The dysfunction of EMS and tragedy of Foxconn: the company's handling of a suicide cluster overshadows the context.

AuthorSherman, Randall
PositionSHERMAN'S MARKET - Company overview

FOXCONN TECHNOLOGY GROUP opened its first electronics assembly manufacturing plant in Shenzhen, China, in 1988. Today, that is the company's largest plant, with 460,000 employees, about 16% of whom live on campus.

Founded in 1974 as a manufacturer of plastic products (notably connectors) by Terry Gou, who remains its CEO and largest shareholder, Foxconn has become the largest contract manufacturing company. But recently, the company has come under public scrutiny due to allegations of employee mistreatment. To date, 12 employees have jumped from company buildings in suicide attempts during 2010; only two survived (in critical condition). Likewise, the company's critics have leaped to the conclusion that Fox-conn mistreats its workers, but the situation demands greater nuance and understanding. This cluster should be investigated, and indeed the government and Fox-conn's customers are doing so. Managers have provided trained counselors in a care center since April and a suicide hotline since last year, which has been expanded significantly amid these tragic events.

The issue has been exacerbated by Gou's lack of understanding as to why the suicides are happening. Guo recently commented that it is not possible to determine any one cause for these tragic suicides and seems mystified as to why an employee would take their life. The company responds that Gou has been based in Shenzhen since May, leading a team addressing these very complex issues.

The deaths are thought to be related to working conditions at the plant: long hours for poor pay and constant pressure to perform. Indeed, the company's operations and demanding working conditions (although not nearly as bad as the conditions in China's coal mines) appear cause for despair. Workers complain about military-style drills, verbal abuse by superiors and "self-criticisms." They reportedly are forced to read aloud, fined for unwritten abuses (talking to coworkers, tardiness, etc.), as well as allegedly pressured to work as many 13 consecutive days to complete a big customer order - even when it means sleeping on the factory floor.

Foxconn denies these allegations, and claims to follow EICC overtime guidelines of a maximum of 60 hours per month. (The company also says it will abide by China's pending overtime guidelines of no more than 36 hours per month.) Moreover, the company's recent wage hikes purportedly ensure that workers will not have reduced wages with reduced overtime hours.


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