2317.TW - Hon Hai Precision Industry Co., Ltd.
| Previous Close | 74.70 |
| Open | 75.40 |
| Bid | 75.00 x 0 |
| Ask | 75.10 x 0 |
| Day's Range | 74.70 - 75.40 |
| 52 Week Range | 67.00 - 97.20 |
| Volume | 35,215,000 |
| Avg. Volume | 28,430,573 |
| Market Cap | 1.042T |
| Beta (3Y Monthly) | 1.99 |
| PE Ratio (TTM) | 9.80 |
| EPS (TTM) | 7.66 |
| Earnings Date | Aug 13, 2019 - Aug 17, 2019 |
| Forward Dividend & Yield | 4.00 (5.35%) |
| Ex-Dividend Date | 2019-07-25 |
| 1y Target Est | 88.95 |
- Reuters
Sales at Taiwan's Apple supplier Hon Hai flat in September
Sales at Hon Hai Precision Industry, known by its trade name Foxconn and as a key supplier of Apple Inc's products, rose by 0.5% rise in September. The world's largest contract electronics manufacturer reported revenues of T$587.79 billion ($19 billion) in September, up from T$584.93 billion from a year earlier, it said in a filing to the Taiwan stock exchange. Taipei-based Foxconn, which manufactures the bulk of Apple's iPhones in China for sale in the United States, faces challenging quarters ahead as Washington plans to impose additional tariffs on Chinese imports, including smartphones.
- Bloomberg
Foxconn Billionaire Terry Gou Drops Taiwan Presidential Bid
(Bloomberg) -- Terry Gou, the billionaire founder of Foxconn Technology Group, pulled out of next year’s presidential election in Taiwan, a move that may help unite the opposition Kuomintang party.Gou apologized to his supporters in a statement on Facebook Tuesday outlining his decision to withdraw from the race as an independent. After he quit the KMT last week, he had come under pressure from opposition leaders, including former President Ma Ying-jeou, to drop out of the race and support their nominee to help return the China-friendly party to power.“With this poor election climate and prevailing populism, I’m not willing to participate in this political farce, not only for my own personal and factional interests, but also because class struggle is tearing Taiwan apart,” Gou said in a video released Tuesday.Gou could still run as a candidate for one of Taiwan’s established political parties.Shares in companies controlled by Gou slumped Tuesday. FIH Mobile Ltd. was the worst performer on Hong Kong’s Hang Seng Composite Index, tumbling as much as 23.2%. His flagship Hon Hai Precision Industry Co. fell 2% in Taipei.Gou had been widely expected to run for the presidency after publicly flirting with the idea since losing the KMT primary to Kaohsiung Mayor Han Kuo-yu in July. Gou’s candidacy threatened to sap support for Han who will challenge President Tsai Ing-wen in the Jan. 11 election.Gou trailed the two candidates from the main parties by at least seven percentage points, according to a survey released by TVBS last week. In a two-way race, Tsai leads with 49% of support, compared with 42% for Han.What had been shaping up as Taiwan’s most competitive presidential election in decades could end up being essentially a straight fight between Tsai and Han. Another prospective independent candidate, Taipei City Mayor Ko Wen-je, said he had no intention of running for president, according to a report by TV news channel TVBS on Tuesday. Still, Tsai could face increased competition for voters who favor a stronger push for the island’s formal independence. Former Vice President Annette Lu announced her intention to run as an independent. Lu served as vice president under Chen Shui-bian between 2000 and 2008.(An earlier version of this story was corrected to fix spelling of Hon Hai Precision Industry Co. in fifth paragraph)\--With assistance from Tony Jordan.To contact the reporter on this story: Debby Wu in Taipei at dwu278@bloomberg.netTo contact the editors responsible for this story: Daniel Ten Kate at dtenkate@bloomberg.net, Samson Ellis, Karen LeighFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Foxconn Billionaire Clears Path for Taiwan Presidential Run
(Bloomberg) -- Terry Gou, the billionaire founder of iPhone assembler Foxconn Technology Group, threatened to throw Taiwan’s presidential race into turmoil as he took a key step toward running as an independent.Gou withdrew Thursday from the opposition Kuomintang, a necessary precursor to mounting a third-party challenge against President Tsai Ing-wen. The move came despite a last-minute plea from senior KMT leaders including Tsai’s predecessor, Ma Ying-jeou, for Gou to back their nominee and help return the China-friendly party to power. Gou has until Tuesday to apply to run in the Jan. 11 election.“I know I’m doing the right thing, something major that will turn around Taiwan’s destiny,” Gou said in a statement. Gou’s candidacy would shake-up Taiwan’s political landscape, undercut KMT challenger Han Kuo-yu’s effort to unseat Tsai and potentially weaken both dominant parties. A three-way race could be a hard-fought affair, with Tsai leading with 33.7% of support, compared with 28.9% for Han and 25.6% for Gou, according to a survey released Tuesday by the Apple Daily newspaper.Since both Gou and Han support closer ties with China -- always Taiwan’s most contentious wedge issue -- the Foxconn founder could complicate the KMT’s bid to oust Tsai and her pro-independence Democratic Progressive Party. Tsai has been dogged by an increasingly assertive Beijing, which has been angered by her refusal to accept the Communist Party’s bottom line that both sides belong to “one China.”“The KMT will be substantially impacted by Gou’s declaration to run,” said Stephen Tan, president of the Taipei-based Cross-Strait Policy Association. “Although Gou will run as an independent, his constituents have been mainly the ‘blue’ voters and the moderates whom KMT is working hard to seek for support.”Taiwan’s Tsai Rises From Ashes With a Hand From Hong KongGou has continued to publicly flirt with the idea of a presidential bid despite losing the KMT primary to Han in July. The firebrand Kaohsiung mayor has become one the island’s best-known -- and most divisive -- political leaders since his surprise win in the DPP’s southern stronghold in November.Han said he regretted Gou’s move to withdraw from the KMT. Ma, the former president, and KMT Chairman Wu Den-yih were among several senior opposition figures who published advertisements in newspapers earlier Thursday urging Gou to support their nominee.Gou built Foxconn from a maker of television knobs into a global powerhouse that is now Apple’s biggest supplier and China’s largest private employer. He also has ties to President Donald Trump, meeting the U.S. leader at the White House in May, weeks before stepping down as chairman of Hon Hai Precision Industry Co., Foxconn’s main listed arm.Shares in companies Gou controls rose after he quit the party Thursday, with FIH Mobile Ltd. surging more than 15% in Hong Kong and the group flagship Hon Hai rising 2% in Taipei.Hong Kong Immigration to Taiwan Surges as Protests Grind OnGou has been sending signals that he might mount an independent run for weeks, although he’ll still need to collect around 280,000 signatures to get on the ballot. After assembling a campaign team, he confirmed last month that he was considering breaking from the KMT for a stand-alone bid.“This conservative, hidebound party leadership is putting their own interests ahead of their party’s and the party’s interests ahead of the nation’s,” Gou’s spokesman, Evelyn Tsai, told reporters Thursday. “Mr. Gou won’t miss this party.”(Updates with Gou quote in third paragraph.)\--With assistance from Adela Lin.To contact the reporter on this story: Samson Ellis in Taipei at sellis29@bloomberg.netTo contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, ;John Liu at jliu42@bloomberg.net, Karen LeighFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Foxconn’s Gou Takes Step Toward Possible Taiwan Presidency Bid
(Bloomberg) -- Aides to Foxconn founder Terry Gou visited Taiwan’s top election agency about the paperwork needed to wage an independent campaign for president, in the latest sign the billionaire is inching toward a run.Gou spokeswoman Evelyn Tsai told reporters during a visit Tuesday to the Central Election Commission in Taipei that she was inquiring about petition procedures. While she said Gou has yet to make up his mind, independent candidates must apply for petitions by Sept. 17 for a chance to compete in the January election.“The campaign office is doing preparation, with final decision to be made by Gou,” Tsai said. She was accompanied by a top political consultant to Taipei Mayor Ko Wen-je, who was expected to back any Gou run.Speculation that Gou might mount an independent bid to unseat incumbent President Tsai Ing-wen has swirled since he lost a primary to run the opposition Kuomintang line to Kaohsiung Mayor Han Kuo-yu. A three-way race would inject new uncertainty into what was shaping up to be a showdown between contrasting visions of ties with China.The polls show that a three-way election could be tight. The latest weekly tracking survey released Tuesday by the Apple Daily newspaper showed Tsai leading with 33.7%, compared with 28.9% for Han and 25.6% for Gou.Gou, who in June quit as chairman of Hon Hai Precision Industry Co., Foxconn’s main listed arm, built the company from a maker of television knobs into a global powerhouse that is now Apple’s biggest supplier and China’s largest private employer. Gou also has ties to President Donald Trump, meeting the U.S. leader at the White House in May.\--With assistance from Adela Lin and Debby Wu.To contact the reporters on this story: Miaojung Lin in Taipei at mlin179@bloomberg.net;Samson Ellis in Taipei at sellis29@bloomberg.netTo contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Market Realist
Apple Eyeing Foxconn’s Labor Violations for iPhone 11
China Labor Watch released a detailed report about the conditions at Foxconn’s manufacturing facilities. Foxconn is a major supply chain partner for Apple.
- Benzinga
Watchdog Group Alleges Labor Violations In iPhone Manufacturing; Apple Says Report Mostly False
New York City-based CLW said in a report over the weekend that it has evidence the upcoming iPhone 11 is being illegally produced at Foxconn facilities in China. The watchdog group said the percentage of dispatch or temporary workers at Foxconn facilities make up more than 50% of the entire workforce. "Apple and Foxconn know that the issue with dispatch workers is in violation of labor laws, but because it is profitable to hire dispatch workers, they haven't addressed the issue.
- TheStreet.com
[video]Is Apple Exploiting Chinese Workers?
Apple and its manufacturing partner Foxconn have been called out -- again -- for taking advantage of factory workers in China.
- MarketWatch
Apple let Chinese suppliers break labor laws to produce new iPhone, says report
China Labor Watch (CLW), a non-profit organization aimed at advocating for Chinese workers, released a damning report about the use of temporary workers at Apple supplier Foxconn.
- TheStreet.com
[video]Apple Denies Allegations of Chinese Labor Law Violations
Apple denies most of the accusations leveled against it and manufacturer Foxconn regarding its Chinese operations and how they treat workers who assemble its iPhones.
- Reuters
Apple, Foxconn say they overly relied on temporary workers in China
Apple Inc and manufacturing partner Foxconn Technology Co Ltd on Monday rebutted allegations of lapses in people management levelled by a non-profit monitor of worker rights, though confirmed they employed too many temporary workers. The response comes after China Labor Watch on Monday issued a lengthy report accusing the two companies of breaching numerous Chinese labour laws, including one barring temporary staff from exceeding 10% of the total workforce. U.S. tech firm Apple relies heavily on Taiwan's Foxconn and its Chinese manufacturing facilities to produce devices such as the iPhone, the next line of which will be unveiled on Tuesday.
- Bloomberg
Apple, Foxconn Broke a Chinese Labor Law to Build Latest iPhones
(Bloomberg) -- Apple Inc. and manufacturing partner Foxconn violated a Chinese labor rule by using too many temporary staff in the world’s largest iPhone factory, the companies confirmed following a report that also alleged harsh working conditions.The claims came from China Labor Watch, which issued the report ahead of an Apple event on Tuesday to announce new iPhones. The non-profit advocacy group investigates conditions in Chinese factories, and says it has uncovered other alleged labor rights violations by Apple partners in the past.For its latest report, CLW said undercover investigators worked in Foxconn’s Zhengzhou plant in China, including one who was employed there for four years. One of the main findings: Temporary staff, known as dispatch workers, made up about 50% the workforce in August. Chinese labor law stipulates a maximum of 10%, CLW noted.Apple said that, after conducting an investigation, it found the “percentage of dispatch workers exceeded our standards” and that it is “working closely with Foxconn to resolve this issue.” It added that when it finds issues, it works with suppliers to “take immediate corrective action.” Foxconn Technology Group also confirmed the dispatch worker violation following an operational review.Apple’s supply chain has faced criticism over poor labor standards for years, and the company has pushed manufacturing partners to improve factory conditions or risk losing business. However, suppliers and assemblers are always trying to churn out more handsets. Foxconn, officially known as Hon Hai Precision Industry Co., hires tens of thousands of temporary workers to ramp up production and meet iPhone demand during the key holiday season each year.“Our recent findings on working conditions at Zhengzhou Foxconn highlights several issues which are in violation of Apple’s own code of conduct,” CLW wrote in its report. “Apple has the responsibility and capacity to make fundamental improvements to the working conditions along its supply chain, however, Apple is now transferring costs from the trade war through their suppliers to workers and profiting from the exploitation of Chinese workers.”CLW was founded in 2000 as a 501(c)(3) organization to investigate Chinese factories that make toys, shoes, electronics and other products for some of the world’s largest multinational companies. It has an office in New York City and one in Shenzhen that offers a hotline for factory workers in China, according to its website.While its report said 55% of factory staff were dispatch workers in 2018, and about 50% in August, this included student interns. Because many of these students returned to school at the end of August, that number is now closer to 30%, which is still a violation, according to CLW.“We believe everyone in our supply chain should be treated with dignity and respect,” Apple also said in a statement. “To make sure our high standards are being adhered to, we have robust management systems in place beginning with training on workplace rights, on-site worker interviews, anonymous grievance channels and ongoing audits.”Foxconn said it found “evidence that the use of dispatch workers and the number of hours of overtime work carried out by employees, which we have confirmed was always voluntary, was not consistent with company guidelines.”It added that its “work to address the issues identified in our Zhengzhou facility continues and we will closely monitor the situation. We will not hesitate to take any additional steps that might be required to meet the high standards we set for our operations.”Apple releases an annual supplier responsibility report that details working conditions in its supply chain. In its latest report, Apple said it conducted 44,000 interviews with supplier employees last year to check if they were properly trained and knew how to voice concerns, while taking new steps to prevent forced labor.In late 2017, Apple found Foxconn had employed high school students who worked illegal overtime to assemble the iPhone X. Apple sent specialists to the facility to work with management on systems that ensured appropriate standards were followed.Foxconn is the largest of a coterie of gadget assemblers that produce most of the world’s consumer electronics from sprawling Chinese bases. Typically operating on wafer-thin margins, they employ millions of mostly migrant and temporary workers because activity tends to wax and wane with shopping seasons and fluctuations in demand.Dispatch workers don’t receive benefits that full-time employees get, such as paid sick leave, paid vacations and social insurance, which provides medical, unemployment and pension coverage, according to CLW. While base wages can be higher for dispatch workers, they are paid by third-party firms on a short-term basis and are not employed directly by Foxconn, CLW says. Dispatch workers can become official factory workers after an initial three-month period, according to the group’s report.Last month, Foxconn said it fired two executives at one of its Chinese plants after another CLW investigation found the company was relying heavily on temporary workers and teenage interns to assemble Amazon.com Inc. Echo speakers. Foxconn reviewed the Hengyang facility and found the proportion of contract workers and student interns had on occasion exceeded legal thresholds, and that some interns had been allowed to work overtime or nights.The group, which also monitors conditions in myriad industries from apparel to retail, has run reports in the past on suppliers to the likes of Nike Inc. and Adidas AG and, recently, probed a factory that manufactured Ivanka Trump-branded shoes.Apple and Foxconn seek to produce about 12,000 iPhones per shift at the Zhengzhou factory, CLW’s latest report found. Last year’s iPhone XS models were more complex to build than the iPhone X, requiring more workers, the group also said.According to emails seen by Bloomberg, Apple told CLW in August that it was looking into the findings and had questions about the report. The company sent an investigator to the factory and met with Foxconn officials to discuss the heavy use of dispatch workers, but Apple and Foxconn are still allowing the activity despite violating the 10% standard, CLW said.The CLW report also detailed other findings, such as:During peak production periods, resignations are not approved.Some dispatch workers have not received promised bonuses.Student workers do overtime during peak production season, even though regulations on student internships prohibit this.Some workers put in at least 100 overtime hours each month, during busy production periods. Chinese labor law limits monthly overtime to 36 hours.Workers must get approval to not do overtime. If requests are denied and staff still choose not to work overtime, they are admonished by managers and miss out on future overtime opportunities.Workers sometimes have to stay at the factory for unpaid meetings at night.The factory doesn’t provide adequate protective equipment for staff.Work injuries are not reported by the factory, and verbal abuse is common there.While overtime is allegedly often required, most workers want to work overtime to make more money, according to an anonymous diary written by a CLW investigator in the factory.“We looked into the claims by China Labor Watch and most of the allegations are false,” Apple said. “We have confirmed all workers are being compensated appropriately, including any overtime wages and bonuses, all overtime work was voluntary and there was no evidence of forced labor.”Apple added that less than 1% of workers were student workers, and that a small percentage of them voluntarily worked overtime or night shifts. Apple and Foxconn both said this issue has been corrected.Most factory workers are paid about 4,000 yuan ($562) a month, one CLW investigator found. After taxes and mandatory fees, they get roughly 3,000 yuan a month, according to the CLW report.China’s per capita disposable income was 28,228 yuan in 2018, or 2,352 yuan a month, China Daily reported earlier this year, citing government data.(Updates with detail on the group from the 7th paragraph)\--With assistance from Debby Wu.To contact the reporter on this story: Mark Gurman in San Francisco at mgurman1@bloomberg.netTo contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net, Alistair Barr, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Army of Women Earning $4 a Day Could Be Behind Your Next iPhone
(Bloomberg) -- On a steamy summer morning, dozens of buses pull up outside a cluster of low-slung, blue buildings in the south Indian state of Andhra Pradesh. Women dressed in colorful salwar kameezes disembark, their dupatta body scarves billowing as they make their way past hibiscus bushes and posters proclaiming, “Our aim, no accident.”The night shift at Foxconn Technology Group’s mobile phone plant in Sri City is ending, and thousands of young women are punching out as others stream in to replace them. One of the arrivals is Jennifer Jayadas, a tall, slim 21-year-old who lives several miles away in a two-room hut with no running water.After gobbling down a free breakfast of chapatti flatbreads with a potato-and-pea curry, she dons a checked white hat, apron-shirt, static-resistant footwear and tiny finger gloves. Then Jayadas takes her place at a testing station where she will spend the next eight hours making sure the volume, vibration and other phone features work properly. “Smartphones used to be all made in China,” she says. “Now, we make them here.” Foxconn, also known as Hon Hai Precision Industry Co., opened its first India factory four years ago. It now operates two assembly plants, with plans to expand those and open two more. India has become an important manufacturing base as the Taipei-based company looks to diversify its operations beyond ChinaSucceeding in India has become all the more urgent since U.S. President Donald Trump launched a trade war last year and announced tariffs on thousands of products manufactured in China, including the gadgetry Foxconn makes for Apple Inc., Amazon.com Inc. and others.In late August, Trump ratcheted up the rhetoric—ordering American companies to start pulling out of China and citing a national security law as justification. He backed off two days later, but many companies have resigned themselves to an inevitable and costly rethinking of their global supply chains. “It’s a good business principle not to put all your eggs in a single basket,” says Josh Foulger, who runs Foxconn’s India operations. “We have to find viable and reliable alternatives. Obviously the alternative location has to be competitive. We can’t put a factory in Mexico for manufacturing mobiles. It might have worked 10 years ago, it just won't work today.”Foulger, 48, grew up in Chennai and attended the University of Texas in Arlington, before returning to India in the mid-aughts to set up manufacturing for Nokia. He joined Foxconn four years ago to help founder Terry Gou establish assembly plants in India, now the world’s fastest-growing smartphone market.Foxconn’s first India facility started in 2015 in Sri City, a special economic zone where goods can be imported and exported with limited red tape and foreign companies make everything from diapers to train carriages. Foxconn’s plant employs almost 15,000 workers—about 90% of them women—and assembles phones for various manufacturers, including local best-seller Xiaomi. In recent months, workers began testing and assembling Apple’s iPhone X, which will be sold in India first and eventually exported.A second mobile phone factory opened in 2017 in Sriperumbudur, about two hours by road from the first facility. It employs 12,000 and is partially automated. “By 2023,” Foulger says, “both factories will be much larger and we’ll add two more locations.”Foxconn currently ships parts in from China, but hopes one day to manufacture displays and printed circuit boards locally. Foulger is angling to capture a third of the domestic smartphone market and 10% of the global one (up from a 2.5% share today). Eventually, he plans to add other products, including Amazon Echo speakers, to the mix. “Until now, India has made for India,” he says. “Soon India will make for the world.” Seated in an office overlooking the hubbub of the Sriperumbudur plant, the strapping, bearded executive ticks off India’s pluses: labor costs that are half that of China’s, a vast pool of workers including talented engineers, a government eager to help.They have a staunch partner in Prime Minister Narendra Modi who is under pressure to bring down a jobless rate that currently exceeds 6%. His government’s four-year-old “Make in India” policy seeks to turn the country into a manufacturing power by offering incentives to foreign companies to open factories. “The plan is to expand India’s $25 billion phone manufacturing to $400 billion by 2024,” says Pankaj Mahindroo, who heads the Indian Cellular & Electronics Assn. “A substantial portion of it will be for the export market.”There’s a long way to go: A mere 700,000 electronics manufacturing jobs have been created since Make in India started, according to Mahindroo’s industry group. Skilled workers such as industrial designers are in short supply, and there isn’t yet much of a supplier network providing crucial components such as batteries, semiconductors and processors. “India is not there yet,” says Anshul Gupta, a senior research director at Gartner India. “But things are beginning to fall in place. India can bolster its manufacturing capacity and help the world cut its reliance on China.” Foxconn was integral to China’s transformation into a manufacturing colossus, and Gou has told Modi that Foxconn could help India do the same. But it took China 30 years to get there. “China’s advantage was its massive labor pool that could produce quite cheaply, and they built on that by investing heavily in logistics and transportation,” says Andrew Polk, a founding partner with Trivium China, a Beijing-based research firm. “Even as their labor pool advantage is dissipating, they have invested in processes and systems so they can produce efficiently at scale and get the goods to the market.”Catching up will require the Indian government and private sector to invest heavily in roads, rails, ports and other infrastructure. “When China did it, global supply chains were fragmented and there wasn’t another China,” Polk says. “India will not only have to get it right but they have to get it right in a way to better China, and trade wars can only help at the margins." China also had the benefit of being able to grow without worrying too much about the environmental impact. With concern about climate change growing, “that’s not going to fly these days,” he says.As a two-decade veteran of supply chains in India and elsewhere, Foulger is painfully aware of the challenges. “I can twirl my mustache and say, ‘India can replicate China,’” he says. “The reality is that we have shortcomings.” While the state government provided land, water and power connections for the Sriperumbudur facility, Foxconn, Dell, Flextronics and other companies banded together to build the industrial park for their factories. Even so, Foulger still needs to ferry in water for his thousands of workers because Chennai city and nearby areas have a severe water shortage. Foulger decided early on to recruit mostly women. Female factory workers are commonplace in China, but unusual in India, where rural women are typically consigned to unpaid household or farm work. Women in this region weren’t even allowed to work at night in factories until the local government and the courts intervened four years ago.It was Foulger’s mother who planted the idea and persuaded him to give women the opportunity. A teacher whose students often hailed from underprivileged backgrounds, she told him girls are curious, hard working and committed but family circumstances prevent them from going to college. Many are forced to start work early or are pushed into marriage and child rearing at a young age.Foulger says that because most Indian manufacturers prefer to hire men, it was easy to hit his hiring targets. But he’s had to make accommodations. For instance, the air conditioning had to be turned up to 26 degrees because the woman have never experienced it before. A line manager brought up the issue of sanitary hygiene, and Foulger was initially hesitant. What would be the reaction in their villages, he wondered? Still, he listened and had sanitary pad dispensers installed in the washroom. Foulger also has to pay for extra security for his female recruits and provide buses and dormitory accommodation for those who live far from the factories. But he says it’s well worth the extra cost because “women work hard and appreciate the chances given to them.” Over the years, Foxconn has been criticized for grueling working conditions at its China factories. A string of suicides of young migrant workers earlier this decade shocked the world and prompted the company to create a help hotline, boost pay and install safety netting to discourage jumpers. In August, Foxconn fired two executives at a Chinese plant that assembles devices for Amazon after a labor group alleged it slashed wages and flouted laws to help deal with rising U.S. tariffs.During visits to Foxconn’s two India factories, there was no visible sign of sweat-shop conditions. Workers there mostly complain about the monotony. From the minute they enter the shop floor to the end of an eight-hour shift, work repeats in a relentless cycle. The daily production target has to be met at all costs. Row upon row of women put together each phone part by part, inspecting each handset for visible defects. Shivaparvati Kallivettu, 24, spends her days testing the phone’s audio and examining batteries and SIM card trays, explaining that her main respite comes every morning in the factory canteen when she has breakfast with four close friends.Most women take the jobs with specific goals in mind, such as sending their kids to better schools or clearing family debt. The pay hoists them over the poverty line. Jayadas gets about 9,000 rupees monthly ($130, which is about a third of the average Chinese factory wage), free bus rides and two wholesome meals. To help avoid tedium, the company teaches workers at least 10 skills in the testing, packing and assembly sections of the line so they can be rotated to different jobs. Still, many of the workers treat the job as a stop-gap. Recently, 400 women failed to show up for their daily shift. Managers discovered they were all taking the government’s teacher recruitment exam—a job that pays a third of what they make at Foxconn but provides less tangible compensations.After her shift, Jayadas boards the bus, reaching her home a little before 4 p.m. She helps with the cooking, then fetches 12 buckets of water from a street tap for the family’s daily needs. Her father’s income repairing radios and DVD players is meager and erratic, and her entire paycheck goes to her parents. “First, the house has to be fixed,” Jayadas says gesturing toward the flimsy roof and decrepit walls. “Then, I want to save up for a beautician’s course.” To contact the author of this story: Saritha Rai in Bengaluru at srai33@bloomberg.netTo contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Reuters
Exclusive: India to woo foreign firms like Apple to capitalise on U.S.-China trade war
India is targeting companies including Apple, Foxconn and Wistron Corp with a charm offensive aimed at encouraging them to shift business out of trade war-hit China, according to a source and a document seen by Reuters. Several Indian officials met on Aug. 14 and discussed a list of "target companies" that also include Taiwan-headquartered contract manufacturer Pegatron Corp, a source with direct knowledge said. The dispute between the United States and China, the world's two largest economies, has led to higher tariffs on goods worth billions of dollars and disrupted global supply chains, prompting companies to look at other investment avenues to escape higher tariffs.
- Reuters
Exclusive: India to woo foreign firms like Apple to capitalize on U.S.-China trade war
India is targeting companies including Apple, Foxconn and Wistron Corp with a charm offensive aimed at encouraging them to shift business out of trade war-hit China, according to a source and a document seen by Reuters. Several Indian officials met on Aug. 14 and discussed a list of "target companies" that also include Taiwan-headquartered contract manufacturer Pegatron Corp, a source with direct knowledge said. The dispute between the United States and China, the world's two largest economies, has led to higher tariffs on goods worth billions of dollars and disrupted global supply chains, prompting companies to look at other investment avenues to escape higher tariffs.
- Reuters
Apple's data shows a deepening dependence on China as Trump's tariffs loom
Apple faces levies of 15% imposed by Trump's administration on major products made in China such as smartwatches and wireless headphones on Sept. 1, with a tariff on its biggest seller, the iPhone, to take effect on Dec. 15.
- Bloomberg
Tech Suppliers Shift Away From China Despite Trump Tariff Delay
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. HP Inc.-laptop maker Inventec Corp. said it will to shift production of notebooks for the U.S. market out of China within months, adding to the tech industry’s exodus as the world’s two largest economies escalate their trade war.Inventec plans to move its entire American-bound laptop operation to its home base of Taiwan within two to three months, President Maurice Wu said on a post-earnings call Tuesday. Wu’s company assembles Apple Inc.’s AirPods and produces notebook computers for HP, which accounts for an estimated third of its revenue.Underscoring the difficulty of making such long-term production decisions, President Donald Trump said just hours later that the U.S. would push back implementation of tariffs on Chinese-made laptop and other products to December from September. But tech companies aren’t waiting for a trade resolution. From Inventec to Apple-assembler Hon Hai Precision Industry Co., Taiwanese companies that make most of the world’s electronics are reconsidering their reliance on the world’s No. 2 economy as Washington-Beijing tensions simmer.“The trade war is very painful for us,” Wu said, concluding a call during which executives shared how production shifts have hurt the company’s efficiency and margins.Rising tariffs on Chinese-made products threaten to wipe out their margins and up-end a well-oiled, decades-old supply chain. Microsoft Corp., Amazon.com Inc., Sony Corp. and Nintendo Co. are said to be among those now weighing their options away from the line of fire, such as Southeast Asia and India. Alphabet Inc.’s Google has already shifted much of its production of U.S.-bound motherboards to Taiwan, Bloomberg News has reported.Inventec’s shift marks one of the most dramatic relocations since Trump announced his decision to slap 10% tariffs on $300 billion of Chinese imports -- including consumer gadgets from smartphones to notebooks -- originally slated for next month. Spurred on by clients, which include household names like Dell Technologies Inc. and Nintendo, many Taiwanese contract manufacturers are now drawing up contingency plans, shifting select assembly operations or exploring alternative venues.Analysts anticipate the tariff delay will have little impact on those plans.“While this announcement appears to provide incremental (and market-friendly) information as to how the White House is approaching trade policy, we do not believe it represents a substantial shift in the U.S.-China dispute,” Goldman Sachs analysts wrote in response. “Our broader expectation is that the U.S. and China are unlikely to reach a lasting agreement prior to the 2020 election that provides certainty around tariff rates on imports from China.”On Tuesday, Compal Electronics Inc. Chief Executive Officer Martin Wong said his company, a rival to Inventec, has also shifted some notebook lines to Taiwan and was considering investing more in Vietnam should tariff-conflicts persist. Quanta Computer Inc. Chairman Barry Lam told reporters Tuesday his company is definitely re-locating some business to Southeast Asia, though he didn’t mention a timeframe. Chief Financial Officer Elton Yang said Quanta will for now aim to satisfy customers’ demands for production outside of China with their Taiwan facilities.U.S. companies, long accustomed to using China as the world’s workshop, are looking to diversify their manufacturing operations as the uncertainty over volatile trade policy heightens and Beijing shows a willingness to clamp down on foreign firms within its own borders. It’s a shift that may herald a broader, long-term trend as Beijing and Washington continue to spar over everything from market access to trade.The trade war threatens to disrupt a complex global supply chain involving many countries beyond just China and the U.S. Many components that go into devices aren’t made in the U.S., despite being designed there. A phone chip designed by Apple may come out of a factory in Taiwan, then be packaged (a process that prepares it for integration into a circuit) somewhere else, before being shipped to China for assembly into an iPhone.Still, few major manufacturers have moved output in truly significant amounts and China’s status as the world’s production base for electronics is unlikely to diminish anytime soon. Foxconn Technology Group has said it has enough capacity to make all iPhones bound for the U.S. outside of China if necessary, although Apple has so far not asked for such a shift.(A previous version of the story was corrected to amend HP’s contribution to Inventec’s revenue)(Updates with Trump comments in fourth paragraph.)\--With assistance from Jeanny Yu.To contact the reporters on this story: Debby Wu in Taipei at dwu278@bloomberg.net;Cindy Wang in Taipei at hwang61@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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China accuses Apple of labor law violations
Apple is denying a report that alleges that it, along with manufacturing partner Foxconn, violated Chinese labor laws. Yahoo Finance's Adam Shapiro, Julie Hyman, Andy Serwer, and Brian Sozzi discuss.
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Apple, Foxconn Broke a Chinese Labor Law
Sep.08 -- Apple Inc. and manufacturing partner Foxconn violated a Chinese labor rule by using too many temporary staff in the world’s largest iPhone factory, the companies confirmed following a report that also alleged harsh working conditions. The claims came from China Labor Watch, which issued the report ahead of an Apple event on Tuesday to announce new iPhones. Peter Elstrom reports on "Bloomberg Markets: China Open."
