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Apple Economy

A look behind the gates of Foxconn

Rob Schmitz Apr 9, 2012

Jeremy Hobson: We’re going to start this morning behind the gates of a company that few outsiders have ever visited: Foxconn, the Chinese factory that makes 40 percent of the world’s electronics, including many Apple products.

The second journalist to visit an Apple production line at Foxconn is our own China correspondent Rob Schmitz. He joins us now from Shanghai. Hi Rob.

Rob Schmitz: Hey Jeremy.

Hobson: So what’s it like in there?

Schmitz: Well I’ve been to other factories before, and you see usually at factories a lot of machines and workers here and there. But in this factory, on the iPad assembly line, what first hits you is just the sheer amount of people. You see line after line of hundreds of workers, and you get this relation that this is a real manual labor process for what is a machine that’s very sleek and looks like a machine actually made it. But in fact, every single part of that is being put together by a person.

Hobson: Now one of the things that just happened just in the last couple of weeks is that Foxconn agreed to reduce the overtime hours for its workers. What are the workers telling you about this?

Schmitz: So last week, Apple and Foxconn gave me this guided tour of Foxconn’s largest factory in China in the city of Shenzhen, across the border from Hong Kong. But prior to that tour, I spent a couple of days talking to workers outside the gates of that factory — neither Foxconn nor Apple knew I was doing this. And I asked the workers what less overtime would mean for them. Now keep in mind that 99 percent of the workforce at the Shenzhen factory are migrant workers. They came to Shenzhen from hundreds of miles away to work here, and they came here specifically to work a lot of overtime. So many of the responses I got were like this one, from a worker named Xu.

So he’s saying that he’ll return to his home village soon. He’s realized that he can’t save enough money living in a developed coastal city like Shenzhen — the cost of living is just too high.

Hobson: So if migrant workers like this are going to start returning to their home village, what does that mean for the manufacturer like Foxconn?

Schmitz: I asked Foxconn spokesman Louis Woo about this, and one of the things that Foxconn’s already doing is that they’re replacing workers with machines. For example, on the iPad assembly line I toured — I was just talking about all the people on that line — but part of the line, a very small part, that assembles the motherboard to the iPad, was now being done by a 20-foot-long machine. I asked one of the engineers what impact that had on Foxconn’s workforce, and he told me that the machine replaced about one-seventh, about 28 workers, on that particular line — that’s one-seventh of the line.

And there are other ways that Foxconn is changing. Louis Woo and I talked about how this new generation of workers in China are different from their parents, and here’s Louis.

Louis Woo: The new generation of workers, they don’t like to engage in this line of business as much as before. So in a sense you can argue that China is changing; the workers are changing; and so is Foxconn.

Hobson: So if the work is changing and Foxconn is changing, does that mean that the assembly line work in China is going to be a thing of the past?

Schmitz: I think what it means is less assembly line work in developed parts of China like Shenzhen is going to happen. Instead of workers migrating a thousand miles to the Chinese coast, now what we may start seeing are companies moving their factories away from the coast, where the workers actually come from. So instead of the workers migrating, it’ll be the factories. And Foxconn’s already doing this — the company’s newest factories are all in inland provinces, and in some ways, this is a win-win. Foxconn saves money on wages because wages in China’s interior are lower than on the coast. And the workers can be closer to their families.

Hobson: Marketplace’s China correspondent Rob Schmitz in Shanghai. His series “The People Behind Your iPad” will be airing this week on Marketplace. Thanks Rob.

Schmitz: Thanks Jeremy.

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