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Foxconn's factory in Foshan City, located in southern China's Guangdong province, is seen here in June. Foxconn has announced plans to build a new Northern China factory, amid financial losses.  (Source: AFP/Getty Images)
China's largest consumer electronics manufacturer is struggling under international scrutiny

A local notice posted on the government bulletin board in Henan city of Hebei points to Foxconn moving ahead with plans to build another massive city-sized manufacturing town nearby. 

The creation of the new Northern plant marks Foxconn's latest bid to stem the tide of suicides and disgruntled employees.  Foxconn has tried a variety of schemes to stem the suicides -- buddhist monks, letters asking employees not to kill themselves, and most recently safety nets.

However, the moves that may be having the biggest effect are also the most expensive.  Foxconn raised wages for its employees and additionally may be relocating some production to cheaper Vietnam or building replacing employees with robots at a Taiwanese facility.

It's also begrudgingly going ahead with plans to build the Henan plant in Northern China, despite the fact that it will have to pay the employees higher wages.  By moving its production closer to its migrant worker's homes it believes they will be happier.  Many employees report being distraught at leaving their families and traveling long distances to reach the current plants.

Employees at the new plant will be paid a basic wage of $176 a month during their three-month probation period, with total income up to $340 a month (with overtime).  After passing examinations, the monthly wage would rise to $300 a month, with total income of up to $440 a month.  Overtime is limited to 3 days a week, and one day a week will be guaranteed off.  

These higher wages are having an impact on the bottom line of Foxconn's parent company Hon Hai Precision Ltd.  The Taiwanese firm released a document [PDF] stating that due to these and other factors, its first half losses for this year would increase from the first half loss it posted last year.

Foxconn's dilemma is that it needs cheap labor, but moving to new facilities in Vietnam or Taiwan could incur many additional costs.  Building new plants in China, where Foxconn is already well established is respectively cheaper.  Plus China has an immense worker pool with an estimated 150 million migrant workers.  Many of these workers are at a prime age for manual labor, with two-thirds of them between the ages of 16 and 30.

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By Shatbot on 6/30/2010 11:12:05 AM , Rating: 2
12 Suicide payouts made Foxcon post a loss. Those margins are razor thin to say the least!

RE: Title?
By Earthmonger on 6/30/10, Rating: 0
RE: Title?
By Strunf on 6/30/2010 12:37:40 PM , Rating: 2
"People went into these jobs willingly."
Depends, I know many people that take crappy jobs just cause at the end of the month they make enough to sustain their family... and I live in a country that doesn't let people die of hunger, imagine what would be in a country where no one gives a crap about you and your family. If you think today we can't force people to work you don't have any idea of what the reality is to a great deal of the population around the world.

RE: Title?
By Penti on 6/30/2010 12:51:31 PM , Rating: 2
Your retarded way more then any unstable Chinese people. Foxconn is an employer with 450 000 employees in China. Nobody moves out from the states when some bat crazy guy comes in and starts shooting his former or current coworkers. And that might happen at a mid-sized employer or part of a smaller concern then Hon Hai/Foxconn. Assembly line workers aren't any high-payed workers that can just quite they live on the damn factory parks. Neither is it a very flexible workplace and neither are their rights in the highest regard. But that's no reason to invest where things are even worse and people get even less payed and will have a tougher time to live on the wages like in Vietnam. You will have suicides there too if you build factories with hundreds of thousands of workers.

Yes they should make their jobs more meaningful and less monotone or physically detrimental. But companies like Foxconn are usually better at building high-tech factories in China then western companies from say Japan or Sweden. Where Sweden firms have even stated that they see humans as replacements for robots and the kind of automation that where done here in the early-mid 90's. Taiwanese have been in China since the late 80's. They have never really seen it as a low-tech place to build high-tech goods with too many manual elements. The bulk of their production capability is often there, their most advanced plants, that's not the case for many western firms ventures there.

Depressed and suicidal people are everywhere, if they become "unstable" I'd say they would have pretty hard time changing there situation move home 500 miles to your dirt poor family might not be an option. It's not precedent any way. You have payouts for suicides in your life insurances in the states, which you might get from your employer any way. No real diff.

RE: Title?
By wallijonn on 6/30/2010 7:04:16 PM , Rating: 3
I come from Arizona. A "Right To Work" state. People went into these jobs willingly. They need to honor their jobs or be cast off.

All "Right to Work" means is that one has the choice not to join a union, that a union can't make you pay dues, nor that to get a job you'll have to join a union.

You think Foxconn has a union? How many unions in China? Do you think American unions would make you work 140 hours a week, or have to work 6 or 7 days a week?

It's been awhile since the adage, "If you don't come in on Sunday don't bother coming in on Monday" applied to Americans. You can thank the unions for that.

RE: Title?
By chick0n on 6/30/10, Rating: 0
"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA

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