[Reader-list] Foxconn Workers in China Say ‘Meaningless’ Life Sparks Suicides

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Foxconn Workers in China Say ‘Meaningless’ Life Sparks Suicides

By Bloomberg News
http://www.bloomberg.com/apps/news?pid=20601109&sid=abLaG8wEdSqo&pos=14

June 3 (Bloomberg) -- Ah Wei has an explanation for Foxconn Technology  
Group Chairman Terry Gou as to why some of his workers are committing  
suicide at the company’s factory near the southern Chinese city of  
Shenzhen.

“Life is meaningless,” said Ah Wei, his fingernails stained black with  
the dust from the hundreds of mobile phones he has burnished over the  
course of a 12-hour overnight shift. “Everyday, I repeat the same  
thing I did yesterday. We get yelled at all the time. It’s very tough  
around here.”

Conversation on the production line is forbidden, bathroom breaks are  
kept to 10 minutes every two hours and constant noise from thefactory  
washes past his ear plugs, damaging his hearing, Ah Wei said. The  
company has rejected three requests for a transfer and his monthly  
salary of 900 yuan ($132) is too meager to send home to his family,  
said the 21-year-old, who asked that his real name not be used because  
he is afraid of his managers.

At least 10 employees at Taipei-based Foxconn have taken their lives  
this year, half of them in May, according to the company, also known  
as Hon Hai Group. The deaths have forced billionaire founder Gou to  
open his factories to outside scrutiny and apologize for not being  
able to stop the suicides. Gou built his company into the world’s  
largest contract electronics manufacturer and now clients fromApple  
Inc. to Hewlett-Packard Co. are probing the company’s working  
conditions.

Steve Jobs, Apple’s billionaire chief executive officer, who depends  
on Foxconn to make the iPhone and iPad, said the suicides are “very  
troubling.”

‘All Over This’

“We’re all over this,” said Jobs, speaking this week at a technology  
conference in Rancho Palos Verdes, California. His company does one of  
the best jobs inspecting suppliers, he said, adding the company is  
“not a sweatshop.”

Foxconn’s Longhua complex outside Shenzhen spans three square  
kilometers (1.16 square miles) and is criss-crossed by tree-lined  
streets with a water fountain at the center of the facility. Workers  
wearing polo shirts emblazoned with “Foxconn” in Chinese characters  
over their hearts walk along the streets. Men wear blue, women wear  
red. Security personnel wear white. The complex boasts its own  
hospital, a collection of restaurants and a swimming pool surrounded  
by palm trees.

The workers, 86 percent of whom are under 25 years old, live in white  
dormitories with eight to 10 people sleeping in a room. The living  
quarters have stairs running up the outside walls and the company has  
begun covering them with nets to prevent people from jumping.

12-Hour Stand

Inside the compound, at a factory devoted to computer motherboards,  
rows of young men and women stand at assembly lines, their feet shod  
in blue slippers and white caps on their heads. The smell of solvent  
hangs in the air. About 80 percent of the front-line production  
employees work standing up, some for 12 hours a day for six days a  
week, according to Liu Bin, a 24-year-old employee.

“It’s hard to make friends because you aren’t allowed to chat with  
your colleagues during work,” Liu said at Shenzhen Kang Ning  
Hospitalwhere he was seeking help for insomnia. “Most of us have  
little education and have no skills so we have no choice but to do  
this kind of job. I feel no sense of achievement and I’ve become a  
machine.”

The company provides counseling for workers such as Liu, according to  
supervisor Geng Yubin. Geng, who has worked six years at Foxconn, says  
between 30 and 50 workers come to him daily for advice on their  
personal lives. Common problems are homesickness, financial woes,  
lovers’ quarrels and spats with co-workers, Geng said.

Without Direction

“For many of the young people who are here, this is the first time  
they’ve been away from home,” Geng said. “Without their families,  
they’re left without direction. We try to provide them with direction  
and help.”

Tian Yu fit Geng’s description. Tian, 18, left her parents and a life  
of growing sweet corn and rice in Hubei province, central China, to  
find a job in Shenzhen after graduating from high school, her father,  
Tian Jiandang, said. She was isolated and without friends at work, the  
elder Tian said. She worked at Foxconn for about a year.

On March 17, she jumped from the fourth story of her dormitory in the  
Longhua complex. She survived and was in a coma for almost two months.  
Her father still doesn’t know why she jumped and is afraid to ask  
because he thinks it will upset her, he said in an interview by her  
hospital bed. Foxconn is paying for her medical care.

Puzzled

The suicides and how to stop them mystify Gou.

“Are we going to have this happen again?” said Gou, speaking on May 27  
when he opened the factory to the largest media gathering in company  
history. “From a logical, scientific standpoint, I don’t have a grasp  
on that. No matter how you force me, I don’t know.”

Less than a day after Gou made the remarks, a 23-year-old Foxconn  
worker jumped to his death, according to the Shenzhen police. Another  
worker slit his wrist and was hospitalized.

Born October 8, 1950, in Taipei to parents who emigrated from China’s  
Shanxi Province, Gou formed his company in 1974 with $7,500. Over 36  
years, he transformed the supplier of plastic television knobs to the  
maker of iPhones and Sony Corp. PlayStations. Hon Hai Precision  
Industry generates more revenue each year than Microsoft Corp., Apple  
or Dell Inc.

His net worth reached $5.9 billion this year, according to Forbes  
Magazine. He owns 10.8 percent of the company as its largest  
shareholder, according to Bloomberg data. Hon Hai Precision has  
dropped 21 percent so far this year.

Gou’s Success

The basis of his success is clear, according to Pam Gordon, founder of  
Technology Forecasters, a market research firm specializing in  
contract manufacturers and supply chain.

“It’s the prices,” said Gordon. “Their prices are lower for high- 
quality work.”

Gou says he’s proud of what he’s accomplished at Longhua.

“I came here more than 10 years ago to this piece of fallow ground,  
this mountain,” Gou said. “We brought some colleagues and step by step  
we built it up.”

Gou’s ambition and discipline come through in his interactions with  
subordinates, according to people who have worked with him. He can  
talk for hours without notes and remembers product plans in minute  
details, according to six people who’ve attended meetings with him.

In a session Gou held in the second quarter of last year with about  
200 managers and engineers to discuss the future of the company’s  
mobile-phone business, the chairman peppered division vice presidents  
with questions on progress reports, said three people who attended the  
gatherings and declined to be named because the event was not public.

Executive Punishment

At the same meeting, Gou ordered a senior vice president who could not  
respond in enough detail to stand before the group for 10 minutes as  
punishment, three of the people said.

Foxconn won Apple’s order to make the iPhone after Gou ordered the  
business units that make components to sell parts at zero profit,  
according to two people familiar with the plans who declined to be  
named because the details are not public.

Foxconn’s labor policies and practices are in line with industry  
standards and are regularly reviewed by government authorities and  
customers, it said in an e-mailed response to questions. Foxconn  
declined to comment on Gou’s management style.

Because Gou is willing to forego margins to win orders, clients like  
Apple and HP are able to boost their own profits, said Daniel Chang,  
who rates Hon Hai Precision “outperform” at Macquarie Group Ltd. in  
Taipei. Hon Hai Precision had an operating margin of 4.3 percent last  
year, compared with 27 percent for Apple and 9.6 percent for HP,  
Bloomberg data shows. The company’s net income jumped 37 percent to NT 
$75.7 billion ($2.3 billion) in 2009, its second-best year on record.

Fundamental Problem

“The fundamental problem for Foxconn and other Chinese factories is  
that their business model relies on a low-cost workforce sourced from  
rural areas of China,” said Pun Ngai, a professor of applied social  
sciences at the Hong Kong Polytechnic University. “Due to its size,  
Foxconn has to be that much tougher than other factories, and has to  
become more emotionally detached from its employees than others.”

In addition to Apple, Hewlett-Packard and Dell, the world’s largest  
and third-largest personal-computer makers, have begun investigations  
of Foxconn. Dell spokesman Jess Blackburn and Hewlett-Packard  
spokeswoman Shelby Watts declined to comment on the status of the  
investigations.

Apple and other computer makers should emulate American toy makers,  
who faced a similar predicament, according Gene Grabowski, who chairs  
the crisis and litigation practice at Washington-based Levick  
Strategic Communications, a public relations firm in Washington.

Lead Paint

After Chinese suppliers for Mattel Inc. were found to be allowing lead  
paint into products sold in the U.S. in 2007, the company sent  
inspectors to watch over the plants and invited the media to monitor  
improvements.

“Apple is especially vulnerable because Apple’s computer buyers tend  
to be more socially aware,” said Grabowski. “They care about  
computers, they care about the environment, they care about working  
conditions.”

For the group’s more than 800,000 employees in China, Foxconn’s  
success also provides a livelihood. One of them, 30- year-old Chen  
Zhonglei, said the suicides are due to the immaturity of the workers  
and not the company’s policies.

“These young workers coming in now are not as ready to take on  
hardship as much as I was when I arrived,” Chen said. “Psychologically  
they’re more fragile. These new workers need to come in with an idea  
about what they want to get out of working here.”

Best Conditions

Foxconn’s working conditions are among the best in China, said Huang  
Ping-der, an associate professor of Business Administration at  
Taipei’s National Chengchi University. The recent suicides in China  
have highlighted weaknesses in the company’s management structure, he  
said.

China had a suicide rate of 16.9 people out of 100,000 taking their  
own lives in 2004, according to estimates from the World Health  
Organization.

Foxconn raised pay for workers by 30 percent to 1,200 yuan from 900  
yuan a month, spokesman Edmund Ding said yesterday. The additional  
money may not be enough to stem the suicides, according to Xiao Qi, a  
college graduate who works at Foxconn in product development. He earns  
2,000 yuan a month, yet gets no joy from his job, he said.

“I do the same thing every day; I feel empty inside,” said Xiao, who  
said he has considered suicide. “I have no future.”