Foxconn trumps Apple to sit pretty on Fortune 500
But Apple's profits will take some beating
Contract manufacturer Foxconn managed to steal a march on its illustrious partner Apple this week after it was ranked several places higher than the fruity toy maker in the latest Fortune Global 500 rankings, with a whopping $117.5bn (£75.7bn) in revenues.
The Taiwanese giant’s parent company Hon Hai Precision Industry was placed 43rd on the annual list of the world’s biggest companies by revenue. Apple, by contrast, sat in 55th spot with $108.2bn (£69.8bn), climbing an impressive 56 places from last year’s list.
When it comes to profits, however, Apple is the clear winner. It managed to generate $25.9bn (£16.7bn) in profits over the period versus Hon Hai’s $2.8bn (£1.8bn).
In fact, Foxconn’s tight profit margins are frequently cited whenever it decides to raise staff wages or invest in improving working conditions as a factor which could force the firm to pass on cost hikes.
So far those fears have been largely allayed, with the firm sacrificing profits in favour of retaining contracts with Apple and others.
It remains to be seen whether the recent deal struck with Apple and the Fair Labor Association over improved working conditions will finally force a change here.
It has agreed to reduce overtime and working hours, increase staff numbers, develop compensation packages for staff and retroactively pay those cheated out of overtime, among other measures which will further eat into profits.
The Fortune 500 list also revealed China’s inexorable rise on the world stage.
The People’s Republic overtook Japan for the first time and now has the second largest number of companies on the list after the US.
China had 73 companies on the list, 12 more than last year, but is still some way behind the US with 132 companies on the list – one fewer than in 2011. ®