Foxconn Speeds up Exit From China: Workers Kneel, Apologize, Ask Them Not to Leave

Summary

The 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

00:00

🏭 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.

05:02

📉 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.

10:03

🌐 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.

15:04

🚫 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.

Keywords

💡Foxconn

Foxconn, also known as Hon Hai Precision Industry Co., Ltd., is a Taiwanese multinational electronics contract manufacturer. It is Apple's primary contract manufacturer, responsible for assembling iPhones and other Apple products. The video discusses Foxconn's operations in China, specifically its relocation of equipment and potential withdrawal from the country, which has significant economic and social implications.

💡Relocation

Relocation refers to the movement of Foxconn's equipment from its Shenzhen plant to other locations like Vietnam and India. This shift in operations is indicative of Foxconn's changing strategy and the broader reorganization of Apple's supply chain, which impacts local employment and economic conditions in China.

💡Shenzhen Plant

The Shenzhen Plant is one of Foxconn's major manufacturing facilities in China. The video highlights the decreasing activity and relocation of equipment from this plant, symbolizing a significant shift in Foxconn's presence in China. The plant's scale and impact on the local economy are substantial, employing up to 150,000 people at its peak.

💡Apple

Apple Inc. is a major client of Foxconn, relying on the company for the manufacturing of its products, especially iPhones. The video touches on how changes in Apple's supply chain strategy, such as reducing orders and shifting production to other countries, directly affect Foxconn's operations and employment in China.

💡Employment

Employment in the context of the video refers to the jobs provided by Foxconn at its various plants in China. The potential withdrawal of Foxconn could lead to massive unemployment, affecting the livelihoods of thousands of workers. The video contrasts working conditions at Foxconn with those at local private factories, emphasizing the relative benefits Foxconn employees receive.

💡Economic Impact

Economic impact refers to the broader consequences of Foxconn's potential withdrawal from China. The video discusses how this move could lead to significant economic downturns in regions like Shenzhen and Henan, affecting local commerce, real estate, and overall economic stability due to the loss of jobs and reduction in exports.

💡Manufacturing

Manufacturing is the process of producing goods on a large scale, which Foxconn does for companies like Apple. The video highlights the scale of Foxconn's manufacturing operations in China and the implications of relocating these operations to other countries. Manufacturing at Foxconn includes assembly lines for electronics, which are critical to the supply chain of tech giants.

💡Supply Chain

Supply chain refers to the network of production and logistics involved in the creation and distribution of a product. The video focuses on the shifts in Apple's supply chain, including Foxconn's relocation of equipment to countries like Vietnam and India, and how these shifts affect the economic landscape in China.

💡Labor Conditions

Labor conditions describe the working environment and treatment of employees. The video contrasts the conditions at Foxconn with those at other local private factories, highlighting Foxconn's comparatively better labor conditions, such as regular breaks and medical benefits, which are not as prevalent in smaller, local factories.

💡Economic Decline

Economic decline refers to the reduction in economic activity and prosperity. The video details how Foxconn's relocation could trigger economic decline in regions heavily dependent on its factories, leading to reduced trade, lower tax revenues, and significant job losses. This decline is evident in the drop in mobile phone exports from provinces like Henan.

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]