Foxconn, the company that produces the Apple iPhone and iPad, as well as other electronic products, could be moving its plants out of China. In what appears to be a twofold problem, higher wages for Chinese workers and suicides at its plant in Shenzhen, the company may idle some 800,000 workers if it closes the plant. In addition, the company indicates that the price difference of producing electronics in China vs. Taiwan shrank when the company offered wage increases of 30% or more to the Chinese plant workers.
A recent article also states:
Foxconn’s facilities in Taiwan tend to be highly automated, whereas on the mainland they are much more labour intensive.
This intensive labour model, with long working hours and rigid systems, is one of the reasons given for worker unhappiness in southern China.
Taiwan is also trying to woo companies back. Last month it cut business income tax from 25 per cent to 17 per cent, and it is planning to set up several free trade zones for tariff-free imports.
The fallout from the Foxconn crisis continues to mount. There are fears of a domino effect causing serious production disruption in Shenzhen, one of the most heavily industrialised cities in China.
If Foxconn does move its operations back to Taiwan and closes its plant in China, this could cause a disruption in the supply chain. Apple could be facing a short supply of its popular iPhones and iPads down the road. Exactly when this could happen is unknown.
Comments welcome.
I’d sure hate to see a shortage of these gadgets available to the screaming masses who must have them. What’s a few deaths, support of a hell like regime, and the sane business decisions of a company compared to the shiny new gadget supply?
/sarc off
The company now suspects that these may not of been suicides instead were deliberate so that their families would receive full compensation by the company for life.
So Foxconn have worked the Chinese so hard they’ve been jumping out of windows, and now 800,000 of them are going to be dumped out of their jobs?!
It sounds like the financials will make this a straightforward decision for Foxconn, though. They’re going to need a lot more nets on the sides of tall buildings if Foxconn do carry out this retreat to Taiwan.
Strange how Foxconn didn’t build an automated factory in China from the get-go rather than employ loads of staff in soul-destroying jobs. If they had, they would’ve employed less, no doubt, but probably in better, more fulfilling jobs. And maybe some of those suicide victims would still be alive today.
Capitalism – it’s really great sometimes, and sometimes it’s awful.