Bloomberg News

Foxconn Workers Would Rather Boost Their Salaries Than Cut Hours

March 30, 2012

Employees attend the award ceremony for grass roots employees of 2011 at Foxconn's industrial complex in Longhua township on November 19, 2011 in Shenzhen of Guangdong Province, China. Foxconn, the world's largest electronics contract manufacturer, awards about 200 outstanding staffers from its 26 industrial complexes distributed in China's 17 provinces. Photographer: China Photos/Getty Images

Employees attend the award ceremony for grass roots employees of 2011 at Foxconn's industrial complex in Longhua township on November 19, 2011 in Shenzhen of Guangdong Province, China. Foxconn, the world's largest electronics contract manufacturer, awards about 200 outstanding staffers from its 26 industrial complexes distributed in China's 17 provinces. Photographer: China Photos/Getty Images

Foxconn Technology Group (2317) workers would rather boost their salaries, bonuses and training before cutting hours or improving conditions, according to an audit of Apple Inc. (AAPL:US)’s biggest manufacturer.

Current wages aren’t sufficient to cover “basic needs,” said 64 percent of the more than 35,000 employees surveyed at three Foxconn (FOXCGZ) plants by the Fair Labor Association. When asked which changes they’d make first, 60 percent said they would raise salaries and 42 percent said they would increase bonuses or living allowances.

The average worker is 23 years old and is paid 2,536.85 yuan ($403) a month, the FLA survey found. When asked if they would change working hours and overtime, 72 percent said no. The association said long working hours were among the “most pressing problems,” while acknowledging that employees volunteered for extra time to earn more money.

“They’ve been exceeding the overtime limits,” FLA President Auret van Heerden said in an interview with Bloomberg Television. “They exceeded Apple’s limits and those of Chinese labor law. This is the key finding, and the key remedial proposal: to get Foxconn down to 49 hours a week, which is the legal limit.”

Foxconn Commitment

When asked their opinions about working hours, 48 percent said they were reasonable, 34 percent said they’d like to work more to increase pay and 18 percent said their hours were too long.

About 91 percent said there was no need for more rest days, and 94 percent saw no need to change shift arrangements.

FLA inspectors found at least 50 breaches of Chinese regulations as well as the code of conduct Apple signed when it joined the association in January after deaths of workers at suppliers, the monitoring group said today. Foxconn said it will bring hours in line with legal limits by July 2013 and compensate its more than 1.2 million employees for overtime lost because of the shorter work week.

“We are committed to work with Apple to carry out the remediation program,” Foxconn said in a statement. “Our employees are our greatest asset and we are fully committed to ensuring that they have a safe, satisfactory and healthy working environment.”

Hiring ‘Challenge’

Apple Chief Executive Officer Tim Cook said last month that the company would start releasing data on working hours. In January, it found 84 percent compliance with the 60-hour limit on working hours, based on data collected from 500,000 workers.

That rose to 89 percent compliance in February, when workers averaged 48 hours per week even as the company ramped up production of the new iPad released this month.

The commitment to cut worker hours while keeping pay the same means Foxconn will need to recruit “tens of thousands of extra workers” in the next year, the association said in its report.

“In the long-term, hiring more workers will be a challenge for them to manage as they’re already so large,” said Taipei- based Vincent Chen of Yuanta Securities Co., the top-ranked analyst covering Hon Hai who recommends investors hold the stock.

The survey found that 20 percent of workers wanted more training and 15 percent wanted a greater voice in factory decisions.

About 53 percent of the workers surveyed said they don’t live in company dormitories. About 29 percent said they get a company housing subsidy they consider inadequate, and 20 percent said they get no subsidy.

Concerning worker safety, 57 percent of those surveyed said they had never experienced or witnessed an accident. When asked if safe, healthy working conditions were a reason to stay at Foxconn, 75 percent said no.

About 15 percent of workers surveyed said they are considering leaving the factory in the next two months, while 85 percent said they weren’t.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net; Stanley James in Hong Kong at sjames8@bloomberg.net; and Susan Li in Hong Kong at sli31@bloomberg.net

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


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