Foxconn Plans US Factory Expansion

Foxconn Plans US Factory Expansion

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The Taiwanese manufacturer behind Apple's product line may open up shop in LA and Detroit.

Foxconn, the company best known for its worker suicide rate, is considering opening up new factories in Los Angeles and Detroit. Why? Because that darn expensive Chinese labor is just draining all the profits out of Foxconn's manufacturing. Foxconn wants to cut its costs, and thinks an American operation may be the way forward.

Foxconn chairman Terry Guo has already announced a training scheme for US-based engineers. The scheme will bring the engineers to Taiwan, or China, to get a first-hand look at Foxconn's manufacturing methods. One of the benefits of the scheme, according to Guo, is that it will give the engineers a crash-course in the Chinese language. Guo is in talks with MIT to get this done.

The US isn't Foxconn's only option. It already has eight factories in Brazil, and is putting $10 billion into Indonesia within the next five to ten years. However Guo has high hopes that his US protégés will return to America and set up facilities with automated equipment.

Foxconn's change of perspective has a lot to do with its recent troubles in China. Investigations and audits, provoked by the high suicide rate and an explosion at its Chengdu plant, have forced new safety standards and higher wages at Foxconn's Chinese factories. That expense doesn't sit well with Guo, and so Foxconn started looking abroad for other places to set up shop.

Source: Guardian

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It's pretty good PR, but I don't see them opening plants in LA. Maybe Detroit, or, more likely, the Southeast US, where Union is a 4 letter word.

Now we can get people in Mississippi a minimum wage job with no benefits who's too stupid to understand that not having to give half that pay to a health insurance company would help them out in the long run.

Time to invest in industrial strength netting.

Heh, I kinda love how this implies that LA and Detroit have worse labor laws than china at a glance.

Anyhoo, Unless they drastically change management or sort out fundamentals, I can see lots and lots of government interventions.

Well, I doubt they'd be able to get away with the same human rights violations here than in asia, simply because Americans are more comfortable bitching about horrible bosses. Still, thinking about the kind of sociopath who must be in charge of a company like that makes me uncomfortable.

EDIT: God damn double post.

Karloff:

Foxconn, the company best known for its worker suicide rate, is considering opening up new factories in Los Angeles and Detroit. Why? Because that darn expensive Chinese labor is just draining all the profits out of Foxconn's manufacturing. Foxconn wants to cut its costs, and thinks an American operation may be the way forward.

I love this tasty irony. How there's been a constant shift to push things to be done in eastern countries due to it being cheaper there, and now it's going to the west because it's cheaper.

Ruairi iliffe:
Heh, I kinda love how this implies that LA and Detroit have worse labor laws than china at a glance.

Anyhoo, Unless they drastically change management or sort out fundamentals, I can see lots and lots of government interventions.

As written Chinese labour laws are more generous than US ones, however they are not enforced and trying to have them enforced gets you arrested as an undesirable. The real reason is that Chinese wage inflation is very high due to the fact the supply of cheap labour from the provinces has largely dried up. Given that Chinese labour tends to have lower productivity than western counterparts, wage inflation has eaten away at the cost advantage of manufacturing in China. This is a general trend and Foxconn is just the latest example.

albino boo:
Given that Chinese labour tends to have lower productivity than western counterparts, wage inflation has eaten away at the cost advantage of manufacturing in China.

I have a feeling they also wouldn't be manufacturing things that are highly labor-intensive in the US and would use much higher levels of automation, kind of like everything else that's currently manufactured here. Many of the jobs that are involved are more highly skilled and pay better, but there are far fewer of them.

Aren't video game consoles made by them too? Why single out Apple instead when this is a video game site?

Steve the Pocket:
Aren't video game consoles made by them too? Why single out Apple instead when this is a video game site?

Because their biggest issues have been in the Apple production lines, so it's what they're most recognized for.

I'm... not sure how to feel about this.

The US needs jobs pretty desperately, & our manufacturing market isn't known for it's quality (or it's existence, for that matter). So this kinda feels like a good thing

The implication that China, the supposed sweatshop shangri la, sees the US as the place to outsource to is not a compliment for our labor laws or worker's rights.

Let's see how this goes

This makes me giggle.

I hope if Foxconn opens a plant here, they start producing Apple products here in the US.

Particularly because when Obama asked Steve Jobs how to bring the production jobs back to the US he said "Those jobs are never coming back here."

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It's an elaborate shceme to make US workers to kill themselves.

Or this could be extremely benefical to the economy.

Outsourcing to the USA. Aren't you proud.
I'm sure this article is at least somewhat misleading in its portrayal, but it still makes me grin in that slightly sad, slightly malevolent kind of way when you know you shouldn't laugh at others' misfortune but also know you just have to.

Karloff:
Why? Because that darn expensive Chinese labor is just draining all the profits out of Foxconn's manufacturing. Foxconn wants to cut its costs, and thinks an American operation may be the way forward.

uhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh

I think they're going to be annoyed by North American safety standards. VERY annoyed.

Wait...

China is outsourcing their jobs for "cheap" American labor. Is this bizarro world?

Really, not to say jobs in NA are bad but they really have nothing set in stone here. What with the US careening towards the "financial cliff".... coming this January to everywhere near you and beyond!
And we know that while fa/tg/uys "gets shit done". The US government falls flat on it's face when it comes to dealing with it's financial crisis'.
I'm really REALLY, hoping they're not gona go over, what with me joining the trades and all. Cause if America goes, Canada's in the passengers seat and were goin' with em.

Fix it Obama, you just got your second chance.

Also, lol at outsourcing to the US. Did i wake up in Bizzaro land?

well, what better way to get cheap labor than to completely destroy the domestic work environment

who needs slaves when you can strangle your lower classes until they agree to one sided terms

On the one side, America actually gets some work...

On the other side, the company is known for being terrible for workers, to the point where they kill themselves...

I'm so torn...

Steve the Pocket:
Aren't video game consoles made by them too? Why single out Apple instead when this is a video game site?

Apple was the only one that really said they would do anything about it, and the other companies like Nintendo, and Microsoft just reply "so"

lacktheknack:

Karloff:
Why? Because that darn expensive Chinese labor is just draining all the profits out of Foxconn's manufacturing. Foxconn wants to cut its costs, and thinks an American operation may be the way forward.

uhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh

I think they're going to be annoyed by North American safety standards. VERY annoyed.

it's never been a question the safety standards at the plants, but on the way employees have been treated: excessive quotas, wages, lack of overtime pay, charging exorbitantly for housing, and lack of time off. if you look at that list you will realize that besides housing you call them salary employees, and you can do similar, but the wages part would also be taken off if you call them salary.

Tiger Sora:
Really, not to say jobs in NA are bad but they really have nothing set in stone here. What with the US careening towards the "financial cliff".... coming this January to everywhere near you and beyond!
And we know that while fa/tg/uys "gets shit done". The US government falls flat on it's face when it comes to dealing with it's financial crisis'.
I'm really REALLY, hoping they're not gona go over, what with me joining the trades and all. Cause if America goes, Canada's in the passengers seat and were goin' with em.

Fix it Obama, you just got your second chance.

Also, lol at outsourcing to the US. Did i wake up in Bizzaro land?

Um this fiscal cliff you are talking about is only a cliff for some, but a bump for everyone else. the ending of tax breaks specifically for those making more then 200,000USD a year (increases revenue greatly), a 2% tax break for everyone else(increases revenue moderately), the expiration of spending increases to the military (lessens expense), and the lack of an agreed budget by the congress. this last part is the one that is the worst of it besides increasing taxes on those making less then 200,000USD annually. that is what they mean when they say fiscal cliff. also I don't see that drastic of an impact on the Canadian economy considering that it is considered stronger then the US economy.

and it's actually not that Bizzaro really if you look at the numbers between increasing Chinees wages, and couple that with the potential of major tariffs, and just standard shipping costs. either the cost of product for the consumer will become outragious (even compared to US goods), or the profit margins will become so narrow that the company couldn't remain solvent indefinitely

Skeleon:
Outsourcing to the USA. Aren't you proud.
I'm sure this article is at least somewhat misleading in its portrayal, but it still makes me grin in that slightly sad, slightly malevolent kind of way when you know you shouldn't laugh at others' misfortune but also know you just have to.

I believe the feeling you are trying to describe is Schadenfreude.

OP:...really? Well this will be interesting to say the least. Do they plan on using illegal immigrants or citizens for these jobs? I can say that I envy the poor guy that starts working for Foxconn.

Helmholtz Watson:
I believe the feeling you are trying to describe is Schadenfreude.

Eh, it's a part of it, but there's honest regret in it as well, which is not necessary for Schadenfreude.

Do they plan on using illegal immigrants or citizens for these jobs?

Maybe, although I'd find it very odd to base a corporate expansion on that. Or perhaos they are predicting what some economists already were predicting: That the emerging industrialized nations such as China will experience a large shift in worker conditions, pay and rights at some point in the near future. Meanwhile, worker protections in the USA aren't that good and there are sizeable forces trying to shrink them even more, so maybe they are simply waiting and preparing for the eventual tipping point when one overtakes the other in that regard.

Skeleon:

Maybe, although I'd find it very odd to base a corporate expansion on that. Or perhaos they are predicting what some economists already were predicting: That the emerging industrialized nations such as China will experience a large shift in worker conditions, pay and rights at some point in the near future. Meanwhile, worker protections in the USA aren't that good and there are sizeable forces trying to shrink them even more, so maybe they are simply waiting and preparing for the eventual tipping point when one overtakes the other in that regard.

Besides PR reasons for Apple I can't see why they would come to the US when there are still places like South-East Asia and South/Central America. I mean if Americans start killing themselves like they did in China, I don't imagine that would go over very well for Apple or Foxconn.

 

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