Original URL: http://www.theregister.co.uk/2010/06/10/foxconn_restructuring/

iPhone manufacturer to shutter China factories

Foxconn idles up to 800,000

By Rik Myslewski

Posted in Business, 10th June 2010 22:45 GMT

Foxconn – the massive Taiwan-based contract manufacturer whose clients include Apple, Dell, HP, Intel, Sony, and others – will shutter its mainland China operations in a restructuring that could move as many as 800,000 workers into the ranks of the unemployed.

This news comes by way of the Chinese-language news site ON.CC — a Google translation is available here — and couldn't immediately be independently verified.

The announcement came at a shareholders meeting of the Hon Hai Group, Foxconn's parent company. Chairman Terry Gou said that production would be withdrawn from mainland China and shifted to Taiwan, Vietnam, and India. There are currently 800,000 Foxconn workers on the mainland, and if all Foxconn manufacturing there eventually ceases, they would all be out of work.

Foxconn has been under fire recently for a series of suicides at its Shenzhen, China factory. Gou said that the Chinese government had sent 200 inspectors to the plant, which employs somewhere between 270,000 (Financial Times) and 400,000 (Steve Jobs) workers, and that Foxconn management had been exonerated.

Guo also said that the ongoing rash of suicides could be of the copy-cat variety, fueled by media coverage. He also noted that the company had suspended death benefits to remove that impetus for jumping, the favored method of suicide not only at Foxconn's Shenzhen plant, but in urban China in general.

In another bid to improve conditions at its mainland Chinese factories, Foxconn announced two substantial pay raises: a 30 per cent across-the-board raise announced last week, and a 66 per cent performance-based raise to go into effect in October.

According to ABC News the company provided no details on how performance would be evaluated. ®

Bootnote

The Reg thanks reader "JeffyPooh" for the ON.CC tip.