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A million robots to staff unhappy iPhone factories
Sydney Morning Herald - August 2, 2011
Now the company, best known for producing iPhones and other hi-tech gadgets, has found a solution: use robots instead.
The Taiwanese company wants to expand automation in its factories, with Chinese state media reporting plans to use a million robots in the next three years. The news highlights questions about the future of southern China's Pearl river delta, "the factory of the world".
Its low-cost, high-employment model has transformed the international economy, sucking in manufacturing from around the globe, and keeping down inflation in other countries through the flow of cheap exports.
Protesters picket outside an Apple store in Honk Kong, accusing the company and manufacturer Foxconn of poor corporate ethics.
As the world's biggest contract electronics maker, whose other clients include Sony, Nokia, Dell and Hewlett Packard, Foxconn has become an emblem of global manufacturing's ups and downs in China.
It expanded at apparently unstoppable pace – with its mainland workforce growing from 600,000 just after the financial crisis to a million – but has faced increasing costs and growing criticism of working conditions. At least 17 workers are reported to have killed themselves in the past five years.
Now Terry Gou, founder and chairman, has said he wants to cut rising labour costs and improve efficiency by using machines for simple and routine tasks such as spraying, welding and assembling, state news agency Xinhua reports.
Speaking at a company event, Mr Gou said Foxconn already had 10,000 robots and would increase that to 300,000 next year and a million within three years.
"I don't think this is a one-off. Foxconn is often seen as a bellwether of global manufacturing in China," said Alistair Thornton of IHS Global Insight, suggesting other companies would follow suit.
"Workers can command higher wages and are less willing to settle for lower ones. You can no longer just double your workforce to double your output."
Wages in the region have risen by about a third over the past year, experts estimate, as the proportion of young workers shrinks and their expectations rise.
Manufacturers are seeking to improve productivity, or shift production inland or overseas, as Foxconn has already done, with huge new factories in Chengdu, Chongqing and Zhengzhou and one in Vietnam.
"As labour costs rise, companies will have to invest more in automated facilities. But we shouldn't get carried away; there is still a lot of cheap labour out there," said Tom Miller, of Beijing-based economic consultancy GK-Dragonomics.
Foxconn said last year it had overhauled conditions and more than doubled wages at its vast factory in Longhua, Guangdong – from 900 to 2000 yuan ($127 to $280) – after coming under fire over suicides by workers there.
While many say wages and conditions are better than at other factories, some have complained about the tedium of the work and the strict regulations, which include silence on the assembly lines. One young migrant worker told the South China Morning Post last year: "I feel like I have an empty life and work like a machine."
Geoff Crothall, of China Labour Bulletin, a Hong Kong-based organisation supporting workers, said automation could be good news for employees.
"It's a positive development in that it will get rid of the really mind-numbing jobs that are done by unskilled workers and could help to improve skill levels. You still need people to manage and operate these machines," he said. "The question is, how many people are going to be laid off and are they going to be reassigned?"
Others questioned whether the announcement was genuine. "I am suspicious," said Liu Kaiming, of the Institute of Contemporary Observation, which supports workers in Guangdong.
"Machines can do it, but think about the cost... overall, workers are still much cheaper. This is probably just for sensational effect, [to] put pressure on workers."
Professor Huang Renmin, director of the institute of labour market research at the China Institute of Industrial Relations, agreed. "This is the trick capitalists use to threaten workers," he said.
He said labour costs were going up partly because they had been suppressed for so long. The China Daily reported last year that wages as a proportion of GDP fell every year between 1983 and 2005.
In a statement, Foxconn Technology Group said Mr Gou had been discussing his vision for the company.
"In that context, he said that the company is committed to continue increasing investments in R&D, promoting innovation and increasing the use of automation in manufacturing and other operations over the next few years," the statement said.
"He said that the use of automation is driven by Foxconn's desire to move workers from more routine tasks to more value-added positions in manufacturing, such as research and development, innovation and other areas."
It did not refer to labour costs or discuss how many robots would be involved.
Foxconn reported a $US218 million ($198 million) loss last year, compared with a profit of $US37 million in 2009. But it said its first-half loss had narrowed "significantly" this year in a Hong Kong stock exchange filing last month. (Guardian News and Media)
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