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["I promise, I will never die."] --retracted by Foxconn  (Source: Paramount Pictures)
Turns to employee relocation, pay raises after yet another death

Taiwan's Hon Hai Precision Industry's Chinese Foxconn unit has been having some problems at its Shenzhen plant lately.  A string of suicides has compelled Apple, Dell, and HP to launch a string into the supplier.  Foxconn previously responded by playing Buddhist music, offering employee counseling, and most requiring employees sign a letter promising not to kill themselves.

Apparently that's not working out so well.  On late Thursday, an employee slit his wrists, and according to the 
AFP has since become the eleventh to die this year.

After receiving news of the latest attempt Sony, Nintendo, and Nokia joined a pending probe into the company's business that currently included Apple, HP, and Dell.  In response to criticism about the letter, Foxconn CEO Terry Gou retracted it, saying it was inappropriate.

Guo is also trying yet another tactic in hopes of convincing its employees not to jump off high buildings -- giving them a pay raise.  Foxconn does give occasional raises, and claims that it has been planning to do so for some time, but never got around to it.  Currently entry level workers are paid 900 yuan (about $131.80) per month and also have the chance to earn overtime or bonuses.

According to Vincent Chen, an analyst at Yuanta Securities in Taipei, says that Foxconn typically bumps wages by 20 percent to meet holiday demand for consumer electronics.  However, he says that a pay raise of 50 percent is not outside the realm of possibility.

The pay raises will reportedly raise Hon Hai's operating costs by T$2.7B ($84M USD) and cut the company's profits by 10 to 12 percent, according to analysts at Citi.  Other analysts disagreed, though.  Chen comments, "I don't think this will impact Hon Hai's profitability...Hon Hai has raised salaries by up to 50 percent in the past, and it's still doing well."

It is believed that at least some of the suicides were financially motivated.  According to various employee accounts families of suicide victims with the company are typically paid between 8.5 and 10 years of pay.  Faced with scant salaries, some depressed employees reportedly think they are doing their families a favor by killing themselves.

Foxconn is also planning a mass relocation of about one fifth of its 400,000 employee Shenzhen workforce in Southern China to a plant in Western China.  Workers often migrate to get jobs at Foxconn's plants.  By moving the workers closer to home, Foxconn believes it can decrease their discontent.

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RE: Suicide rate below national average
By The0ne on 5/28/2010 1:15:38 PM , Rating: 3
While I don't like any one person dying due to stupid reasons I do agree with you that most of these bigger factories are not that bad compared to sweatshops as most Americans/foreigners perceive them to be. However,

1. Hours are long and require when asked.

2. Pay rates are low. To give you an example, my EE colleagues at one of our medium size CM (contract manufacturer) makes about 3000-4000 RMB. The Program Manager makes about 4000 RMB. Production supervisors make 1000 RMB. Laborers make less than that. Now factor in the conversion of 7 RMB = $1

3. People here still have a misconception of the cost of living in China, especially in big cities such as Shenzen, Hong Kong, Beijing, etc. Most prices are at the same level as what we would pay here, cheaply, and brand names are much higher. This is for "normal" stuff we eat/do/use here in US...not your $1.50 Costco hotdog and drink.

4. Everyone is easily replaceable so you either do as they say or you're gone. Simple as that. Applies to all levels.

5. If you think pay in factories are low, you don't want to know about pay in regular shops.

Then you have your sweatshops where I think everyone here knows about. Hell, even the 5 star Sheridan we usually stay in Xiamen has its own sweatshop housing. The workers barely make 1000 RMB. They are provided free housing but many are packed into one room >.> I fcking hate this btw.

The problem is there is absolutely no one to do anything about this, less be reminded of the problem. Indeed, many are selfish because of the capitalistic gains offered. One of the wonders (good and bad) of a growing industrialized nation. Don't even mention the government to me, not when I see police officers harassing minor issues such as parking tickets while a disfigured child is right there begging and starving for food. The child, obviously, is part of a ring. I've been warned many times by my colleagues to NOT do anything or else the next cab I take I will end up somewhere :o

By Jalek on 5/29/2010 7:22:22 PM , Rating: 2
Sweatshop production was common in America well into the 20th century. Every industrialized nation has gone through those phases, when they can afford to idle part of their workforce through limitations, they can pass these sorts of laws.

"do as they say or you're gone"
That's a growing trend in America these days...

"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer

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