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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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Media sensationalism (sigh)
By Estee on 5/28/2010 1:53:19 PM , Rating: 2
Some facts for everyone, since this story doesn't detail the other side of the coin...

- This is occurring at Foxconn Long Hoa, a little city about 30 minutes away from Shenzhen. The whole town is dedicated to Foxconn (as well as Huawei)

- The Foxconn campus is more like a small city. ~350K people are on the complex, complete with dorms, shopping, banks, and entertainment.

- The estimated salaries does not include overtime or take into account the free dorm rooms or the incredibly cheap food/drinks/entertainment available to the employees.

- Typical "line workers" are countryside villagers who do not have education or much opportunities. They would usually go into indentured professions such as sales, restaurant, massaging, or even prostitution (which is rampant in China). While this production line labor may seem low in pay, it is much higher than those other noted options and also has the opportunity to move up (unlike the other jobs).

- Statistically speaking, the 11 deaths / 375K figure is still better than more than half the states in the USA (see http://www.usatoday.com/news/health/2007-11-28-dep... )

I'm not trying to defend Foxconn here, but I have worked with them for about 8 years now and have seen them grow and talked / mingled with the employees first hand. Even one of the admin girls (aka secretary) now has been promoted to be a full project manager and she is very happy. There are two sides to every story, and I think ya'll should know that there is a good side as well. And besides, work at Foxconn is completely voluntary so they are able to leave at anytime they wish. If you want to blame anyone there, it is the Chinese government which doesn't give the same opportunities for their population to make a good day's wages. Ironic for a socialistic society to turn to a capitalistic corporation (Foxconn), don't you think?




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