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Foxconn Overtime Cuts Announced, But More Needs To Be Done

Apple Inc and Foxconn have improved working conditions at Chinese factories that make most of the world’s iPads and iPhones, according to auditors the firms enlisted to monitor the process, but tough tasks lie ahead.

The Fair Labor Association said on Tuesday local laws require the companies — which came under fire over conditions at the plants blamed for a series of suicides in 2010 — to reduce hours by almost a third by 2013 for the hundreds of thousands working in Foxconn plants across southern China.

Foxconn said on Wednesday it would continue to cut overtime to less than nine hours a week from the current 20, even though that could raise labor costs while also making it difficult to attract workers.

"It is a challenge. When we reduce overtime it means we need to hire more people and implement more automation, more investment on robotic engineering. More workers also mean more dormitories and recreational facilities; it takes time," said Louis Woo, special assistant to the CEO of Foxconn.

"But I expect more loyalty from workers as a result, and then we can save more costs on recruitment and retainment," he told Reuters in an interview on Wednesday.

"Yield rates will also improve. Efficiency in terms of productivity, yield gain, retention and lower turnover rates should be able to improve next year."


Earlier this year, the FLA — of which Apple is a member — found multiple violations of labor law, including extreme hours, after launching one of the largest investigations ever conducted of an American company’s operations outside the United States.

Apple, the world’s most valuable company, and Foxconn — the trading name of Taiwan’s Hon Hai Precision Industry whose clients also include Dell Inc, Sony Corp and Hewlett-Packard Co — agreed to slash overtime, improve safety, hire new workers and upgrade dormitories.

Woo said Foxconn not only wants to do “the right thing” for its one million employees, it also wants to serve as a model for other companies.

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