Foxconn Passing Salary Raises on to Apple, Sony, Others

Foxconn is addressing the near-dozen worker deaths on its Shenzhen campus by raising wages considerably. It expects "the global food chain" to help with this expense, which means passing fees to Apple, Sony, Dell and other customers to defray some of the costs.

Foxconn has a new plan for ending the ongoing worker suicides that have plagued the electronics manufacturer since the start of the year. The plan includes significant wage increases, the burden of which Foxconn plans to pass along to customers such as Apple, Dell and Sony.

According to the Financial Times, Foxconn announced June 6 that in addition to its previously announced 30 percent worker wage increase, set to take place July 1, "workers who reach certain performance standards would also get another 66 percent pay rise from October 1."
In a prepared statement, Foxconn added that the "monthly wage for all first-line employees and their line leaders and supervisors in Shenzhen will be elevated to [approximately $290] as early as October 1, 2010" if workers pass a three-month evaluation period.
Current worker salaries have been reported to be approximately $132 a month, the legal minimum wage in China, according to the Wall Street Journal. According to a number of sources, workers at Foxconn, also known as Hon Hai Precision, generally work up to 12-hour days and can go weeks without taking a day off. Many are said to accept overtime hours to help supplement their pay.
Foxconn Chairman Terry Gou has gone out of his way to prove to the media that conditions inside the facility are far from that of a sweatshop, though the pressing issues appears to be that workers face long hours performing repetitive tasks under strict conditions. According to the BBC, workers must be silent on assembly lines, and so often go entire workdays without conversation.
Since the start of the year, at least 12 workers have reportedly attempted suicide, most by jumping from buildings on the extensive Foxconn campus; two young men are said to have survived their falls.
According to reports, Foxconn is also looking into automating repetitive tasks as a way of better managing costs.
Apple - whose iPad and iPhone are assembled by Foxconn - as well as Dell and Nokia have each released statements addressing the worker deaths and insisting on the seriousness with which they're taking the situation. Now, says Foxconn, it's time for them to take on some financial responsibility as well.
While not specific about how its additional new costs will be shared, FT reports that Foxconn stated, "We are applying international standards now. The time has come for the global food chain to face these issues."
According to the Taipei Times, Hon Hai saw 2009 revenue of approximately $44.56 billion - which put it at the very top of a list of 20 Asia-based notebook and panel manufacturers that each reported 2009 earnings Jan. 8, 2010.