As a man who has been widely accused of being a sweatshop proprietor, one would expect Terry Gou, CEO of Foxconn Electronics’ parent company Hon Hai Group, to be careful with his words. A recent appearance by Mr. Gou on Taiwanese T.V, however, has the electronics executive looking to recant what his company calls a “statement taken out of context”.
Three days after 200 Foxconn employees threatened to jump off the roof of a factory to protest unlivable wages and working conditions, Mr. Gou was featured on a segment of a Taiwanese news program highlighting the Foxconn-paid tour of Taiwan for select workers, telling the employees, rhetorically, ‘What’s wrong with sweatshops?’
“We sweat and bleed, as long as we comply with the law,” the Hon Hai CEO said, stressing that the road to achievement runs only through hardship.
Mr. Gou says that the employees of Foxconn deserve what they earn through hard work, and that the prosperity of future generations will originate from the sweat of Foxconn employees and the “common beliefs in their blood”.
The Foxconn employees who were visiting Taiwan were selected as a reward for their outstanding performance. Employees in the group also received an iPhone, and the equivalent of approximately 800 Canadian dollars (5,000 yuan) each.
While Hon Hai, with nearly a million employees in mainland China, has been eager to clear itself from allegations of labour abuse in its Foxconn plants, the company’s profit continues to slip due to increased labour costs due to promised wage rises (a wage rise was announced in February with a follow up in July); its gross profit margin in Q1 fell to 4.02% from 7.25% a year earlier, despite increased demand for Apple products.
After a stinging series of articles titled “The iEconomy” published by The New York Times, Apple allowed labour inspectors from the Fair Labour Association into its Foxconn plants.
Some labour advocates argue, however, that the F.L.A is something of a toothless organization because its funding comes from the companies it is hired to inspect.
“The F.L.A. does some good work, but we don’t think it’s appropriate for them to call themselves independent investigators because they’re in part funded by companies,” said Scott Nova, executive director of the Worker Rights Consortium, a university-backed factory monitoring group to The New York Times. “Independent monitoring means you’re generally independent of the companies.”
Jorge Perez-Lopez, the association’s executive director, counters Mr. Nova’s accusations by pointing out that the companies providing funding to the F.L.A and sitting on its board had no say in what factories were inspected or when.
Some of the findings in the F.L.A report on Apple’s Foxconn factories show that employees worked an average of fifty-six hours a week (the legal limit is forty-nine hours a week including overtime); 14% of workers were not being paid for overtime because Foxconn pays overtime in 30-minute increments (without rounding up); and while the factory workers make more than the minimum wage in China (about $220 a month), 64% said that their pay was not enough to “cover basic needs.”
When contacted by Hardware Canucks for clarification on Mr. Gou’s comments, a representative from Foxconn said that Mr. Gou had been taken out of context through inaccurate reports by the Taiwanese media. The representative maintained that the meaning of Mr. Gou’s comments was to say that the company is working hard to promote positive workplace conditions and all employees should be proud of the contributions they are making for their customers.