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Business

Taiwan tensions fuel Foxconn's bad rep

GUANGZHOU, China -- Foxconn is in the media spotlight again over an allegation of slave labor conditions at its factories on the Chinese mainland, but this may be more of a smear arising from China's ill will toward Taiwan.

     In 2010, the Taiwanese electronics manufacturing service company was condemned worldwide after news reports that workers at its Chinese factories had been forced to work such long hours that more than 10 people committed suicide.

     The nightmare returned this month for Taiwan's Hon Hai Precision Industry, which operates its massive EMS business under the trading name of Foxconn Technology Group. Guo Jun, a high-ranking official at the Communist Party-controlled All China Federation of Trade Unions, criticized Foxconn in a news conference Feb. 2, claiming the company still forced employees to work long hours and drove some workers to commit suicide.

     Foxconn hit back immediately against the claim. The response was politely worded, but the company's outrage was clear.

Baseless allegations?

Interviews at Foxconn's two main plants in Shenzhen, each of which employs over 100,000 people, found that workers' gripes were the opposite of Guo's criticism.

     "Overwork at Foxconn factories? That's got to be a joke," said a 27-year-old man who works at an assembly line for Apple computers. "Especially in the past one to two years, we haven't been able to put in as much overtime as before.

     "I have been unhappy about income declines," the migrant worker from Shaanxi Province said. "We desperately want to do more overtime."

Some Foxconn workers in China complain of too litte overtime rather than too much.

     This worker said he gets two hours of overtime a day at most, resulting in a monthly wage of about 3,500 yuan ($560).

     "We have too much free time now," said a 27-year-old male worker who came here from Hunan Province in 2009. "I wish the company would let us do more overtime."

     "We need more money because we have just had a baby," another 27-year-old migrant worker from Hunan Province said. "I am thinking about switching jobs and working at construction sites, where I can expect to earn about 5,000 yuan."

     No one complained of too much work. About 1,000 Foxconn workers at a Chongqing plant even demonstrated in October, protesting that they did not get enough overtime.

     Some Foxconn employees even question the reports about worker suicides in 2010.

     "If overwork was the reason, they could have quit the plant anytime," an employee in his early 20s said. "Those people took their lives over love-related issues."

Politically motivated attack?

Because the reports of suicides involved workers making Apple's hugely popular iPhone, they made headlines globally. Yet little is known about the suicides. The number was said to be slightly more than 10, but this was out of 1 million Foxconn workers in China. It remains unclear how many of those suicides were due to overwork.

     This is why some people think Foxconn was targeted because the company had been locked in bitter battles with the Shenzhen city government. It began in 2003 when BYD, a major Chinese automaker, diversified into mobile phone subcontract assembling. The company, based in Shenzhen, poached several hundred Foxconn workers, some of whom are alleged to have brought operational know-how and customer lists from Foxconn.

     Foxconn sued BYD at a local court but lost after seven years, during which time BYD's mobile phone manufacturing business took off.

     "It was far from a fair trial, since the Shenzhen city government, which should have been neutral, clearly took BYD's side," a person familiar with the lawsuit said.

     Foxconn's relationship with the city government worsened after the company built massive plants in Chengdu and Zhengzhou to manufacture Apple products, having suffered from labor shortages in Shenzhen. The city lost more than 100,000 jobs. That's when stories of suicides emerged.

     Foxconn likely deserved at least some of the blame, but the negative coverage by news media, some of them heavily influenced by the Shenzhen government, seemed extreme.

     "Behind the whole incident lies the deep-rooted problem between China and Taiwan," a source close to Foxconn said. "Although the company employs 1 million people in China, a considerable number of Chinese people are not happy that a Taiwanese company is dominating the industry and making money in China. They say the Japan bashing in China is bad, but it is far worse against Taiwanese companies."

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