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Electronics Production | June 10, 2010

Foxconn to quit factory towns

EMS-provider Foxconn is to abandon the ‘factory town’ model.
The “structure [of the manufacturing industry in China] has to change”. The change implemented by Foxconn might be rather quick and forward-moving, but the adjustment to a higher-wage environment would be even faster and more ferocious, an FT article states, referring to Terry Gou at the Annual Shareholder Meeting of parent company Hon Hai.

As reported earlier, the Taiwan-based EMS-provider has recently announced a second—performance based—pay rise for its frontline workers across China.

The factory town model—which served them well when they entered China—is becoming outdated. Foxconn wants to separate work and living environments and one way of achieving this would be to sell the dormitories to the Chinese government.

“If a worker in Taiwan commits suicide because of emotional problems his employer won’t be held responsible, but we are taken to task in China because they are living and sleeping in our dormitories. This has become too big a burden for Foxconn to bear”, Terry Gou is cited in an FT article.

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