Foxconn move is now in full swing
By Wang Xiang |
July 2, 2010, Friday
|
Print Edition
Print Edition
FOXCONN, which agreed to double workers' wages in the wake of 10 employee suicides, is planning to move a major part of its production from Shenzhen City to Hebei Province to cut costs.
Company spokesman Tong Wenxin said the relocation will be completed at the end of this year.
He said the company expects a larger deficit at the second half of the year because of the move, China News Service reported yesterday.
Foxconn lost US$8.7 million in the first half of 2009, the most recent figure available.
The world's largest electronics contractor, Taiwan-based Foxconn set a strategy in 2007 to move production to north and central China where labor and other costs are relatively cheaper.
The company now has more than 800,000 employees working and living in its factories in the cities of Langfang, Taiyuan, Tianjin, Beijing, and Shenzhen.
Shenzhen alone accommodates half of these workers. Foxconn also has factories in India, Vietnam, Brazil and Mexico.
The company doubled wages for the lowest ranking workers, from 900 yuan (US$133) a month to over 2,000 yuan, in two big pay hikes after it came under fire for the spate of 10 suicides.
The young migrant workers allegedly jumped to their deaths this year because of the measly pay and huge work pressure.
Some Shenzhen employees accused the factory of treating them like nonpersons, according to previous reports.
The move to Hebei is in addition to plans it announced on Tuesday to build a mega-factory in Henan Province. That announcement sparked a competition between Henan cities to land Foxconn's investment and future tax payments.
Zhengzhou City has allocated 133 hectares for a hoped-for first phase of Foxconn construction and is launching a province-wide recruitment campaign to get the 300,000 employees the new plant would need.
Nanyang City's government countered that if Foxconn builds there it would subsidize employees up to 600 yuan a month if they work there more than six months.
Company spokesman Tong Wenxin said the relocation will be completed at the end of this year.
He said the company expects a larger deficit at the second half of the year because of the move, China News Service reported yesterday.
Foxconn lost US$8.7 million in the first half of 2009, the most recent figure available.
The world's largest electronics contractor, Taiwan-based Foxconn set a strategy in 2007 to move production to north and central China where labor and other costs are relatively cheaper.
The company now has more than 800,000 employees working and living in its factories in the cities of Langfang, Taiyuan, Tianjin, Beijing, and Shenzhen.
Shenzhen alone accommodates half of these workers. Foxconn also has factories in India, Vietnam, Brazil and Mexico.
The company doubled wages for the lowest ranking workers, from 900 yuan (US$133) a month to over 2,000 yuan, in two big pay hikes after it came under fire for the spate of 10 suicides.
The young migrant workers allegedly jumped to their deaths this year because of the measly pay and huge work pressure.
Some Shenzhen employees accused the factory of treating them like nonpersons, according to previous reports.
The move to Hebei is in addition to plans it announced on Tuesday to build a mega-factory in Henan Province. That announcement sparked a competition between Henan cities to land Foxconn's investment and future tax payments.
Zhengzhou City has allocated 133 hectares for a hoped-for first phase of Foxconn construction and is launching a province-wide recruitment campaign to get the 300,000 employees the new plant would need.
Nanyang City's government countered that if Foxconn builds there it would subsidize employees up to 600 yuan a month if they work there more than six months.
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