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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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sup with this
By bhougha10 on 6/30/2010 12:38:28 PM , Rating: 1
I wonder if the people of the West will every stand up for thier kids future and stop buying from these slave labor countries?




RE: sup with this
By muhahaaha on 6/30/2010 1:32:59 PM , Rating: 1
It all comes down to the almighty dollar.

Some 10 year old in China is toiling 140 hours a week on assembling iPads for pennies?

Typical person: "So what, gimme gimme my shiny toy."

I realize a lot of other companies exploit these low income people, but Apple is the worst offender.

And then they have the arrogance to outright lie about the facts.

And they have Wall-street in their pocket with free kickbacks and a$$ sucking the media.

If I wasn't a stable person, I'd probably be ready to head down to Cupertino with my new Wicked Laser 1 watt toy and burn Steve's friggin eyes out.


RE: sup with this
By jimhsu on 6/30/2010 3:02:21 PM , Rating: 2
Sorry, I fail to understand this argument.

You see, if you choose to refuse to buy the "shiny new toy" from the manufacturer with "slave labor" - that's a lose-lose situation. In fact you're the least hurt by your own decision - the 10 year old toiling for pennies now suddenly faces layoff to support his aging mother and disabled father. Unemployment benefits? You wish. The manufacturer loses money from consumers like you, and thus has to relocate to even poorer countries (Vietnam, etc) to preserve their bottom line. Apple gets replaced by some other competitor with even less of a conscience - because conscience results in monetary losses for shareholders.

If you don't want to "buy from China", start your own company and market your own "China-free" products. Judging from this forum, you might do quite well -- or maybe not. Otherwise, all you're doing is putting 10 year olds out of jobs with your decision.



RE: sup with this
By wallijonn on 6/30/2010 6:55:21 PM , Rating: 2
quote:
all you're doing is putting 10 year olds out of jobs with your decision.


That's why we have child labour laws.


RE: sup with this
By John Sawyer on 7/1/2010 6:40:30 AM , Rating: 2
How exactly is Apple worse than other companies who use the same manufacturing facilities?


RE: sup with this
By GuinnessKMF on 6/30/2010 2:34:08 PM , Rating: 2
That's actually more of the problem, people are only concerned about their kid's futures, not humanity's kid's futures.


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