Foxconn raises wages for Chinese employees by 16-25%


CNA

TAIPEI–Foxconn Technology Group, the world’s largest contract electronics maker, has raised wages for its Chinese workers by a range between 16 and 25 percent, taking effect retroactively from Feb. 1.

It was the third salary hike since 2010 by Foxconn, which churns out iPhones and iPads for Apple through its broad global production base, particularly in China.

Foxconn currently operates four manufacturing complexes in China, including a coastal compound in Shenzhen, and employs more than one million workers.

In the Shenzhen plant, which has been the initial production location for Foxconn since 1988, the basic wage will be raised to no less than 2,200 Chinese yuan (NT$11,000) a month from 1,800 Chinese yuan.

Before the series of wage hikes, the basic salary in the Shenzhen complex stood at 900 Chinese yuan from three years ago.

Foxconn said in a statement Friday that the group, aiming to become a first-tier manufacturer in China, is determined to upgrade production technology and improve efficiency and performance, while vowing to offer satisfactory compensation for employees.

In fact, Foxconn said, the basic wages in its production lines in China are well above the minimum wages required by local Chinese governments.

The group said it will continue to provide its Chinese employees with training courses and learning chances to polish their skills.

Foxconn, which has been criticized for running “blood and sweat” plants in China, is under an audit by the U.S.-based Fair Labor Association concerning all aspects of working and living conditions, such as wages, health and safety.

The audit was requested by Apple, which said its suppliers, including Foxconn, will cooperate with the inspectors.

The U.S. consumer electronics giant launched the initiative in response to recent concerns over labor practices and reported abuses in the Chinese factories of its suppliers.

Foxconn started the series of wage hikes after a spate of worker suicides occurred at its China complexes in 2010. Last year, an explosion happened at its Chengdu plant, killing three workers.

To cut rising operating costs in coastal Shenzhen, Foxconn has relocated its production lines to inland Chinese cities.

Grand Cathay Securities said the relocation efforts are expected to boost the gross margin of Hon Hai Precision Industry Co., which is the flagship company of Foxconn and listed on the Taiwan Stock Exchange.

The brokerage said Hon Hai Precision’s earnings per share could rise to NT$9.5-NT$10 this year from an estimated NT$7.1-NT$7.2 last year.