxconn-considering-Taiwan-apf-1465802116.html?x=0&.v=1
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It does suck that they want Taiwan to lower the minimum wage for foreign workers though.
So it is unclear what exactly the company is thinking right now regarding its future in China. Foxconn has about 800,000 employees throughout Mainland China, and has said that the labor-intensive approach that its taken in China is probably not sustainable long term.
Foxconn of course most famously produces the iPhone for Apple (which has reportedly ordered 24 million iPhone 4s for 2010 from Foxconn, and Jobs at D8: Foxconn is not a sweatshop), but the manufacturer also supplies products for numerous other multinationals. The Register report says that parent company Hon Hai Group will move the Mainland operations to Vietnam, Taiwan and India.
The suicides are of course tragic and still the main story. However, if Foxconn were to move all or a significant portion at least of its operations out of Mainland China, this could have far reaching implications not only to tech hardware prices worldwide, but also could have a (probably small) negative impact on Chinas economy (even in China, 800,000 jobs are still kind of a lot), and perhaps even a bigger impact might be on the general bad taste the entire incident has left on the country, especially around labor relations and conditions on the Mainland.
http://thenextweb.com/asia/2010/06/11/foxconn-to-reportedly-shut-down-mainland-china-operations/
-----
Go media. They make a huge deal about Foxconn's below average suicide rate (about half of the rate of the general population in China), they are forced to increase wages 66%, and so they decide they'd rather just sack the 800,000 people and move somewhere else. One guess as to how this will affect the suicide rate of those people.
-----
Weve heard all kinds of stories surrounding Foxconn and their less than desirable working conditions however, yesterday during Foxconns annual shareholder meeting, it was revealed that the company will stop compensating families of deceased employees. According to Foxconn CEO Terry Gou, the recent bouts of suicide can be strongly linked to the companys death benefits (a la victim compensation).
now Im going to jump off Foxconn, really leaving now, but you dont have to be sad, because Foxconn will pay a bit of money, this is all your son can repay you now.
Sadly (yet to be expected), the companys currently looking to relocate some manufacturing work, due to a lower earnings forecast contributed to by the increase of daily wages (basic salary rising from ¥900 ($132) to ¥1,200 ($176)). Oh, and due to what youve just read, Foxconns looking to set up a fully automated factory in either Taiwan or Vietnam yeah, well let you dwell over that.
http://t3chh3lp.com/blog/foxconn-scraps-victim-compensation-plan-wants-to-set-up-an-a.html
-----
I guess they think the best way to eliminate the suicide rate is to not have employees.
-----
TAIPEI, Taiwan (AP) -- Foxconn Technology Group, shaken by a spate of worker suicides at its mammoth industrial compound in southern China, said Thursday it could move some of its production lines back to Taiwan if the island offers attractive enough incentives, including cheaper costs for hiring foreign laborers.
Foxconn has come in for intensive criticism following 10 suicides this year at the factory complex in the Chinese city of Shenzhen, where it makes iPhones, iPads and other brand-name electronics for global corporations including Apple Inc. and Hewlett-Packard Co. Labor activists have linked the suicides to unduly harsh conditions at the plant, where more than 300,000 people are employed.
Responding to criticisms, Group Chairman Terry Gou told a shareholders meeting this week that Foxconn would move some factories to Taiwan if authorities offered attractive labor and other terms at the free trade zones they plan to set up.
Gou said Foxconn has built dormitories and recreational facilities at its China plants, forcing it to take over social service functions that ought to be reserved for local governments. He told shareholders that its existing China factory model may not be sustainable.
The new facilities in Taiwan would likely produce electronics components that require more precision work and have better profit margins, an official of Hon Hai Precision Industry Co., Foxconn's parent firm, told The Associated Press Thursday.
"We set up production lines in China in the past because of the huge labor cost differences between the two places," said the official, who requested anonymity because he was not authorized to speak to the press.
"If the labor costs are narrowed, we certainly would prefer Taiwan," he said. Foxconn already operates a fully automated factory on the island to produce precision components with robotic arms, the official said.
Labor activists accuse Foxconn of having a rigid management style, an excessively fast assembly line and forced overwork. The company denies the allegations, but has recently announced two raises, more than doubling the basic worker pay to 2,000 yuan ($293) at its southern China compound.
Foreign companies that rely on China as a source of cheap labor are finding it harder to attract and keep workers, who are demanding better pay and working conditions.
For its part Taiwan is now making intensive efforts to increase its attractiveness to foreign investors, and to lure back companies like Foxconn, which have left the island in droves for the mainland.
Last month it cut business income tax from 25 percent to 17 percent. The government is also planning to set up several free trade zones for tariff-free imports.
Businesses have pressed the government to lower the basic wage for foreign laborers, now at nearly 18,000 New Taiwan dollars ($550) a month. Economic Ministry official Huang Hsien-lin said authorities are studying ways to cut production costs at the free trade zones, but declined to elaborate.
http://finance.yahoo.com/news/Foxconn-considering-Taiwan-apf-1465802116.html?x=0&.v=1
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It does suck that they want Taiwan to lower the minimum wage for foreign workers though.