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.
STEADY: Prices are to rebound following inventory rebuilding demand, TrendForce said, with Samsung Electronics Co further trimming capacity as it slashes DDR4 lines The contract prices of DRAM chips are to rise by as much as 18 percent sequentially this quarter — the first price upticks in about eight quarters — driven mainly by inventory rebuilding demand for DRAM chips used in mobile devices and PCs, TrendForce Corp (集邦科技) projected yesterday. The price rebound is led by a quarterly increase of mobile DRAM chips, which are to climb between 13 percent and 18 percent quarter-on-quarter this quarter, which has not been seen since the fourth quarter of 2021, the Taipei-based market researcher predicted. Likewise, the price of mainstream PC DDR4 DRAM is expected to bounce
CHINA NOT A FRIEND: ‘Newsflash: Democracy is good for your businesses,’ US Secretary of Commerce Gina Raimondo said as she gave a speech at a national defense forum US Secretary of Commerce Gina Raimondo on Saturday urged lawmakers, Silicon Valley and US allies to stop China from getting semiconductors and cutting-edge technologies key to national security. Speaking at an annual national defense forum in Simi Valley, California, Raimondo called Beijing “the biggest threat we’ve ever had” and stressed that “China is not our friend.” The world’s top two economies are locked in a fierce commercial and geopolitical rivalry, in which her department plays a leading role. In October, Raimondo unveiled a series of restrictions on the export of advanced chips to China, including those used in the development of artificial intelligence
SOLID FOUNDATION: Given its decades of expertise in megatronics, manufacturing and robotics, Japan has the wherewithal to create its own AI, Jensen Huang said Nvidia Corp plans to help build an artificial intelligence (AI) tech-related ecosystem in Japan to meet demand in a country eager to gain an edge in this emerging technology. The US company will seek to partner with Japanese research organizations, companies and start-ups to build factories for AI, Nvidia CEO Jensen Huang (黃仁勳) said yesterday during opening remarks in a meeting with Japanese Minister of Economy, Trade and Industry Yasutoshi Nishimura. The company is to set up an AI research laboratory, and invest in local start-ups and educate the public on using AI, Huang said. Huang earlier this week met with Japanese Prime
A Hong Kong court postponed a court hearing on troubled Chinese property developer Evergrande Group’s (恆大集團) winding-up petition scheduled for yesterday until Jan. 29. Evergrande is trying to win support from its creditors for a plan to restructure more than US$300 billion in debt to stave off liquidation. The company’s lawyer told the court it was requesting an adjournment to “refine” its new debt restructuring plan. The Hong Kong High Court has postponed the hearing over Evergrande’s potential liquidation several times. Judge Linda Chan (陳靜芬) had said in October that yesterday’s hearing would be the last before a decision is handed down. Chan