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Thursday, 10 May 2012 - Apple, supplier Foxconn to share costs on improving factories |
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See the best of Reuters photography.  See more | Photo caption  Photo focus: Illumination Exposing for the light often creates a dramatic focal point in the image.  Slideshow  Syrian uprising A look inside Syria as mass protests against President Bashar al-Assad give way to armed rebellion.  Slideshow  Apple, supplier Foxconn to share costs on improving factories Tweet Share this Email Print Related News Hon Hai's plunge exposes poor end of Apple value chain Mon, Apr 30 2012 Galaxy phones power Samsung to record $5.2 billion profit Fri, Apr 27 2012 Wall Street pops on Apple's results, Fed's reassurance Wed, Apr 25 2012 Apple crushes Street targets, dispels iPhone fears Wed, Apr 25 2012 Analysis: As technology shifts, Asian giants wrestle for TV control Tue, Apr 24 2012 Analysis & Opinion In the Boardroom with the Shareholder Spring Apple’s valuation isn’t at risk any time soon Related Topics Tech » Media » iPad » 1 of 3. Taiwanese tycoon Terry Gou, founder of Foxconn, attends a ground breaking ceremony at the new China headquarters building at the Lujiazui financial district of Pudong in Shanghai May 10, 2012. Credit: Reuters/Aly Song By John Ruwitch SHANGHAI | Thu May 10, 2012 3:48am EDT SHANGHAI (Reuters) - Apple Inc and its key supplier Foxconn Technology Group will share the initial costs of improving labor conditions at the Chinese factories that assemble iPhones and iPads, Foxconn's top executive said on Thursday. Foxconn chief Terry Gou did not give a figure for the costs, but the group has been spending heavily to fight a perception its vast plants in China are sweatshops with poor conditions for its million-strong labor force. It regards the criticism as unfair. "We've discovered that this (improving factory conditions) is not a cost. It is a competitive strength," Gou told reporters on Thursday after the ground-breaking ceremony for a new China headquarters in Shanghai. "I believe Apple sees this as a competitive strength along with us, and so we will split the initial costs." It was unclear if the split would be 50/50 or in some other ratio. Foxconn announced in mid-February it had raised wages for workers by 16 to 25 percent, and in late March it reached an agreement with Apple to hire tens of thousands of new workers to reduce overtime work. Analysts have attributed weaker-than-expected first-quarter results at Foxconn's flagship listed unit Hon Hai Precision Industry Co Ltd mainly to rising salary costs. Hon Hai has been trying to cut rising Chinese labor costs in the past two or three years, and has been relocating plants to areas of China where wages are lower. FOCUS ON DOMESTIC CONSUMERS Foxconn's manufacturing in China will focus on domestic consumers in the country of 1.3 billion people, as well as research and development in technology, sales and services, Gou said. Foxconn Technology Group's other listed units include Foxconn International Holdings, the world's top contract mobile phone maker, and Foxconn Technology Co which makes casings. Over the past two years, there has been a spate of suicides at Foxconn's sprawling plants which make the Apple products as well as gadgets for the likes of Microsoft and Nintendo. Apple and Foxconn agreed earlier this year to improve conditions for workers assembling Apple products. Despite Hon Hai's weak first-quarter showing, Gou said he expected the group to be able to reach its revenue growth target of 10 percent this year. (Additional reporting by David Lin; Editing by Muralikumar Anantharaman) Tech Media iPad Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints   We welcome comments that advance the story through relevant opinion, anecdotes, links and data. 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