A plan by Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics maker, to increase wages for its employees in Taiwan in July is expected to prompt other enterprises in the local business sector to follow suit, an analyst said yesterday.
“Hon Hai Precision is a local business leader. I think its move will serve as a strong indicator to the business sector,” Mirae Asset Management analyst Arch Shih (施博元) said.
Hon Hai chairman Terry Gou (郭台銘) said in a TV interview on Wednesday that his company is reviewing pay scales for its employees in Taiwan as the public is faced with a rising cost of living since the government removed a mechanism to partially freeze domestic fuel prices.
The government is also likely to raise electricity prices after the latest increase in fuel prices, which became effective on Monday.
Gou said he hopes the pay increases will go into effect in July after the current review is completed.
He added that employees are Hon Hai Precision’s most precious asset and that under the current circumstances the company should raise their wages.
However, he did not elaborate on the size of the salary increase for the company’s approximately 10,000 employees in Taiwan.
Local media have reported that some other high-tech heavyweights, such as notebook computer maker Compal Electronics Inc (仁寶電腦) and flat panel makers AU Optronics Corp (友達光電) and Chimei Innolux Corp (奇美電子), might also give their employees a pay raise later this year.
The plan to raise wages did not have an adverse impact on Hon Hai shares on the local bourse, with the stock outperforming the broader market to close up 0.91 percent at NT$111.
Shih said that was because investors have been upbeat about a tie-up between Hon Hai and Japan’s Sharp Corp that was announced last month.
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