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China iPhone plant workers to get 30 pct raise
Source: Agencies |
June 2, 2010, Wednesday
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Online Edition
Online Edition
PRODUCTION line workers at iPhone maker Foxconn's southern China manufacturing hub will get a 30 percent pay rise, after a string of deaths at the site focused attention on working conditions in a region experiencing growing labour unrest.
Taiwan's Hon Hai Precision Industry, owner of Foxconn, said on Wednesday that the cash component of wages would rise by 30 percent effective immediately, more than the 20 percent rise the company had talked about late last month.
It said the higher increase reflected rising prices in China, and it hoped to earn workers' respect and raise efficiency.
"(Foxconn) has to do this as a more aggressive measure to prevent the company's reputation from being hurt more. But it's unlikely the whole thing will calm down because of the raise," said Sean Chen, who manages T$16 billion ($500 million) for Cathay Securities Investment Trust in Taipei.
"The move will sure put increasing pressure on other manufacturers in southern China. Keep in mind, though, it's been China's policy to improve wages for its workers. It's just the Foxconn incident that might have accelerated that."
Hon Hai's shares fell as much as 2 percent in a broader market down 0.5 percent, while Foxconn shares shed 1.4 percent in Hong Kong.
A total of 10 workers have died at the company's base in southern China this year, all apparently suicides. The deaths have triggered investigations by Apple and other big clients, including Dell Inc.
Apple CEO Steve Jobs, in his first public comment on the events, said on Tuesday that the deaths were "troubling", but the factory "is not sweatshop".
"It's a difficult situation," Jobs said at the D8 annual gathering of top technology executives. "We're trying to understand right now, before we go in and say we know the solution."
Taiwan's Hon Hai Precision Industry, owner of Foxconn, said on Wednesday that the cash component of wages would rise by 30 percent effective immediately, more than the 20 percent rise the company had talked about late last month.
It said the higher increase reflected rising prices in China, and it hoped to earn workers' respect and raise efficiency.
"(Foxconn) has to do this as a more aggressive measure to prevent the company's reputation from being hurt more. But it's unlikely the whole thing will calm down because of the raise," said Sean Chen, who manages T$16 billion ($500 million) for Cathay Securities Investment Trust in Taipei.
"The move will sure put increasing pressure on other manufacturers in southern China. Keep in mind, though, it's been China's policy to improve wages for its workers. It's just the Foxconn incident that might have accelerated that."
Hon Hai's shares fell as much as 2 percent in a broader market down 0.5 percent, while Foxconn shares shed 1.4 percent in Hong Kong.
A total of 10 workers have died at the company's base in southern China this year, all apparently suicides. The deaths have triggered investigations by Apple and other big clients, including Dell Inc.
Apple CEO Steve Jobs, in his first public comment on the events, said on Tuesday that the deaths were "troubling", but the factory "is not sweatshop".
"It's a difficult situation," Jobs said at the D8 annual gathering of top technology executives. "We're trying to understand right now, before we go in and say we know the solution."
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