Pressure, Chinese and Foreign, Drives Changes at Foxconn
Over 100 million migrant workers returned to their village homes this month to celebrate China’s Spring Festival, otherwise known as the New Year. Traditionally, factories have had no problem luring those workers back. But many Chinese cities are still confronting serious labor shortages, even though the holiday ended weeks ago. A recent Chinese government report said this year’s labor shortage was more pronounced than those in previous years.
And just as China’s exporters are struggling to cope with labor shortages in coastal regions, they are also confronting higher raw material costs and a strengthening Chinese currency, which makes Chinese goods more expensive in other nations.
“China can’t guarantee the low wages and costs they once did,” said Ron Turi of Element 3 Battery Venture, a consulting firm in the battery industry. “And companies like Foxconn have developed international profiles, and so they have to worry about how they’re seen by people living in places with very different standards.”
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If the workers will not move to the coast, the logic is that the coastal factories ought to move to where the workers are living. Big manufacturers like Foxconn have responded to such challenges by moving factories inland.
And worried that the old model is dying, Foxconn has announced plans to invest in millions of robots and automate aspects of production.
Tuesday, February 21, 2012
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