Fri, July 23, 2010
China > Mainland > Foxconn suicide cluster

Foxconn threatens to review investment in Taiwan

2010-07-23 01:36:35 GMT2010-07-23 09:36:35 (Beijing Time)  China Daily

TAIPEI - The head of the Taiwan IT giant Foxconn has hit out at critics who claim the firm mistreats mainland workers and threatened to review his company's investment plans on the island.

Terry Gou, chairman of the group, which is a major sub-contractor for Apple and other electronic giants, was responding to criticism following a series of suicides at the company's plants in the southern city of Shenzhen.

"I don't know why our image has been smeared to this extent," he was quoted by Huang Chiu-lien, chief financial officer of the group, as saying during a briefing on Wednesday night.

"He said he was even wondering if there was still room for us in Taiwan.... We'll review our local investment plans, though the plans as a whole have yet to be finalized," Huang said.

The comments come after protests by Taiwan academics, who have claimed that Foxconn ill-treats workers in mainland cities.

"Some local academics even protested outside the Hon Hai headquarters claiming that Hon Hai is the shame of Taiwan. Gou said he felt agonized upon seeing this," Huang said.

Huang also said Foxconn plans to charge clients more to help cover wage increases at its manufacturing compound on the mainland.

The extent of price hikes will differ according to products, she said.

Foxconn makes iPhones, iPads and other electronic for corporations that include Apple Inc and Hewlett-Packard Co.

On Tuesday, Apple announced its April-June net income surged 78 percent to $3.25 billion on revenue of $15.7 billion after selling almost as many of its new iPad tablets as Mac computers.

It is unclear whether the increase in Foxconn's charges will result in higher prices for electronic goods.

However, fierce competition among electronic companies is likely to keep retail prices down. In the case of Apple, it is selling so many iPads and iPhones it can probably absorb higher costs from manufacturing without raising prices.

The Taiwan firm announced two pay rises in June, more than doubling the basic worker's pay to 2,000 yuan ($293) a month on the mainland.

The rise followed 10 worker suicides at the Foxconn compound in Shenzhen this year.

Another worker at a Foxconn affiliate died this week after falling from a dormitory in Foshan, Guangdong province.

Huang said Foxconn will also cover the wage increases - to become fully effective in October - by speeding up factory automation programs.

She said Foxconn's Shenzhen compound will produce higher value-added goods, while shifting low-margin production to inland factories where wages are lower.

However, Hsia Chu-chiu, a professor at Taiwan University, who has spoken out against Hon Hai, said suicide problems cannot be solved simply by hiking workers' wages.

"Workers are humans... The suicides have underscored the problems of overwork at Foxconn plants," he said, adding that the mainland government was also to blame for what he called structural problems caused by the mainland's fast-changing society.

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