Foxconn International Holdings (富士康) said it will seek higher prices from its clients to help offset wage hikes at a plant in southern China that has been hit by a series of suicides.
Meeting shareholders in Hong Kong for the first time since the deaths, executives at Foxconn, owned by Hon Hai Precision Industry Co (鴻海精密), said the company hoped to reach a consensus with customers this month.
At a separate shareholder meeting in Taipei, Hon Hai chairman Terry Gou (郭台銘) said a report he had commissioned showed no clear link between the suicides and work issues.
PHOTO: MAURICE TSAI, BLOOMBERG
“We have to carry the 12 crosses, we have no options,” Gou said, referring to the 10 suicides and two other attempted suicides.
Hon Hai has announced two wage raises in the past two weeks for workers at its Shenzhen plant. Gou said the company would raise wages at all its factories in China, but the pay hikes at the different factories will vary because of differences in the cost of living.
Gou, 59, said the decision to raise salaries proved the company was “not making money by exploiting workers.”
PHOTO: PICHI CHUANG, REUTERS
“The pay hike may have a short-term impact on profits, but it’s good for the long term, because it will attract better and more stable workers,” he said.
Hon Hai has lost more than US$3 billion market value in two days as investors fret over the pay increases.
“I think the pay hike is too much,” said a shareholder surnamed Chen who was attending the Taipei meeting. “I’m concerned this will increase production costs and affect profits.”
Hon Hai will also offer start-up loans of 200,000 yuan (US$29,275) each to employees who have been with the company for more than five years, Gou said.
Workers who apply for and obtain the loans will be able to return to their hometowns, start their own businesses and even place orders with Hon Hai, he said.
But in a sign of changes ahead, Gou said the company was looking for locations to shift some unspecified production from China to automated plants in Taiwan and wanted local authorities in China to manage its worker dormitories.
He also said he would limit overtime at Chinese plants to no more than three hours a day.
A group of about 30 protesters gathered outside Hon Hai’s meeting, including labor activists, green and gay groups and others.
“I think Gou is trying to use salary hikes to cover up how his production line is killing people. It’s a crime in management and we really despise it,” said Huang Hsiao-ling (黃小陵), secretary-general of the Worker Injury Association.
About 30 protesters stood outside the Hong Kong shareholders’ meeting calling on Apple to act on the Foxconn situation.
Holding placards reading “Workers are not machines. They have self-esteem” and a picture of a rotten apple, protesters handed a petition to a company representative.
They also waved a cardboard cutout of chief executive Steve Jobs with devil’s horns and another placard featuring the company logo and the words “Bloody Apple.”
Gou also announced plans to more than double the size of a share issue to fund future expansion for Hon Hai, including into cloud computing and LEDs. He said the firm would issue up to 880 million shares in depositary receipts.
Hon Hai’s shares on the Taiwan Stock Exchange dropped 6.38 percent at one point yesterday, close to the 7 percent maximum allowed, after ending on Monday 5.62 percent lower. The shares closed 5.11 percent lower yesterday at NT$111.5.
Alphabet Inc’s Google on Tuesday announced plans to buy a New York office building for US$2.1 billion, confirming its push into the US’ largest city despite the COVID-19 teleworking trend. This is the largest real-estate purchase in the US for an office building since the beginning of the global spread of COVID-19, the Wall Street Journal quoted Real Capital Analytics as saying. Google already rents the premises in Manhattan, which are located on the site of a former railroad terminal in the Hudson Square neighborhood. The Silicon Valley giant envisions a campus with a total surface area of 160,000m2 by mid-2023
‘CORE VALUES’: The contract chipmaker did not specify why the employees were dismissed, but media reports said they had leaked information about customer orders Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has fired seven of its employees for violating the company’s “core values,” the world’s largest contract chipmaker said yesterday. While the company did not disclose exactly why it fired the seven employees, local media reports earlier in the day said that the employees had leaked confidential information about customer orders. In a statement, the company said that it fired the seven at once, adding that it released an internal notice last week to inform the entire company of the move ahead of the four-day Mid-Autumn Festival holilday, which ended on Tuesday. TSMC said it fired the seven
MILD ADJUSTMENT: Two previous efforts failed to curtail mortgage financing, although the new measures should not affect property prices, the central bank governor said The central bank yesterday tightened credit controls for second-home mortgages in specific areas and purchases of plots of land, especially in industrial parks. However, the nation’s top monetary policymaker kept its policy rate at a record-low 1.125 percent for the sixth consecutive quarter, despite revising up its GDP growth forecast for this year from 5.08 percent to 5.75 percent. “Board members factored in economic uncertainty at home and around the world,” central bank Governor Yang Chin-long (楊金龍) said, adding that growing inflationary pressure was a temporary phenomenon induced by bad weather and a low base effect for oil prices. International fuel price increases
DOWNCYCLE: Most buyers are wary about placing new orders, and although the decline could also be as little as 3%, it would be the first drop since the start of the year The average selling price of DRAM chips next quarter is expected to decline by up to 8 percent quarter-on-quarter, with memory chips used in notebook computers and consumer electronics seeing the steepest decline due to excess inventory and a shortage of components, market researcher TrendForce Corp (集邦科技) said yesterday. That means the DRAM industry is entering a new downcycle after experiencing a boom for three quarters, the longest uptrend in the history of the industry. The Taipei-based researcher said it expects the balance between supply and demand to begin tilting toward a surplus in the final quarter of this year. Most DRAM