Foxconn Speeds up Exit From China: Workers Kneel, Apologize, Ask Them Not to Leave
Summary
TLDRThe script discusses the relocation of Foxconn's manufacturing from China to Vietnam and India, following Apple's shifting supply chain. It touches on the social and economic impacts of this move, including unemployment and the transformation of local communities that relied on Foxconn's presence. The narrative also highlights the harsh working conditions in some Chinese factories compared to Foxconn's comparatively better treatment of workers, and the broader implications for China's economy as it faces a potential exodus of manufacturing jobs.
Takeaways
- 📦 Foxconn is relocating equipment from its Shenzhen plant to Vietnam, possibly signaling a withdrawal from China.
- 🏭 Foxconn's Longhua plant in Shenzhen was once the largest factory in mainland China, employing up to 150,000 people at its peak.
- 📉 There have been reports of equipment relocations from Foxconn's factories in China to India and Vietnam due to a decrease in Apple's orders.
- 👷♂️ The reduction in Foxconn's workforce could lead to massive unemployment for many workers in China.
- 🧍♂️ A Chinese man apologized to Foxconn for previously labeling it as a sweatshop, realizing the harsher conditions in local private factories.
- 💼 Foxconn provides better working conditions and benefits compared to some local factories, including breaks, designated smoking areas, and gloves.
- 📈 Foxconn's departure from certain regions in China has led to economic decline, including a significant drop in export volumes and GDP.
- 📉 Henan Province's foreign trade performance has been severely affected by Foxconn's gradual relocation to India.
- 🏢 The real estate market and local businesses surrounding Foxconn's factories have also suffered due to the company's withdrawal.
- 🌐 The global trade system is interconnected, and the relocation of major companies like Foxconn can have far-reaching impacts, as seen in the butterfly effect.
- 🚫 There is a call for China to prevent Apple and Foxconn from leaving, as their departure could have devastating effects on local economies and employment.
Q & A
What is the current situation at Foxconn's Shenzhen plant?
-The Shenzhen plant of Foxconn is getting quieter as equipment is being relocated to Vietnam, which may confirm rumors of Foxconn potentially withdrawing from China.
Why is Foxconn relocating its equipment from China?
-Foxconn is relocating its equipment mainly due to a shift in Apple's supply chain and a decrease in Apple's orders, leading to a reduction in workforce and factory operations in China.
What was the peak employment at Foxconn's Longhua plant in Shenzhen?
-At its peak, the Longhua Foxconn plant in Shenzhen employed up to 150,000 people.
How did the Longhua Foxconn plant impact the local community in terms of daily consumption?
-The Longhua Foxconn staff was known to consume 20 tons of rice, over 100 pigs, and 600,000 eggs daily, indicating a significant impact on local food demand.
What is the significance of Foxconn's presence in Henan Province?
-Foxconn's presence in Henan Province is significant as it was once the largest exporter and contributed to the province's foreign trade performance and economic growth.
What are the consequences of Foxconn's relocation on the local economy in Henan Province?
-The relocation has led to a sharp reduction in orders, a drastic decrease in the workforce, and a significant drop in export volumes, impacting the local economy negatively.
How has the public perception of Foxconn changed in China?
-The public perception has shifted from viewing Foxconn as a 'sweatshop' to realizing that compared to local enterprises, Foxconn offers better conditions and benefits, and its departure could lead to unemployment.
What is the reported percentage of Apple's iPhones manufactured in India at the end of the previous year?
-By the end of the previous year, it was reported that 14% of Apple's iPhones were manufactured in India.
What are the plans for Foxconn's factory in Chennai, India?
-Foxconn plans to double the capacity of its existing factory in Chennai, India, aiming to produce approximately 20 million iPhones annually and increase its workforce to 100,000 employees by 2024.
What impact has Foxconn's potential withdrawal had on the real estate market in the areas where it operated?
-Foxconn's potential withdrawal has led to numerous unfinished buildings and a decline in the real estate market, as the demand for housing and commercial spaces has decreased significantly.
What is the broader implication of Foxconn's relocation for China's economy and industry?
-The relocation signifies a shift in the global trade system and could lead to massive unemployment, decreased tax revenue, and economic decline in the regions affected. It also raises concerns about the reliance on single industries and the need for economic diversification.
Outlines
🏭 Foxconn's Relocation and Its Impact on China
The script discusses the relocation of Foxconn's equipment from its Shenzhen plant to Vietnam, reflecting on rumors of the company's potential withdrawal from China. Foxconn, Apple's primary contract manufacturer, has seen a significant reduction in scale at its Guangdong province facilities, with reports of tens of thousands of employees and impressive daily operations. The script also touches on the social impact of such a move, including potential unemployment and the comparison of working conditions at Foxconn versus local private factories, highlighting a man's public apology for misjudging the company. The narrative underscores the importance of Foxconn to the local economy and the broader implications of its potential departure.
📉 Economic Repercussions of Foxconn's Shift from China
This paragraph delves into the economic consequences of Foxconn's relocation, particularly in Henan Province, where the company's largest factory was based. The script mentions a significant drop in exports and a decrease in workforce, leading to a decline in foreign trade performance. It also discusses the broader implications for the region's economy, including the impact on local businesses and the real estate market, which had boomed due to Foxconn's presence. The summary highlights the interconnected nature of global trade and the ripple effects of major companies like Foxconn moving their operations.
🌐 The Butterfly Effect of Global Supply Chain Shifts
The script explores the concept of the butterfly effect in the context of global trade, using Foxconn's relocation from China to India as a case study. It details the historical significance of Foxconn to Henan Province's economic growth and the drastic changes following the company's decision to move production lines. The narrative discusses the challenges faced by local industries and the difficulties in replacing the scale of employment and technological innovation provided by Foxconn. It also addresses the misconceptions about contract manufacturing firms and the risks associated with attempting to replace them with high-end industries without a clear transition strategy.
🚫 The Risks of Demonizing Contract Manufacturing
The final paragraph addresses the negative perception of contract manufacturing firms and the potential dangers of policies aimed at replacing them with high-end industries. It emphasizes the importance of these firms in providing substantial employment and driving consumption, which in turn stimulates market prosperity and economic development. The script argues that the benefits of having companies like Foxconn, in terms of technological innovation and establishing China's status as the world's factory, are not easily replicated and that a simplistic replacement of industries is not a viable solution for complex economic systems.
Mindmap
Keywords
💡Foxconn
💡Relocation
💡Shenzhen Plant
💡Apple
💡Employment
💡Economic Impact
💡Manufacturing
💡Supply Chain
💡Labor Conditions
💡Economic Decline
Highlights
Equipment from Foxconn's Longhua plant in Shenzhen is being relocated to Vietnam, indicating potential withdrawal from China.
Foxconn is Apple's primary contract manufacturer and its Guangdong province factory is the second largest in China.
At its peak, Longhua Foxconn employed up to 150,000 people with impressive daily scenes of workers entering the factory.
Daily consumption at Longhua Foxconn's cafeteria included 20 tons of rice, over 100 pigs, and 600,000 eggs.
Founded in 1988, Longhua Foxconn grew into a nearly 667-acre campus, almost a self-contained town with amenities.
Foxconn's development strategy is changing with ongoing reports of equipment relocations to India and Vietnam due to decreasing Apple orders.
The scale of Foxconn's three Shenzhen factories has significantly reduced compared to the past.
If Foxconn withdraws from China, it could result in massive unemployment for many workers.
A Chinese man apologized to Foxconn for previously labeling it as a sweatshop after realizing harsher conditions in local factories.
Foxconn provides better working conditions and benefits compared to some local private factories in China.
A video of an employee being fired for using the bathroom at a tech company in Dongguan went viral, highlighting poor labor practices.
Foxconn's monotonous work and long hours have led to several suicides in previous years, leading to criticism as a sweatshop.
Despite imperfections, Foxconn provided jobs for uneducated workers and contributed significantly to local economies.
Foxconn's largest factory in Henan Province is reportedly transferring to India, causing a sharp reduction in workforce and orders.
Foxconn's partial capacity transfer to India has severely affected Henan province's foreign trade performance.
China's economic system is interconnected, and the departure of leading enterprises like Foxconn can trigger significant chain reactions.
The global trade system exemplifies the butterfly effect, where actions in one region can have far-reaching impacts.
Foxconn's influence on local economies is significant, with its departure affecting not just employment but also local businesses and real estate.
The rise of the new energy vehicle industry is seen as a potential economic support, but it cannot replace the scale of other industries like mobile phones and real estate.
Contract manufacturing firms like Foxconn spread technological innovation, boosting the development of local Chinese manufacturing firms.
Policies aiming to replace old industries with new ones have driven factories away without successfully developing high-end industries.
Transcripts
another batch of equipment is being
moved to Vietnam foxcon Shenzhen plant
is getting quieter and quieter recently
a video showing the relocation of
equipment from foxc con's longa plant in
shanen has been circulating online this
seems to confirm earlier rumors about
foxcon potentially withdrawing from
China entirely foxcon is Apple's primary
contract manufacturer sh L Foxon in
guangong province is the second largest
Factory in China operated by the
Taiwanese Hong High Technology Group
only second to the J Joel Foxon plant in
heram Province at its peak it employed
up to 150,000 people there have been
impressive videos capturing the early
morning Rush at lwaa foxcon every
morning around 7:00 a.m. employees would
start streaming into the factory
continuously until 8:00 a.m. during this
hour tens of thousands of people entered
the foxcom plant through dozens of gates
queuing to clock in at the entrance
inside shuttle buses employees private
cars and delivery trucks were in
constant motion with traffic police
directing the flow at the Factor's
intersections the scene in the cafeteria
was equally impressive it is said that
longa foxcon staff consumes 20 tons of
rice over 100 Pigs and 600,000 Eggs
Daily
founded in 1988 Lona foxcon was once the
headquarters of foxcon in mainland China
starting with only a few hundred
employees it has grown into the largest
Factory in shanhun covering nearly
667 Acres with over 100 Factory
buildings and dozens of
dormitories spanning 2.5 km from south
to North it takes at least 30 minutes to
cycle across the L haa foxcon campus
which boast amenities ranging from
cafeterias to gyms libraries and schools
making it almost a self-contained Town
lwa Foxon is just one of foxc con's
plants in shenen the other two are Guan
Lan Fox conon and ban Foxon while these
two plants are smaller the Guan campus
once employed 100,000 people and ban had
a Peak Workforce of
50,000 however with the shift in Apple's
supply chain foxc con's development
strategy is also changing since last
year there have been ongoing reports of
equipment relocations from Fox Con in
shenen mainly to India and Vietnam as
Apple orders gradually decrease so do
the number of employees today the scale
of these three shenen factories is
significantly reduced compared to the
past as Apple's primary contract man
manufacturer foxcon once operated 45
factories in China employing over 1.2
million people at its peak if foxcon
were to withdraw from China it could
result in massive unemployment for many
workers recently a post about a Chinese
man kneeling to apologize to foxcon
sparked heated discussions online the
content stated that he had been misled
by previous news reports labeling for
Foxon as a sweat shop after working at a
local private shoe factory he realized
that his compatriots were more
exploitative than foreign capitalists he
apologized to foxcon After experiencing
the harsh realities the man explained
that at the Shoe Factory he couldn't go
to the bathroom without permission and
if he couldn't hold it he had to relieve
himself in his pants in contrast foxcon
allowed a 10-minute break every 2 hours
and provided designated smoking areas at
the Shoe Factory workers had to shape
hot shoe uppers without gloves which
they had to purchase themselves for 3
Yen each day at foxcon workers received
a pair of gloves daily he also compared
salaries stating that the shoe factory
paid 4,500 y per month for 17-hour work
dayss from 6:50 a.m. to 11:00 p.m. while
foxcom paid the same amount for 10 hours
work days additionally foxcon covered
medical expenses when workers felt ill
unlike the shoe factory which didn't
even provide social insurance comments
under the post praised the realization
that harsh conditions can make people
appreciate their
circumstances some users noted he is
telling the truth anyone who has worked
in a factory knows he is not
exaggerating the man's experience is
indeed common in private factories in
China recently a video showing an
employee being fired for using the
bathroom at a tech company in dongwan
went viral
online didn't you say we can't use the
bathroom I didn't say you can't use the
bathroom then why did you fire me when I
went to the bathroom tell me why did you
fire me I just went to the bathroom
you're not suited to work in our Factory
okay give him a permanent holiday
starting right now foxcon as a labor
intensive company is far from perfect
most foxcon employees are young and the
monotonous work on electronic production
lines can be tedious during Peak Seasons
working hours are long though overpay is
provided as per
regulations however some young employees
find it hard to adapt to such doll work
which led to several suicides in
previous years this caused much of the
Chinese media to label foxc conon as a
sweat shop under this media influence
many uninformed people often criticize
foxcon online now that foxcon is finally
leaving many who are forced to work in
private factories in China realized that
compared to local Enterprises the
so-called sweat shop foxcon is like a
paradise the young man in the following
video is one of those who have come to
this
realization the manufacturer of
Apple phones has finally been driven
Away by people like you are you
satisfied now from the bottom of my
heart I think it's a Pity even if
Apple's foxcon isn't perfect it provided
jobs for those without education
allowing them to earn a living at foxcon
each job represents many families even
though Huawei phones are good without an
education can it offer you a job can the
employer even look at you straight in
the eye can you earn a penny from it not
only is Fox conon leing shenen but its
largest Factory in ham Province Jen Joo
city is also reportedly transferring to
India resulting in a sharp reduction in
orders and a drastic decrease in the
workforce recently an article published
by the Chinese social media Outlet being
try Think Tank highlighted foxc con's
gradual relocation to India which has
severely affected ham province's foreign
trade performance drawing widespread
attention and further fueling rumors of
foxc con's withdrawal the article points
out that the data in fact following foxc
con's partial capacity transfer
demonstrate that we have greatly
underestimated the impact of leading
Enterprises and the chain reactions they
trigger who would have thought that
Apple's accelerated expansion in India
would directly affect gendol in ham
Province thousands of miles away the
article cites recent data from the
general administration of customs of
China showing that in the first quarter
10 out of 31 provinces experienced a
decline in import and Export volumes
hnan one of the top 10 provinces in
foreign trade saw a significant drop of
23% in net Imports with exports Falling
by 29% the primary reason is the
substantial decrease in mobile phone
exports as foxcon in general is a major
Apple phone manufacturer and hernan's
largest exporter in the first quarter of
this year foxc con's export data
plummeted by 58%
statistics reveal that in the first
quarter of this year hernand exported
only 6.6 million mobile phones a sharp
drop of 10 million units compared to the
same period last year marking a decline
of 61% the export value of mobile phones
fell from 71 billion yen to 27 billion
yen a decrease of
62% this is an unprecedented decline
annually in 2023 hernand exported
57.6 million mobile phones a decrease of
14.5% from
2022 despite this the Import and Export
value of the shingen comprehensive
bonded Zone where foxcon is located
still reached 407 billion yen accounting
for 74% of jol's total Import and Export
and 50% of herand comprehensive bonded
zones are special custom supervision
areas establish by the Chinese
government this indicates that hernan's
mobile phone exports have been declining
since last year and this downward trend
is continuing since foxcon started in J
Jo in 2010 the city has become known as
the world's largest Apple phone
production base it has benefited from
the growth of Apple's iPhone maintaining
the top position in central China's
foreign trade for over a decade however
this year due to the significant drop in
foxcon exports heram province has lost
its top position in central China's
foreign trade to Anu Province the
article concludes that even considering
the 19% drop in apple sales in China in
the first quarter and the global decline
in mobile phone sales the reduction
should not be this substantial this
likely indicates that foxcon which has
held the top spot in Global Mobile phone
manufacturing for many years is moving
some prod production lines out of
hernand Juno's foreign trade heavily
relies on foxcon which in turn depends
on Apple in recent years Apple has been
gradually shifting its supply chain to
India with foxcom focusing on relocating
to India reports indicate that at the
beginning of last year only 5% to 7% of
Apple's iPhones were manufactured in
India by the end of the year that number
had risen to 14%
according to JP Morgan by 2025 25% of
Apple's Global iPhone production will be
based in
India foxcom plans to double the
capacity of its existing Factory in
chenai India by 2024 it aims to produce
approximately 20 million iPhones
annually and increase its Workforce to
100,000 employees doubling the current
number the article points out that the
global trade system is never isolated it
exemplifies the butterfly effect a
butterfly flapping its wings in South
America can cause a tornado in Texas if
foxcon truly withdraws it will not be
the only one leaving a simple comparison
of foxc con's impact on hernan's
economic growth before and after its
arrival clearly illustrates the point in
2010 when the founder of foxcon Terry
Gore chose to establish the company in
jino over 200 upstream and downstream
companies followed suit and settled in
hernand consequently the central region
of hernand previously a major source of
outflowing population and lacking modern
industrial support rapidly developed an
electronics Industry the overall scale
of gendo's electronic information
industry grew
25-fold by 2020 J Joe foxcon had become
the largest export Trading Company in
China with annual exports totaling 31.6
billion this single company contributed
80% of Juno's total Import and Export
volume and 60% of heram
provinces take gendro airport economic
zone for example the year foxcon was
officially established the GDP of the
Zone was only 20.6 billion yen by 2021
the GD DP had reached
117.8 billion yen with more than
five-fold increase at its peak Foxon
contributed as much as 25% to J joo's
GDP this highlights foxc con's
importance to Jingo and hernand Province
at large even on a smaller scale foxcon
once employing 320,000 workers
significantly boosted local Commerce and
service Industries for instance the Comm
commercial pedestrian street in jel Port
new District once bustling and DED a
mini Hong Kong due to foxcon is now
almost
deserted shops including restaurants
hair salons department stores and
clothing stores are either closed or
open with no customers a stark contrast
to its former glory the surrounding
rental housing market has also shifted
from high demand to little interest
earlier this year internal workers at G
foxcon revealed that the factory had
been continuously moving equipment out
with many Indian workers assisting in
the
dismantling local labor agencies
reported that foxcon had stopped
hiring labor agencies analyzing the
reduction in foxcon staff suggests two
reasons some current foxcon workers
found the current salary and benefits
much lower than last year and chose to
leave
voluntarily meanwhile foxcon has
tightened hiring quots therefore there
are fewer and fewer workers left
additionally due to foxc con's lower
salary and benefits surrounding
businesses have also reduced their
hiring
terms in China some people view foxcon
as a factory working for apple and
creating wealth but with low end low
profit and little regard for workers
rights playing a passive role in the
industry
chain they criticize such companies for
coming to China an even question can
hernand people not survive without
foxcon however upon careful analysis
those who shout for foxcon to get out of
China might not have realized that they
are actually jeopardizing their own
livelihoods and those of their
compatriots for workers a small change
in the industry can become an unbearable
burden on their shoulders moreover they
have greatly underestimated the
influence of leading Enterprises and the
chain reactions they
trigger for instance we previously
mentioned foxcon in ning's charging area
which was once a large Factory employing
100,000 people now it is almost deserted
with the entire operation moved to
Vietnam recently a local resident
looking for housing discovered numerous
unfinished buildings many high-rise
residential buildings still have their
scaffolding up or are topped out but
incomplete
all of which have halted construction
the sites are overgrown with weeds and
some foundations have water filled pits
creating a desolate scene the abundance
of Unfinished buildings is reportedly
due to the real estate boom triggered by
foxc con's arrival numerous real estate
companies rushed in some even starting
construction without completing the
proper procedures additionally there are
many local resettlement houses also
known as tertiary houses with unclear
property rights making them difficult to
sell if foxcon were still there these
houses would easily find buyers however
with foxc nearly entirely withdrawn
these properties are left unfinished
former foxcon employees who bought these
homes not only lost their jobs but also
ended up with unfinished houses they
cannot move into causing great distress
a similar Fate has befallen foxcon in
quinan
Province this is fox's industrial park
in the northern part of kchan City the
park covers 1,400 acres and at its peak
it had up to 50,000 employees in recent
years as foxcon has continuously moved
its production lines to Southeast Asia
there are now only about 5,000 employees
left here the previous Rush of employees
during shift changes is a thing of the
past when Apple China when foxan leaves
many of our regions it results in
massive job losses decreased tax revenue
and economic decline even collapse when
Apple leaves the entire supply chain
follows going to India going to
Southeast Asia therefore today's China
must resolutely shout out the slogan
don't let Apple run away some might
argue that without foxcon there are
domestic Alternatives like oil Lux share
PR and byd with the rise of the new
energy vehicle industry the economy can
still be supported for example when the
real estate market fluctuated
significantly some suggested that the
new energy vehicle industry could
compensate now with changes in the
mobile phone market hopes are once again
pinned on new energy vehicles but the
question is can the new energy vehicle
industry replace everything using Common
Sense we should recognize that no matter
how large and promising the new energy
vehicle industry may be it cannot
simultaneously replace the enormous
scale of the real estate industry and
high frequency consumption of the mobile
phone industry manufacturing May sit
Downstream in the industrial chain with
lower profit margins but it provides
substantial employment employment drives
consumption which in turn promotes
Market prosperity and economic
development forming a virtuous cycle
additionally as the contract
manufacturer for Apple's cutting Edge
Products foxcon spreads technological
innovation during its production process
boosting the development of local
Chinese manufacturing firms these
benefits cannot be easily replicated by
domestic Alternatives in the short term
moreover it is these seemingly low-end
manufacturing firms that establish
China's status as the world's Factory
now many contract manufacturing firms
are demonized and policies like
replacing old Industries with new new
ones hoping to develop so-called
high-end manufacturing have driven these
factories away however based on the
current situation many cities have
pushed out low-end manufacturing without
successfully developing high-end
Industries for the complex economic
system this is not a simple replacement
game but a high-risk fundamental
overhaul with a low probability of
success
[Music]
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