Fri, Mar 10, 2006 - Page 11 News List

Foxconn planning layoffs in Finland

FINNISH CULL The electronics giant plans to cut staff numbers at its operations in Finland as part of an effort to consolidate the company's global production network

By Kelvin Wong and Saikat Chatterjee  /  BLOOMBERG

Foxconn International Holdings Ltd (富士康控股), the Hong Kong-listed unit of Taiwan's biggest electronics equipment maker, is planning to cut staff at its factories in Finland, according to a company spokesman.

Shenzhen-based Foxconn, which makes mobile phones, is a unit of Hon Hai Precision Industry Co (鴻海精密). The company is in talks with labor unions in Finland about the plan and has not decided how many employees it will cut, spokesman Vincent Tong (童文欣) said in an interview yesterday.

Tong denied a report in the Taipei-based Economic Daily News that said the company plans to shut down Finnish factories.

"It's still up and running," Tong said. "We're constantly adjusting capacity and personnel, according to our customers' requirements and to what is most cost effective."

The staff reduction is part of the company's efforts to consolidate its global production network, which includes sites in Brazil, India and China, to lower costs, Tong said. The operations in Finland, which make handset components, have more than 500 employees.

Despite its plan to lay off some of its Finnish workforce, Hon Hai will invest US$110 million over five years to make mobile phones and components for Nokia Oyj in the southern Indian city of Chennai.

The investment will create more than 10,000 jobs, Hon Hai Chairman Terry Gou (郭台銘) said in a Feb. 22 letter informing India's Communications Minister Dayanidhi Maran of the plan. Gou didn't provide a timeframe in the letter, a copy of which was seen on Tuesday.

Hon Hai, based in Taipei, and other electronics makers including Flextronics International Ltd and Solectron Corp are setting up units or expanding in India on demand for gadgets such as mobile phones. The number of cellphone users in India, at fewer than one in 10 people, is expected to almost quadruple to 300 million by the end of 2009, researcher Gartner Inc said.

The company plans to make handsets and mobile-phone components in Chennai, the capital of Tamil Nadu province, for Nokia and Motorola Inc, the world's two biggest cell-phone makers, the letter said. Hon Hai also plans to set up a center, the Sriperumbudur Hi-Tech Innovation Park, with the Tamil Nadu government and Motorola to make computer parts, mobile handsets and other electronic hardware as part of the investment, according to the letter.

Espoo, Finland-based Nokia will begin operations at its first factory in India on March 11. Chief executive officer Jorma Ollila will attend the opening ceremony for the Chennai factory, expected to cost more than US$150 million and employ about 2,000 workers.

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