Foreign-invested companies in the Pearl River Delta are facing a rising labor cost following the Foxconn scandal with some even planning to quit the area, the National Business Daily reported Wednesday.
Many companies have experienced employees protesting wages and have been forced to increase pay. "Foxconn raised salaries, and we had no choice but to follow," said Luo Huaijia, vice director-general of Taiwan Electrical and Electronic Manufacturers' Association.
Companies who refused to raise salaries have started looking at alternative business operations, with some planning to move manufacturing to inland cities where cheap-labor is available.
Merry Electronic, a Taiwanese-invested acoustics manufacturing company, has just ended its employee led protest on work shift arrangements, costing the business a ten percent less in production. But a company representative said a wage-raise has yet to be decided in consideration of their company operation cost.
A recent survey conducted by the Federation of Hong Kong Industries (FHKI) showed that among 80,000 Hong Kong-invested companies, 37.3 percent of them plan to move from the Pearl River Delta, and 63 percent are thinking of moving away from Guangdong province.
Any removal plan may only suit well-run companies, and weaker ones may be forced to shut down their business due to the lack of capital, a director of FHKI noted.