Foxconn raises workers' wages by up to 25 percent

After worker suicides and a factory explosion in recent months raised questions about its working conditions, Taiwan-based Foxconn Technology Group, the world's largest contract electronics maker, has raised wages for its Chinese workers by 16 to 25 percent.

 

The wage hikes took effect retroactively starting Feb. 1, according to a report by Taiwan's Central News Agency (CNA).

 

This would be the third salary hike since 2010 by Foxconn (Hon Hai Group), which makes the iPhone and iPad for Apple in its factories in China, the CNA report said.

 

Foxconn had been criticized for running "blood and sweat" plants in China.

 

It is undergoing an audit by the U.S.-based Fair Labor Association concerning all aspects of working and living conditions, such as wages, health and safety.

 

The audit was at the request of Apple, which said its suppliers, including Foxconn, will cooperate with the inspectors.

 

Apple in turn launched the initiative in response to recent concerns over labor practices and reported abuses in the Chinese factories of its suppliers.

 

Presently, Foxconn operates four manufacturing complexes in China, including a coastal compound in Shenzhen, and hires more than one million workers.

 

Wage hikes

 

In the Shenzhen plant, which has been the initial production location for Foxconn since 1988, the basic wage will be raised to no less than 2,200 Chinese yuan (NT$11,000) a month from 1,800 Chinese yuan.

 

Before the series of wage hikes, the basic salary in the Shenzhen complex stood at 900 Chinese yuan three years ago.

 

Foxconn, which aims to become a first-tier manufacturer in China, said it is determined to upgrade production technology and improve efficiency and performance, while vowing to offer satisfactory compensation for employees.

 

It added the basic wages in its production lines in China are well above the minimum wages required by local Chinese governments.

 

Also, the group said it will continue to provide its Chinese employees with training courses and learning chances to polish their skills.

 

Suicides, explosions

 

Foxconn started the wage hikes after a worker suicides occurred at its China complexes in 2010.

 

Last year, an explosion happened at its Chengdu plant, killing three workers.

 

To cut rising operating costs in coastal Shenzhen, Foxconn has relocated its production lines to inland Chinese cities.

 

Grand Cathay Securities said the relocation efforts are expected to boost the gross margin of Hon Hai Precision Industry Co., the flagship company of Foxconn and listed on the Taiwan Stock Exchange.

 

The brokerage said Hon Hai Precision's earnings per share could rise to NT$9.5-NT$10 this year from an estimated NT$7.1-NT$7.2 last year. — TJD, GMA News