In response to one of the largest investigations ever conducted of a U.S. company’s foreign partners, Apple manufacturing partner Foxconn has agreed to hire tens of thousands of new workers, eliminate illegal overtime, improve safety condition and upgrade workers’ housing and other amenities, Reuters reported on Friday. After probing three Foxconn plants and interviewing over 35,000 workers, the Fair Labor Association reported that it found serious violations of Chinese labor laws, such as illegal and unpaid overtime, and extreme hours. Foxconn plans to reduce workers’ hours to 49 per week, which includes overtime, and it does not plan to raise salaries. The company will also hire additional workers and build more housing and canteens to combat overcrowding. While some of the company’s efforts have been praised, the changes have received mixed reactions from Foxconn’s employees. Read on for more. More →
According to Business Insider, a report from FBR analyst Craig Berger claims that Apple’s goal of producing 40-45 million iPads is “out of reach.” Apple’s current second-quarter production target is 6.2 million iPad units, but that may not be possible due to production issues with Hon Hai, Berger said. As a result, actual iPad production could drop to 5.2 million units during the third quarter. Similarly, Berger argues that Apple may face production issues from the March earthquake in Japan, particularly in relation to touchscreen displays. Berger’s report is on a par with a recent DigiTimes article that suggested Apple would have a hard time manufacturing enough iPhone 4 and iPad 2 units to meet demand due to material and labor shortages at Foxconn. More →
Taiwan’s minister of the Counsel of Labor Affairs (CLA) on Thursday announced her intentions to raise the nation’s basic wage for public workers by over 3%. CLA minister Jennifer Wang remarked that despite a 3.47% increase to Taiwan’s basic wage last year, the planned 3% pay hike for public workers should be increased further still. Wang argues that the country’s base pay was too low to begin with, so another 3% hike will not be sufficient for those earning a minimum wage. As of January 1st of this year, basic pay for public workers was increased from NT$17,280 to NT$17,880, or approximately $619 each month. The CLA minister’s comments came following Lawmaker Ho Tsai-feng’s note that the minimum wage should be raised by $2,330 each month, the average increase across all public workers at the currently slated 3% rate. This would bring Taiwan’s monthly minimum wage to NT$20,110, or $696. More →
It’s no wonder why Foxconn is considering moving some facilities outside Taiwan and China and into other countries like Brazil. Beyond the potential tax benefits for the manufacturer and its clients, China and Taiwan are finally beginning to address problems surrounding the working conditions its citizens have endured in recent history. Forced wage increases and other recent moves such as Taipei City’s decision on Tuesday to slash the maximum monthly working hours from 312 to 260 for some laborers threaten to spill over into other regions and industries. For Foxconn and parent company Hon Hai Precision Industry Co. Ltd. — which just revealed March revenue of NT$214.9 billion ($7.39 billion USD), up 41% over February — the financial impact of these moves on the bottom line could be massive. It will be interesting to see how Chinese President Hu Jintao receives Brazilian President Dilma Rousseff as they discuss shifting billions of dollars out of China and into Brazil.
French Journalist Jordan Pouille recently visited the Foxconn campus in Shenzhen and returned home with a series of photos and video that highlight the conditions and morale at the notorious plant. Foxconn, which manufactures gadgets for a variety of major electronics companies including Apple, HP, Nokia, Sony and Palm, has been scrutinized over the past year following a string of worker suicides and allegations of exploitative and abusive practices among management. Pouille details the scene at the Foxconn factory, and speaks to workers who describe the conditions as being similar to a labor camp.
At the production line, none of them could speak or even look at each other while trying to achieve the christmas production targets. They had to leave their mobile at the entry. However, their managers tried not to insult them, after all the bad publicity they got last spring when the 13 Foxconn suicides hit the headlines. A big improvement has been made after 30 glorious years of economic reforms: more workers are now allowed to sit down (depending on the good will of their managers) while working.
Hit the break for a video and visit the read link for a first-hand account of the conditions at Foxconn.