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Apple Economy

Labor too expensive? Get a robot

Rob Schmitz Aug 2, 2011
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Steve Chiotakis: Over in China, Foxconn, which makes iPads and iPhones for Apple says it’s going to replace a portion of its workforce — with robots. Foxconn has bee criticized for its harsh working conditions.

Marketplace China Bureau Chief Rob Schmitz reports.

Rob Schmitz: Foxconn’s chairman said he’s opting for robots because the cost of labor in China’s too high.

Other manufacturers along China’s fast-growing East Coast have noticed the same thing. Employees aren’t coming back after holidays, because they’re not being paid enough. As a result, Geoffrey Crothall of China Labor Bulletin says he’s seeing a lot of factories near Hong Kong go bankrupt.

Geoffrey Crothall: But as those industries are closing down, more and more are opening up in inland provinces.

Crothall says foreign companies are opting to head to lower-cost provinces in China’s interior rather than packing up and leaving China.

That’s because China’s home to the fastest-growing consumer population on the planet. So why move your factory when your consumers are right next door?

Crothall: They have to be in China. They can outsource some of their production to some of these countries like Bangladesh, Cambodia, Indonesia, but they will still maintain quite a substantial presence within China.

Last year, Foxconn was criticized for its working conditions after a dozen factory workers killed themselves. Crothall says, if robots can take over some of the more tedious work, that’s a good thing.

In Shanghai, I’m Rob Schmitz for Marketplace.

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