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Globalization, Foxconn and the Chinese working people. What is the problem?

by Peter Schnall and Erin Wigger

We begin herein a series of blogs looking at the relationship between the processes of globalization and the worldwide development of industrial production as they impact on work organization and affect the lives of working men and women. Central to this exploration will be an in depth look at Foxconn, one of China’s foremost companies, which we will use as an example of issues related to globalization. China has one of the fastest growing economies in the world and has become over the past several decades one of the most powerful countries in the world. While China has always been rich in natural resources, the secret to its success is not a product of its agricultural production or natural resources, but it’s immense population which provides a large, well-trained and inexpensive (relative to the Western world) workforce..

Of China’s many rapidly growing companies, one stands out from the rest; among the Fortune Global 500 with $102 billion in revenue in 2010 and now with almost 1 million workers, Foxconn and it’s parent company Hon Hai have set the standard which many other companies now follow. Founded in 1974 by Terry Gou (currently Chairman and President), the Taiwanese company set out to provide businesses with alternatives to more expensive electronics manufacturing. According to the Foxconn Global website, Foxconn has achieved remarkable sales and growth figures. Between 2009 and 2010 the company’s consolidated revenues grew 52.98% to NT$2.997 trillion (US$104.6 billion) (CNA English News).

Now the largest electronics manufacturing company in the world and the fifth largest company worldwide in number of employees after Walmart, China National Petroleum, State Grid, & the U.S. Postal Service – Foxconn supplies companies such as Apple, Dell, Hewlett-Packard and Sony with notebooks, desktop computers, monitors, smart phones, iPads and other popular products. “Foxconn has 13 mainland factories in nine cities in China. Planned factories include expanding sites at Chengdu in Sichuan province, Wuhan in Hubei province, and Zhengzhou in Henan province.” (Wikipedia) The first of these plants was its Shenzhen plant, which opened in 1988. Since then, it has become Foxconn’s largest plant, a walled city of more than 1.15 square miles including 15 factories, its own fire department, worker dormitories and a small city of restaurants and shops, all located on one property.

Although the plant is responsible for a large portion of the company’s overall success, it has also been the subject of repeated reports of worker mistreatment. It was in the news repeatedly last year after it experienced a number of suicides – 14 to date.  Foxconn responded to the suicides by raising wages 66%, boosting its number of counselors, and making stress management programs available to workers. It also built safety netting around its factory to prevent further suicide attempts and, for a short while, asked its workers to sign an anti-suicide pact. Foxconn has also responded to the suicides at the plant with claims it’s number of suicides, per capita, are not much higher than China’s national average, implying the suicides are not really a problem.

Suicides and employee discontent at the Shenzhen plant are not the only problems facing Foxconn. Foxconn has also been accused of discrimination against main-land Chinese workers and the forcing of many rural farmers off their land to make way for the huge factory developments currently heading farther and farther inland. Foxconn’s Chengdu plant is one of these. You might have already heard of the Chengdu plant; it appeared in the news last month after three workers were killed in an explosion caused by inadequately ventilated combustible dust. Built in the rural southwestern province of Sichuan, Chengdu was rapidly converted into a facility to make iPads in response to high demand from Apple. Currently staffed by 80,000 workers, Foxconn is looking to add another 220,000 workers at the Chengdu facility in coming years.

The cluster of suicides, the explosion at Chengdu, and the long-standing complaints by workers raise serious questions for some. Why did this group of young workers commit suicide? Did Foxconn’s work environment and employee policies play a role in these deaths? What are the labor practices at Foxconn? Is there a connection between Foxconn’s rapid growth, its labor practices and the explosion at Chengdu? Many newspapers and watch-dog groups such as SACOM (Students and Scholars Against Corporate Misbehavior) have charged the company with “dangerous working environment, inadequate measures on work safety, excessive and forced overtime work, and that workers are deprived of a social life.” Can these accusations be substantiated  and what is Foxconn’s defense? 

In subsequent blogs we will look at these issues regarding Foxconn. And beyond Foxconn, we need to ask if these problems are limited to Foxconn or are these issues typical of China? Finally, we want to raise the question about the relationship between these working conditions in Chinese factories and the overall process of globalization? Stayed tuned for subsequent blogs, the first of which will examine what is publicly known about working conditions at the Shenzhen plant.


References:

“Fortune Global 500 2010: The World’s Biggest Companies – Hon Hai Precision I

Industry”, Fortune, 2010 Industry”

“Foxconn plans to increase China workforce to 1.3 million”. Focus Taiwan News Channel. 2010-08-19. Retrieved 2010-08-19.

About Foxconn: Group Profile Foxconn Technology Group official site

Suicides at Foxconn: Light and Death economist.com, May 27, 2010

iPod City: Apple criticized for factory conditions arstechnica.com, June 12, 2006

Inside Apple’s iPod factories macworld.co.uk, Mon, 12 Jun 2006

Foxconn Workers in China Say ‘Meaningless’ Life Sparks Suicides businessweek.com, June 02, 2010, 8:00 PM EDT

“Inside Apple’s iPod Factories”, MacWorld website, June 12, 2006

Foxconn to raise wages again at China plant reuters.com, Fri Oct 1, 2010 8:42am

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