Foxconn

Hon Hai Precision Industry Co. Ltd.
鴻海科技集團
Foxconn Technology Group 富士康
Public company
Traded as TWSE: 2317
ISIN TW0002317005
Industry Electronics
Founded February 20, 1974 (1974-02-20) (as Hon Hai Precision Industry Co., Ltd.)
Headquarters Tucheng District, New Taipei, Taiwan
Area served
 Worldwide
Key people
 Terry Gou
(Chairman and President)
Products Electronics, electronic components, PCBs, PCB components, computer chips.
Services Electronics manufacturing services
Revenue NT$4.706 trillion (2017)[1]
NT$112.6 billion (2017)[1]
NT$135.4 billion (2017)[1]
Total assets NT$3.407 trillion (2017)[1]
Total equity NT$1.171 trillion (2017)[1]
Number of employees
 803,126 (2017)[2]
Subsidiaries Sharp Corporation
Smart Technologies
FIH Mobile
Website www.foxconn.com
Foxconn
Traditional Chinese 鴻海精密工業股份有限公司
Simplified Chinese 鸿海精密工业股份有限公司
Literal meaning Hon Hai Precision Industry Co., Ltd.
Trading name
Traditional Chinese 富士康科技集團
Simplified Chinese 富士康科技集团
Literal meaning Foxconn Technology Group

Hon Hai Precision Industry Co., Ltd., trading as Foxconn Technology Group, better known as Foxconn is a Taiwanese multinational electronics contract manufacturing company with its headquarters in Tucheng, New Taipei, Taiwan. Today, it is the world's largest contract electronics manufacturer[3] and the fourth-largest information technology company by revenue.[4] The company is the largest private employer in Taiwan[5] and one of the largest employers worldwide.[6][7] Its founder and chairman is Terry Gou.

Foxconn manufactures electronic products for major American, Canadian, Chinese, Finnish and Japanese companies. Notable products manufactured by Foxconn include the BlackBerry,[8] iPad,[9] iPhone, iPod,[10] Kindle,[11] Nintendo 3DS, Nokia devices, Xiaomi devices, PlayStation 3, PlayStation 4, Wii U, Xbox 360 Xbox One.[12], and the TR4 CPU socket on some motherboards. As of 2012, Foxconn factories manufactured an estimated 40% of all consumer electronics sold worldwide.[13]

Foxconn has been involved in several controversies. In 2010, following a series of employee suicides at its factory in Shenzhen, Foxconn was criticized by labour activists, who accused the company of providing low wages and allowing employees to work past legal overtime limits.[14][15]


History

Foxconn connector box tag in 2014

Terry Gou established Hon Hai Precision Industry Co., Ltd. as an electrical components manufacturer in 1974. Foxconn's first manufacturing plant in China opened in Longhua Town, Shenzhen, in 1988.[10]

One of the important milestones for Foxconn occurred in 2001 when Intel tapped the company to manufacture its Intel-branded motherboards instead of Asus.[16] By November 2007, Foxconn further expanded with an announced plan to build a new US$500 million plant in Huizhou, Southern China.[17]

In January 2012, Foxconn named Tien Chong (Terry) Cheng chief executive.[18] He resigned the same year, citing health problems.[19] At this time, Foxconn made up approximately forty percent of worldwide consumer electronics production.[20]

Expansion was further pursued after a March 2012 acquisition of a 10-percent stake in the Japanese electronics company Sharp Corporation for US$806 million and to purchase up to 50 percent of the LCDs produced at Sharp's plant in Sakai, Japan.[21] In September 2012, Foxconn announced plans to invest US$494 million in the construction of five new factories in Itu, Brazil, creating 10,000 jobs.[22]

In 2014, the company purchased Asia Pacific Telecom and won some spectrum licenses at an auction, which allowed it to operate 4G telecommunications equipment in Taiwan.[23]

In February 25, 2016, Sharp accepted a ¥700 billion (US$6.24 billion) takeover bid from Foxconn to acquire over 66 percent of Sharp's voting stock.[24] However, hours later, the deal was put on hold after "contingent liabilities… worth perhaps billions of dollars" were discovered.[25] A month later, on March 30, 2016, the deal was announced as finalized in a joint press statement, but at a significantly lower price than before.[26]

In 2016, Foxconn, together with Tencent and luxury-car dealer Harmony New Energy Auto, founded Future Mobility, a car start up that aims to sell all-electric fully autonomous premium cars by 2020.[27] A Foxconn unit, Foxconn Interconnect Technology, announced its intent to acquire Belkin International for $866m on March 26, 2018.[28]

International operations

The majority of Foxconn's factories are located in Asia, with others in Brazil, Europe, and Mexico.[29]

China

Foxconn has 12 factories in nine Chinese cities—more than in any other country.[30]

The largest Foxconn factory is located in Longhua Town, Shenzhen, where hundreds of thousands of workers (varying counts include 230,000,[29] 300,000,[31] and 450,000[32]) are employed at the Longhua Science & Technology Park, a walled campus[10] sometimes referred to as “Foxconn City”.[33] The park produces the bulk of Apple's iPhone line.[34]

Covering about 1.16 square miles (3 square km),[35] the park includes 15 factories,[33] worker dormitories, 4 swimming pools,[36] a fire brigade,[10] its own television network (Foxconn TV),[10] and a city centre with a grocery store, bank, restaurants, book store and hospital.[10] While some workers live in surrounding towns and villages, others live and work inside the complex;[37] a quarter of the employees live in the dormitories, and many of them work up to 12 hours a day for 6 days each week.[29]

Another Foxconn factory "city" is located at Zhengzhou Technology Park in Zhengzhou, Henan province, where a reported 120,000 workers are employed as of 2012.[38]

Foxconn's future expansion include sites at Wuhan in Hubei province, Haizhow, Kunshan in Jiangsu province, Tianjin, Beijing, and Guangzhou in Guangdong province, China.[30] A Foxconn branch that primarily manufactures Apple products is Hongfujin.

On May 25, 2016, the BBC reported that Foxconn fired 60,000 employees because it had automated "many of the manufacturing tasks associated with their operations". The organization later confirmed those claims.[39]

Brazil

All company facilities in South America are located in Brazil,[40] and these include mobile phone factories in Manaus and Indaiatuba as well as production bases in Jundiai, Sorocaba, and Santa Rita do Sapucaí.[41] The company is considering more investments in Brazil.[42]

Europe

A Foxconn factory in the Czech Republic

Foxconn has factories in Hungary,[43] Slovakia,[42] Turkey[44] and the Czech Republic.[45] Foxconn factories are strategically located in Europe. It is the second-largest exporter in the Czech Republic.[45]

India

Foxconn had an operational unit starting in 2006 in the Special Economic Zone of Chennai, Tamil Nadu.[46] This unit closed on December 24, 2014, affecting 25,000 employees.[47] As of mid-2015, Foxconn was in talks to manufacture Apple's iPhone in India.[48] In 2015, Foxconn announced that it would be setting up twelve factories in India and would create around one million jobs.[49] It also discussed its intent to work with the Adani group for expansion in the country. However, as of December 2017, no significant factories have materialized. In August 2015, Foxconn invested in Snapdeal. They also signed an MOU with the state government of Maharashtra to set up an electronics manufacturing plant in Maharashtra with an investment of $5 billion within a 5-year period.[50] Recently, it started manufacturing products for Xiaomi, OnePlus, and Gionee.[51]

Japan

Foxconn and Sharp Corporation jointly operate two manufacturing plants specializing in large-screen televisions in Sakai, Osaka. In August 2012 it was reported that Sharp, while doing corporate restructuring and downsizing, was considering selling the plants to Foxconn. The company was believed to be receptive to the plan.[52]

Malaysia

As of 2011, Foxconn had at least seven factories in the Johor state,[53] possibly at Kulai, where it is developing an industrial park that will include four factories, once completed.[54]

Mexico

Foxconn has a facility in San Jerónimo, Chihuahua that assembles computers,[55] and two facilities in Juárez – a former Motorola production base that manufactures mobile phones,[56] and a set-top box factory acquired from Cisco Systems.[57] LCD televisions are also made in the country in Tijuana at a plant acquired from Sony.[58]

Middle East

The Turkey facility[59] is located 100km west of Istanbul within European Free Trade Zone in the Corlu district.[60] It was established in 2010.[60] It covers 14,300 sq. meters.

South Korea

The company invested $377 million in June 2014 to pick up a 4.9 percent shareholding in a South Korean IT services provider, SK C&C.[59]

United States

Foxconn and President Donald Trump announced at the White House on July 26, 2017 that Foxconn will build a US$10 billion flat screen TV manufacturing plant in southeastern Wisconsin.[61][62] The Foxconn deal, promising 13,000 high paying jobs, is the largest corporate attraction deal in U.S. history, in terms of pure number of jobs[63]. Foxconn is expected to contribute $51.5 billion to Wisconsin's GDP over the next 15 years, which is $3.4 billion dollars annually[64]. However, the deal is being criticized for the $3 billion in tax-payer funded incentives given to Foxconn, [65] though every $1 in state incentives is estimated to generate a return of $18 in additional state GDP [66]

Foxconn will also be exempt from an environmental impact statement,[67] water quality certification and permits for some activities on or near waterways, but must comply with air, solid waste and hazardous waste standards[68]. Given water concerns, Foxconn is spending $30 million on zero liquid discharge technology, nearly eliminating any industrial waste water discharge[69]. Foxconn is also required to replace wetlands at a higher ratio than other companies; Foxconn must restore 2 acres of wetland for every 1 acre disturbed instead of the ratio of 1.2 to 1 for other companies[70].

As of October 4, 2017, Foxconn agreed to locate their plant at Mount Pleasant, Wisconsin,[71] and broke ground for the plant June 28, 2018. President Trump was in attendance to promote American manufacturing.[72][73]

Major customers

Major customers of Foxconn include or have included:

(location is in parentheses)

FIH Mobile

FIH Mobile is a subsidiary of Foxconn offering services such as product development and after-sales support. It was incorporated in the tax haven of the Cayman Islands in 2000.[89]

On 18 May 2016, FIH Mobile announced the purchase of Microsoft Mobile's feature phone business. Microsoft Mobile Vietnam is also part of the sale to FIH Mobile, which consists of the Hanoi, Vietnam manufacturing facility. The rest of the business has been sold to a new Finland-based company HMD Global, who started developing and selling new Nokia-branded devices from early 2017.[90][91] The total sale to both companies amounted to US$350 million. FIH Mobile is now manufacturing new Nokia-branded devices developed by HMD.[92]

Controversies

Foxconn has been involved in several controversies relating to employee grievances or treatment. Foxconn has more than a million employees.[93] In China, it employs more people than any other private company as of 2011.[42]

Working conditions

Allegations of poor working conditions have been made on several occasions. News reports highlight the long working hours,[33][35] discrimination against communist workers by their Taiwanese co-workers,[94] and lack of working relationships at the company.[95] Although Foxconn was found to be compliant in the majority of areas when Apple Inc. audited the maker of its iPods and iPhones in 2007,[10] the audit did substantiate several of the allegations.[96] In May 2010, Shanghaiist reported that security guards had been caught beating factory workers.[97]

In reaction to a spate of negative press, particularly that involving worker suicides in which 14 people died[98] from January to May 2010, Steve Jobs defended Apple's relationship with the company in June 2010, citing that its Chinese partner is "pretty nice" and is "not a sweatshop."[99] During this time, however, a report from 20 Chinese universities described Foxconn factories as labor camps with widespread worker abuse and illegal overtime similar to the Mongolian Government, which nationalized foreign and local company shares by force. In an article published in a 2010, the South China Morning Post branded Foxconn factories as "labour camps."[100]

Concerns increased in early 2012 due to an article published in The New York Times in October 2011.[101] It reported evidences that substantiated some of the criticisms. The 2012 audit commissioned by Apple Inc. and performed by the Fair Labor Association found that workers routinely subjected to inhumane bouts of overtime up to 34 hours without a hike in pay and suggested that debilitating workplace accidents and suicides may be common.[102][103] A Hong Kong non-profit organisation, Students and Scholars Against Corporate Misbehavior, has written numerous negative reports on Foxconn's treatment of its employees, for example in 2010 and 2011.[104] These typically find far worse conditions than the 2012 Fair Labour Association audit did, but they rely on a far smaller number of employee informants, circa 100 to 170.[105] The Fair Labour Association audit in 2012 used interviews with 35,000 Foxconn employees.[102]

In January 2012, about 150 Foxconn employees threatened to commit mass-suicide in protest of their working conditions.[106] One worker said the protest resulted from 600 workers being moved into a new "unbearable" factory location.[107] In September 2012, a fight at worker dormitories in Taiyuan, Shanxi, where a guard allegedly was beating a worker, escalated into a riot involving 2,000 people and was quelled by security.[108][109]

In October 2012, the company admitted that 14-year-old children had worked for a short time at a facility in Yantai, Shandong Province as part of an internship programme,[110] in violation of the 16 year age limit for legal workers.[110] Foxconn said that the workers had been brought in to help deal with a labour shortage, and Xinhua quoted an official saying that 56 underage interns would be returned to their schools. Reuters quoted Foxconn saying that 2.7 percent of its workforce in China were long or short-term interns. In response to the scrutiny, Foxconn said it would cut overtime from the current 20 hours per week to less than nine hours a week.[110]

Also in October 2012, there was a crisis concerning an injured worker, when 26-year-old Zhang Tingzhen[111] was electrocuted and fell in a factory accident[112] a year earlier. His doctors did immediate surgery to remove part of his brain,[113] "[after which] he lost his memory and can neither speak, walk".[114] When his father attempted to get compensation in 2012,[113] Reuters reported that Foxconn told the family that if they did not transport and submit him for a disability assessment in Huizhou 43 miles away, they would cut off funding for his treatment.[111] His doctors protested the move for fear of a brain haemorrhage en route,[114] and the company stated that it was acting within labour laws.[112][115] His family later sued Foxconn in 2012, arguing in court that Tingzhen had been summoned to the wrong city.[111] In 2014, a court ruled that he did have to be assessed in Huizhou to receive compensation, with Foxconn offering a settlement for the father to recant his criticisms, which was refused.[113]

In February 2015, Beijing News reported that an official with the All China Federation of Trade Union (ACFTU), Guo Jun, said that Foxconn allegedly forced employees to work overtime, resulting in occasional death by karoshi or suicide. Jun also said that the illegal overtime resulted from a lack of investigation and light punishments. Foxconn in return issued a statement questioning Guo's allegations, arguing workers wanted to work overtime to earn more money.[116]

In November 2017, the Financial Times reported that it had found several students working 11 hour days at the iPhone X plant in Henan province, in violation of the 40-hour-per week mandate for children. In response, Foxconn announced that it has stopped the interns' illegal overtime work at the factory, where 3,000 students had been hired that September.[117]

Suicides

Suicides among Foxconn workers have attracted the media's attention.[118] Among the first cases to attract attention in the press was the death of Sun Danyong, a 25-year-old man who committed suicide in July 2009 after reporting the loss of an iPhone 4[119] prototype in his possession.[120] According to The Telegraph, Sun Danyong had been beaten by security guards.[107]

There was also a series of suicides which were linked to low pay in 2010.[118] In reaction to a spate of worker suicides in which 14 people died in 2010,[98] Foxconn installed suicide-prevention netting at the base of buildings in some facilities[121] and promised to offer substantially higher wages at its Shenzhen production bases.[122] By 2011, workers were also forced to sign a legally binding document guaranteeing that neither they nor their descendants would sue the company as a result of unexpected death, self-injury, or suicide.[123] In 2011, Foxconn also hired the PR firm Burson-Marsteller to help deal with the negative publicity from the suicides. That year, the nets seemed to help lower the death rate, although at least four employees died by throwing themselves off buildings.[107]

In January 2012, there was a protest by workers about conditions in Wuhan, with 150 workers threatening to commit mass suicide if factory conditions were not improved.[107] Suicides of Foxconn workers continued into 2012, with one in June 2012.[118] In 2012 and into 2013, three young Foxconn employees were reported to have died by jumping off buildings.[107] In January 2018, another suicide was reported by a factory worker, after 31-year old Li Ming jumped to his death off a building in Zhengzhou, where the iPhone X was being manufactured.[107]

See also

References

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  104. ↑ For 2010 reports, see "Publications: 2010". Students and Scholars Against Corporate Misbehavior. Archived from the original on April 13, 2012. Retrieved June 24, 2012.
    • For 2011 reports, see "Publications: 2011". Students and Scholars Against Corporate Misbehavior. Archived from the original on November 7, 2012. Retrieved June 24, 2012.
    • For 2012 reports, see "Publications: 2012". Students and Scholars Against Corporate Misbehavior. Archived from the original on November 7, 2012. Retrieved June 24, 2012.
  105. ↑ For report relying on 100 worker informants, see "WORKERS AS MACHINES: MILITARY MANAGEMENT IN FOXCONN" (PDF). Students and Scholars Against Corporate Misbehavior. 13 Oct 2010. Retrieved June 24, 2012.
    • For report relying on 170 worker informants, see "FOXCONN AND APPLE FAIL TO FULFILL PROMISES: PREDICAMENTS OF WORKERS AFTER THE SUICIDES" (PDF). Students and Scholars Against Corporate Misbehavior. 6 May 2011. Retrieved June 24, 2012.
  106. ↑ "'Mass Suicide' Protest at Apple Manufacturer Foxconn Factory". The Daily Telegraph. 11 Jan 2012.
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  116. ↑ "Foxconn's long hours causing workers' deaths: Union", China Daily, Zhang Xiang, February 3, 2015
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  119. ↑ "Apple Confirms Death of iPhone Worker in China". CNET. 2009-07-21.
  120. ↑ "IPhone Maker in China Is Under Fire After a Suicide". The New York Times. 2009-07-26.
  121. ↑ Mail Foreign Service (2006-08-18). "The Stark Reality of iPod's Chinese Factories". Daily Mail. London. Retrieved 2011-05-27.
  122. ↑ "Foxconn To Raise Wages Again at China Plant". Reuters. 2010-10-01.
  123. ↑ Malone, Andrew; Jones, Richard (2010-12-06). "Revealed: Inside the Chinese Suicide Sweatshop Where Workers Toil in 34-Hour Shifts To Make Your iPod". Daily Mail. London. Retrieved 2011-10-07.

Further reading

  • Barboza, David (February 18, 2012). "Foxconn Plans to Lift Pay Sharply at Factories in China". The New York Times.
  • Duhigg, Charles & Barboza, David (January 25, 2012). "Human Costs Are Built Into an iPad". The New York Times.
  • Kristof, Nicholas D. & WuDunn, Sheryl (September 24, 2000). "Two Cheers for Sweatshops". The New York Times.
  • Weir, Bill (February 21, 2012). "iFactory: Inside Apple". Nightline. ABC TV.
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