(Updates with suicide threat in third paragraph.)

Jan. 12 (Bloomberg) -- Foxconn Technology Group, maker of Apple Inc.’s iPhone and parts for Microsoft Corp.’s Xbox game console, said 150 workers at a southern China factory protested against a plan to transfer them to another business unit.

The Jan. 4 incident in Wuhan was resolved the same day after talks with executives and local government officials, the Taiwanese company said in an e-mailed statement today. Forty- five of the protesters resigned, Foxconn said. Microsoft said in a separate e-mailed statement that the dispute was not related to working conditions.

Foxconn, the world’s biggest contract manufacturer of electronics with 1 more than 1 million employees in China, raised wages and improved worker welfare in 2010 after at least 10 employees committed suicides. The Wuhan protesters threatened to jump from the roof of a factory building, the Daily Telegraph reported yesterday, citing an unidentified employee said to have participated in the action.

“The reason you see these protests is because the employees feel they have no other option,” Geoffrey Crothall, a director at rights group China Labor Bulletin, said by phone today. “If there were proper channels for the resolution of grievances, they wouldn’t have needed to resort to such actions.”

Worker Suicides

The spate of suicides at Foxconn in 2010 prompted labor groups, including China Labor Watch, to say the Taipei-based company pushes employees to work long hours to earn more money. Foxconn denied the allegation.

“After talking with workers and management, it is our understanding that the worker protest was related to staffing assignments and transfer policies, not working conditions,” Microsoft said in its statement.

The majority of the protesters at Foxconn returned to work, Microsoft said.

Foxconn said 45 of the 150 workers resigned, according to its statement.

“The welfare of our employees is our top priority,” Foxconn said in the statement. “The operational changes that were the basis for this incident are being carried out in accordance with all relevant laws and regulations.”

Threatening suicide is a common way for Chinese workers to draw employers’ attention to grievances, Crothall said.

In 2010, Foxconn offered to double wages for workers in Shenzhen, the company’s biggest manufacturing center in China; install safety nets; and hire counselors and psychologists in response to the employee suicides.

The Taiwan company also moved production to locations in central and western China, where costs are lower than in the east.

--Edmond Lococo, Tim Culpan. Editors: Michael Tighe, Frank Longid

To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net