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Foxconn confirms plans to raise manufacturing prices

updated 11:10 am EDT, Thu October 14, 2010

'Most clients' already willing to pay

A Foxconn spokesperson has confirmed hints of plans to raise prices, according to Digitimes. The company is a major force in the electronics manufacturing industry, most notably as a partner in the production of Apple devices like the iPhone. Most clients have already agreed higher quotes, the spokesperson says, while some others are still in negotiations.

No specific names have been mentioned. Sources at phone makers say the price hikes are in response to higher labor and component costs, which Foxconn is hoping clients will be willing to compensate for. Clients such as Nokia, Motorola and Sony Ericsson may not be interested however, as they have multiple suppliers and their own manufacturing facilities.

Some industry sources claim that Foxconn rivals like BYD and Compal are taking advantage of the situation to grab more orders at lower rates. The Foxconn spokesperson denies any such threat, suggesting instead that most phone manufacturers are faced with the same growing expenses and therefore unlikely to risk dropping prices.

Foxconn's labor costs are connected to two recent salary increases. In the past the company has been accused of paying low wages for almost non-stop work, a situation that may have helped encourage a string of suicides. More recently it has denied allegations of abusive conditions. Some workers are, on top of this, said to be getting a fraction of their promised salary raises.






by MacNN Staff

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  1. prl99

    Joined: Dec 1969

    0

    BYD and Compal

    It's only a matter of time before these companies are investigated for poor working conditions and immorally low wages. Who knows. Maybe US labor costs will be reasonable enough to bring some of the production back. I doubt it but "foreign" car manufacturers are building more cars in the US than ever before because of lower costs (I presume shipping costs are the major costs being reduced). Foxconn got hit because of Apple but the others will also come under more scrutiny.

  1. boris_cleto

    Joined: Dec 1969

    +1

    Foreign Auto Makers

    Built assembly plants in the US because they were being threatened with higher tariffs. It marked the point that the US stopped being a manufacturing nation and became a nation of assemblers.

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