Foxconn plans to move its plants

After telling the world+dog that it was jacking up the salaries of workers at its two production bases in Shenzhen, it seems that Foxconn is planning to shift most of its work to other plants.

According to the China Times, Foxconn has already shifted a large portion of the production lines from Shenzhen to its production bases in Tianjin, northern China, and Wuhan and Chongqing, western China.

The two production bases in Shenzhen currently have 400,000 employees in total and will be combined into one, with only a few relatively profitable production lines to remain, the report claimed.

The reason for this sudden shift? Well it turns out that the minimum monthly wages in Tianjin and Wuhan are currently about $135.  This is much lower than Shenzhen where the outfit has just increased salaries to about $200 in a bid to stop workers from topping themselves.  The wage increases were a sop to Apple which was increasingly alarmed by the fact that its shiny toys were being made in a place where the suicide rate was high.

Foxconn began to stop recruiting new employees in Shenzhen in May 29 so the ones it will keep will get the new wages. This might explain why Foxconn could confidently say that increasing wages in Shenzhen would not harm its bottom line.  By moving production away from Shenzhen where the media attention is focused, Foxconn can continue to operate in the way it always has.

Meanwhile, the Taipei Times reports today that 150 academics have petitioned to stop Taiwanese companies operating sweatshops. They want the Taiwanese government not to ignore the plight of workers for companies based on the island, and to reflect this by withdrawing grants or favourable policies towards firms that step over the line.