Part of the problem is that Foxconn margins place constraints on wage increases. Last year, Foxconn parent Hon Hai had an operating margin of 1.1 percent, according to data compiled by Bloomberg, while Apple’s operating margin for the fiscal year ended September 2011 was 31 percent. Continued issues at Foxconn may indicate that it is time for Apple to set aside a larger share of its profit to ensure Chinese laborers are paid adequately. In the meantime, Apple’s public image will suffer as the result of now more visible labor issues at Foxconn.
So what can APPL say to Foxconn now...One day nobody is going to do it for them.....1.1 % against 31%....Wowww...... Profit Margin Squeeze coming soon......THE BATTLE BEGAN!!!!