Foxconn reports $17.6m 1st-half loss as robot legion grows
Company that actually makes everything struggles
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Foxconn International, which makes components for Apple, Motorola Mobility and Nokia products, has seen considerably reduced first-half losses this year, though its outlook is still uncertain.
The unit of Taiwanese electronic components conglomerate Foxconn Technology Group reported an unaudited loss of $17.6m, compared to a loss of $143m in the same period of 2010.
"The global handset eco-system remained extremely volatile and challenging during the first half of 2011," the company said. "We continued to see market share shifts among global OEM brands and other market players."
Profit at Foxconn is being impacted by changes in the mobile world, particularly at Motorola and Nokia, two of its biggest clients. Nokia continues to see its market share eroded as it struggles to find its feet in a rapidly-changing smartphone landscape and Google is set to buy Motorola Mobility for $12.5bn, leaving the future of the handset business uncertain.
The company has also had its own problems, with a number of worker suicides throwing a less-than-flattering spotlight on wages and treatment of its workforce and an explosion at a new factory in Chengdu in May, which killed three employees.
As well as pay rises, improved facilities and counselling for workers, Foxconn seems to think that more automation is the answer to the unhappiness of its employees. In July it announced a plan to replace some of them with a million robots over the next three years. Terry Gou, founder and chairman of the company, said at the time that the plan would help cut rising labour expenses and improve efficiency.
In the meantime, "development of new customers and excelling in the smartphone market remain top priority", according to Foxconn International's results announcement. ®
COMMENTS
Have you seen them?
Their leg-less torsos are bolted to the table, while the hunched upper body and arms imitate the cramped workers they replace, if these robots had faces, they would look like Marvin.
http://hitechanalogy.com/wp-content/uploads/2011/08/Foxconn-Robots-500x353.jpg
title
A robot may cost money but a robot won't sue you, won't claim unemployment, won't quit, won't show up drunk, etc...
Once installed most robotic operations are not maintained to the extent that they should be so the line of them needing people to service them doesn't really float. Most companies will simply hire a guy to work at the company to resolve robotic issues either part or full time so outside help is rarely needed.
I've seen benefits on both sides. Robots will do jobs people do not want to do however at the same time a robotic operation is a real wakeup call to an economy.
So much goes into making even a simple robot do something you could say to yourself boy look at how much work has gone into building this thing; that must really help jobs but it doesn't; unless your idea of jobs is creating them in china since that's where most of it will probably have come from minus the china price-tag.
machines v people
If the work is done by machines then wouldn't it negate a chunk of the cost savings from going to cheap labour markets, after all the investment in the machine is the same no matter where you site it and I would assume there is a lot less variability in running costs than there is in labour costs.
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