updated 11:10 pm EDT, Sun June 6, 2010
Foxconn 66pc pay hike comes after earlier raise
Foxconn today promised still another raise to its factory workers to head off continued suicides at the company. The Chinese firm will pay 66 percent more to workers on top of the earlier 30 percent raise depending on their performance. Those that pass a three-month evaluation will get the improved pay, which chairman Terry Gou acknowledged was directly related to the conditions of workers.
"This wage increase has been instituted to safeguard the dignity of workers, accelerate economic transformation, support Foxconn's long-term objective of continued evolution from a manufacturing leader to a technology leader, and to rally and sustain the best of our workforce," he said.
The increase takes effect as soon as October 1 for regular workers in the Shenzhen area. Other Chinese plants will have their details on July 1, and supervisors will find out how their pay is affected on August 1.
Foxconn's rate hike won't necessarily address questions of overwork that may have contributed to the death of one worker last month or as a possible factor underlying the suicides. The company nonetheless said during the pay raise that it would reduce working hours by making overtime less essential for some employees. Productivity may also be helped as employees are less likely to quit prematurely and thus get more experience with fewer accidents.
The increases may translate to price increases on devices but may be key to curbing a public relations disaster for Foxconn. It supplies much of the electronics industry and has been under intense scrutiny with Apple, Dell, HP, Nintendo and others formally investigating working conditions. Apple CEO Steve Jobs has defended some practices but made it clear that conditions triggering suicides weren't acceptable.