Foxconn International Holdings has said it will seek higher prices from its clients to help offset wage hikes at a plant in southern China
TAIPEI/HONG KONG – iPhone maker Foxconn International Holdings has said it will seek higher prices from its clients to help offset wage hikes at a plant in southern China that has been hit by a series of suicides.
Meeting shareholders in Hong Kong for the first time since the deaths that received wide global attention, executives at Foxconn, owned by Taiwan's Hon Hai Precision Industry, said the company hoped to reach a consensus with customers this month.
Hon Hai, the world's biggest contract electronics maker with a client list that includes Apple Inc, Dell Inc and Hewlett-Packard Co, has been wrestling with the fallout from 10 suicides in the last five months at Foxconn. In a second hike offer within a week, Foxconn had on Monday offered 70% higher wages to workers provided they agreed to certain conditions.
The suicides and controversy come amid growing labor unrest in southern China in the world's top manufacturing region, where millions of migrant workers from the country's poor hinterlands churn out goods for top global companies.
At a separate shareholder meeting in Taipei, Hon Hai Chairman Terry Gou defended the company he founded in 1974 to make plastic switches for televisions, saying a report he had commissioned showed no clear link between the suicides and work issues.
"We have to carry the 12 crosses, we have no options," Gou told shareholders, referring to the 10 suicides and two other attempted suicides.
But in a sign of changes ahead, Taiwan's richest man said the company was looking for locations in Taiwan to shift some unspecified production from China to automated plants in Taiwan and wanted local authorities in China to manage its worker dormitories.
Analysts said already razor thin margins at Foxconn and Hon Hai would likely suffer as they wait to pass on the cost increases, and shares in both companies continued to slide, taking losses over the past two days to more than 10% each.
"In the near term, it's quite unlikely they can pass the cost increase to customers, but in longer term it is reasonable ... customers may need to share part of the cost," said Chialin Lu, analyst at Macquarie Equities Research in Taipei.
Meeting shareholders in Hong Kong for the first time since the deaths that received wide global attention, executives at Foxconn, owned by Taiwan's Hon Hai Precision Industry, said the company hoped to reach a consensus with customers this month.
Hon Hai, the world's biggest contract electronics maker with a client list that includes Apple Inc, Dell Inc and Hewlett-Packard Co, has been wrestling with the fallout from 10 suicides in the last five months at Foxconn. In a second hike offer within a week, Foxconn had on Monday offered 70% higher wages to workers provided they agreed to certain conditions.
The suicides and controversy come amid growing labor unrest in southern China in the world's top manufacturing region, where millions of migrant workers from the country's poor hinterlands churn out goods for top global companies.
At a separate shareholder meeting in Taipei, Hon Hai Chairman Terry Gou defended the company he founded in 1974 to make plastic switches for televisions, saying a report he had commissioned showed no clear link between the suicides and work issues.
"We have to carry the 12 crosses, we have no options," Gou told shareholders, referring to the 10 suicides and two other attempted suicides.
But in a sign of changes ahead, Taiwan's richest man said the company was looking for locations in Taiwan to shift some unspecified production from China to automated plants in Taiwan and wanted local authorities in China to manage its worker dormitories.
Analysts said already razor thin margins at Foxconn and Hon Hai would likely suffer as they wait to pass on the cost increases, and shares in both companies continued to slide, taking losses over the past two days to more than 10% each.
"In the near term, it's quite unlikely they can pass the cost increase to customers, but in longer term it is reasonable ... customers may need to share part of the cost," said Chialin Lu, analyst at Macquarie Equities Research in Taipei.