Will Foxconn Labor Issues Have Manufacturers Considering China Exit?
Foxconn, the poster company of cheap Chinese manufacturing that supports the global consumer device market, shut down its Taiyuan plant today after about 2,000 workers were involved in a brawl. Although the root cause of this recent event is not yet entirely clear, the increasing amount of unrest and labor stoppages at Foxconn locations leads us to ask: will worker demands lead to an exodus from China of businesses seeking budget labor?
Signs of unrest amongst Chinese workers at Foxconn facilities have increased this year after a notorious period in 2011 when the company experienced a spate of suicides. The site in Taiyuan rocked by riots on Sunday night actually experienced labor disputes beginning back in late March 2012 with workers tasked to the iPhone 5 striking over pay. See a timeline of events below taking place prior to the the most recent riot in Taiyuan:
While Foxconn has expanded or invested in opening operations in Brazil, Russia, and Indonesia, it clearly also has plans to continue leveraging the workforce in China. However, the map below shows recent activity by the company suggesting its expansion is generally into new areas of the country where it can start fresh away from the labor issues plaguing its other facilities:
Questions to Consider
Can Foxconn escape its checkered past in China with its new facilities? Will labor issues at Foxconn spread to other manufacturing companies? Are these protests as well as the underlying factors (wage demands, change in hours, and other workers’ rights) enough to drive manufacturers away from China?
Leave your thoughts below.