Foxconn has given in to global PR. The manufacturer which does a great deal of work for Apple (NASDAQ: AAPL) will increase worker salaries and lower hours worked. The Fair Labor Association, which stepped for Apple when it was criticized for Foxconn “quality of life” work conditions, issued a report critical of the manufacturer. The New York Times wrote a damaging expose on Foxconn and other Chinese firms, as well.
Many Chinese manufacturers are concerned that if they have to sharply raise salaries that their cost structures will become less competitive than those in Mexico, Vietnam–or even the US where the near-death of unions and some industries have brought down worker salaries considerably.
According to Reuters:
Foxconn Technology Group will keep on increasing worker salaries in China and cutting the hours of work, Chairman Terry Gou said on Sunday, after it came under fire for poor working conditions for employees making Apple iPhones and iPads.
As part of its efforts to relieve the pressure on its existing factories in Chinese cities such as Shenzhen and Chengdu, Gou said Foxconn would be building high-tech manufacturing facilities in Hainan, as well as expanding operations in Brazil.