Foxconn Cuts Suicide Payouts, Looks to Replace Employees With Robots

Foxconn logoFoxconn seemed to be turning the corner in working conditions and corporate policy. It had raised employees' base wages and instituted additional performance based increases, as well. It even had retracted its contract letters to employees demanding they didn't kill themselves. Now the manufacturer -- which services Apple, Sony, Microsoft, and a host of other companies -- is turning to some controversial new changes.

First of all, at its annual shareholder meeting yesterday, Terry Gou, CEO of Taiwan's Hon Hai Precision Industry (owners of the Chinese Foxconn unit) blamed news agencies and company payouts for the rash of suicides. He first read a letter from one of the employees who killed himself, which stated:

...now I'm going to jump off Foxconn, really leaving now, but you don't have to be sad, because Foxconn will pay a bit of money, this is all your son can repay you now.

He also stated that 6 of the 12 suicides, which occurred in May after the story received international attention, may have triggered a "Werther Effect" -- people reading about the story and deciding to kill themselves. As a result, Gou is handing control over "welfare management work" to the Chinese local government, which may chose to block internet coverage for the events.

He also announced that Foxconn will no longer pay the families of employees who kill themselves. Recently a worker died, apparently from exhaustion from working long hours and Foxconn refused to pay his family, as well. The new policy, though, ends suicide payouts that could total as much as 10 years worth of salary.

Foxconn has also started to flee China, where it currently employs over 800,000 people. In the shareholders meeting it said that the rise in wages from ¥900 ($132) to ¥1,200 ($176), and for top performers up to ¥2,000 ($293), is compelling it to move to countries with cheaper labor or seek alternative options.

It says that it may replace employees with robots, building a fully automated assembly line in Taiwan. This suggestion is somewhat ironic, given recent Foxconn factory workers' complaints that they felt like "robots" when performing their duties.

Chairman Samuel Chen says that the company may also shift employees and orders to its Vietnam plant, where labor is cheaper. Chen says that Foxconn is working with the companies that contract it to make these moves as smooth as possible.

Source: DailyTech

Tags: Foxconn

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