FOXCONN ANALYSIS
A startling 17 young workers attempted or committed suicide at the Foxconn production facilities in China between January and August 2010 attracted worldwide attention. This article looks at the historical development of Foxconn Technology Group as a case to reveal the advent of rapid capital expansion in China and its impacts on Chinese workers’ lives. It also provides an account on the social and political origins of the advent of monopoly capital in China through a detailed study of Foxconn production expansion. As a legend of capital expansion in manufacturing industry, Foxconn is important and typical of its speed and its scale in the process of capital accumulation on all regions of China. We attempt to look at this miracle of capital by understanding the enigma of global capital, the nature of the transformative state, and the Chinese growth model that results in rapid capital expansion but precarious working conditions of workers. At stake, we argue that under the global competition context a strong political regime with a divided nature and the making of an unfinished working class contributed to the advent of monopoly capital and the tragedy of working lives. The third stage is the advent of monopoly of capital by merging as well as by relocating their production facilities in all regions of China by particularly tapping into China’s go-west development strategy in the 2000s. The suicide wave in 2010 created a strategic moment when it further expanded and relocated into big cities in the North, Central, and West. Foxconn projected a huge workforce of 1,300,000 people in China alone by the end of 2011.13 By merging and acquiring small or medium electronic plants, and by rationalizing its internal production chains (from raw material extractions, parts and components procurement, to final assembly of products), Foxconn was able to compete down its rivals to secure production orders from brands and retailers. Foxconn is a telling example of the global just-in-time production and seasonal change of electronics fashion which results in a specific management model or factory regime that affects the lives of workers. Under the pressure of global competition on just-in-time production and technology upgrading in electronic industry, the enigma of Foxconn is to control expenses and reduce product time-to-market aggressively. Foxconn churns out a wide array of low-end to technologically sophisticated products for top brands. The Group's principal activities are manufacturing, processing and selling computer, communications and consumer electronic (3C) products. Products include computer terminal, computer, electronic calculator and peripheral equipment, as well as thermal modules and consumer electronic products. Operations are carried out in Taiwan and other countries. The Group exports its products to Asia, the United States of America, Europe and other countries.
Foxconn Business Philosophy Since 1974, Foxconn had always been guided by three Foxconn visions; * Through the most efficient "Total Cost Advantages" to make comfort of electronic products usage an attainable reality for all mankind; * Through the proprietary one-stop shopping vertical integrated eCMMSmodel to revolutionize the conventional inefficient electronics outsourcingmodel; * Through the devotion to greater social harmony and higher ethicalstandards to achieve a win-win model for all stakeholders includingshareholders, employees, community and management.
The Foxconn tragedy has been dubbed the “suicide express” by Chinese and international media. In the first eight months of 2010, a startling 17 young workers attempted or committed suicide at the Foxconn production facilities in China, bringing a worldwide attention to all Foxconn’s customers. 13 died, while four survived their injuries. All were between 17 and 25 years old—in the prime of youth —and their loss called upon the concerned academics to closely study the changing pattern of global capital accumulation and its impacts on workers. Foxconn is a microcosm of the conditions that dominate the lives of Chinese migrant workers.
When Time magazine nominated workers in China as the runners-up to 2009 Person of the Year,2 the editor commented that Chinese workers have brightened the future of humanity by “leading the world to economic recovery.” The new generation of Chinese migrant workers, however, seems to perceive themselves as losing their futures. More than 900,000 young workers, who have been placed in the “best” Foxconn factory-cum-dormitory environment, seemed only to show more anxieties, and see fewer alternatives, than their peers.Foxconn said the protest had involved about 150 of the 32,000 employees at its campus in the city of Wuhan. It was the latest incident in a long-running series of labor troubles at the company, which supplies popular goods like theApple iPhone, the Amazon Kindle and the Microsoft Xbox.In 2010, there was a wave of suicides by distraught workers at several of Foxconn’s Chinese sites. The company, which is controlled by Hon Hai Hai Precision Industry of Taiwan, has been accused of forcing workers to endure long hours and harsh working conditions for little pay.Under pressure from Apple and other major brands, Foxconn has pledged to improve working conditions in China,and the company has hired psychiatrists to counsel workers.The company has also begun a huge program to invest in robots and to move some of its production to the central and western parts of China, where labor is less costly and more abundant.
The company says the new locations also allow migrant workers to live closer to their hometowns. But while working conditions at Foxconn and other exporters in China may be slowly improving, the demands of workers seem to be rising more rapidly. There has been a rash of strikes and labor protests across the country in recent months, partly in response to inflation and a greater awareness of the labor laws. The strikes, which sometimes involve thousands of workers, often include demands for higher pay, insurance and better working conditions. In Wuhan, some of the workers who protested said they were angry about being forced to move from Foxconn’s biggest campus, in the southern Chinese city of Shenzhen, to Wuhan. One worker who participated in the Wuhan protest said by telephone that employees shifted to Wuhan had been promised about $450 a month in salary, including overtime pay, but that they had been given about a third less than that and that working conditions in Wuhan were much more difficult.
The worker, who asked not to be identified for fear of being punished by Foxconn, said more than 100 workers haddecided to protest on the roof of a three-story building on the campus. There are three stages of Foxconn development and evolution into an industrial oligarch. The first stage is to step onto the mainland China when the country adopted the open-door policy and the coastal development strategy. Driven by the Chinese state’s favorable investment policy, in 1988 Hon Hai set up its first production facility named Foxconn in the Special Economic Zone of Shenzhen, the first economic export processing zone built by the central government in 1980. In the early stage of production, the middle- and high-ranked management was solely controlled by Taiwanese employees, who had little trust with mainland Chinese elites or workers.
The military corporate culture and management methodology was notorious.12
Benefiting by the inexpensive and massive supply of labor in China, Foxconn, in its second stage of rapid expansion during the 1990s, witnessed a growing division of labor, diversification of production lines, and an introduction of Chinese elites to work at the low level of management. There was a higher level of infusion between
Taiwanese and Chinese management, despite little trust on Chinese managers and workers persisted. Of production bases growing into giant size and gaining its reputation in the industry, Foxconn remained concentration in two regions: the Pearl
River Delta and the Yangtze River Delta where local governments provided it with huge piece of land, good transportation systems, and other key infrastructures.