The Mess at Foxconn Zhengzhou: Conflicts Triggered by Extensive Management
Editor’s note: After CLW released a press release on October 5th on a strike occurred in Foxconn ZhengZhou, we received some doubts on the number of workers who participated in the strike. Today, China Business Journal published a report on the strike, they interviewed many workers in Foxconn ZhengZhou, part of this article confirmed our press release.
We translated the entire article but still it is still under editing. For more details, please have a look at this link. http://tech.sina.com.cn/it/2012-10-14/09257700137.shtml
China Business Journal is a leading provider for financial news and information. it’s a weekly journal, and the circulation is 850,000 every week.
October 14, 2012 09:25 China Business Journal (Translated from Chinese)
As the riot at Foxconn Taiyuan on September 23 was still under heated discussion, more news broke out about several thousand workers going on strike at Foxconn Zhengzhou during the 2012 National Holiday in China. Why on Earth do management problems occur so frequently at the world’s largest supply company known for being careful about management?
On October 5th, a large worker strike occurred at Zhengzhou Foxconn. Although Zhengzhou Foxconn denied quickly that the strike had several thousand workers involved and instead attributed the incident to ‘three to four hundred workers expressing appeals in the form of intentional absenteeism, for a period of time only lasting two hours”. My investigation has revealed that there were several hundred workers directly involved in the conflict and another three to four thousand workers insisted on not showing up for work as a form of protest. The whole strike lasted almost two days. As for the reason of the conflict, it was a result of the managemental disorder and pressure from performance assessments.
In the southern part of Zhengzhou, near the Xinzheng International Airport, is a 10-square kilometer area that has become the largest investment project in recent years—Foxconn’s Zhengzhou factory. It is one of the three factories that were constructed when Foxconn decided to build plants in He’nan province in July 2008. Foxconn Zhengzhou is also the largest of the three. There were 120,000 workers there when this factory welcomed a visit from Apple CEO Tim Cook in March of this year. Two other factories, in the Zhengzhou Economic and Technological Development Zone and Zhongmou County, had a total of 60,000 workers. Judging from its production operations, Foxconn Zhengzhou is primarily producing Apple phones.
On October 7th, when the news about ‘thousands of workers striking at Foxconn’ was still a hot issue being reprinted all over the place, Foxconn’s Zhengzhou campus, a source of news, had already calmed down.
On the scene, CBJ reporters saw on that, as usual, there were many recruitment booths around the factory gate broadcasting recruitment policies and advantages of working at Foxconn, accepting inquiring groups of twos or threes. The managers of the booths were staff from the local government’s labor department completing their recruitment duties as well as staff from Foxconn.
Wang Chunpei, who has worked at Foxconn for more than seven years, belongs to the second type of staff mentioned above. “Recruiting is more relaxing than working in the factory,” he said, “but the task of recruiting 300 new employees each month is still a huge challenge. It’s not easy to complete.”
Wang Chunpei received some phone calls and messages on October 6 from some workers on strike in the campus, requesting him not to employ new workers and to join the strike. Wang said there were three to four thousand workers that refused to work overtime. He told the reporter, until the night of October 6, there were still many people that protested by refusing to work. Until 12 AM, striking employees were “suppressed” by assistant security guards at Foxconn. Several workers who led the strike were forced to resign, and the line leader who first initiated the verbal conflict with workers “cannot work here any more”.
On October 6, Foxconn spokesperson Liu Kun told the media, “the labor union has been trying its best to communicate, and this situation has essentially calmed down.” However, he did not explain the specific causes of this strike.
After interviewing several Foxconn workers, this reporter learned that this conflict originated from the fact that the three-day break for the national holiday in Foxconn was not implemented in all production facilities. Some production facilities had no day off during the holiday, including some production lines in Area K (there are eight areas, including A, K, B, E, C, F, D, L, and Area K, F, and L are all assembling iPhones).
A Foxconn worker helped this reporter calculate the following. In Foxconn, according to regulations, working overtime during the holiday for one day (including the prolonged overtime hours that day) would equal a daily income of almost 400 RMB ($62.5), and work during the three-day holiday would lead to around 1,000 RMB ($156.3) in wages. However, if calculated as a normal working day, there would be a huge gap in wages for Foxconn’s workers.
As confirmed by several workers, the reasons above led to the conflict initially that broke out in a production line on the second floor in building 06 of Area K right before noon on October 5. A crowd of workers flooded into the offices of Foxconn management to protest. The circumstance reached a climax on the 6th: some employees personally saw “the beating of a line leader dressed in red”.
The system makes way for performance
The official employment policy of Foxconn shows that the basic monthly wage of a newly-hired worker is 1,800 RMB ($281.3). If calculated as normal working hours—8 hours a day, 22 days a month—and after deducting a pre-wage dormitory fee of 150 RMB ($23.8), the daily price of a worker’s labor is 75 RMB ($11.7), or around 9 RMB ($1.4) an hour. If they work less than 22 days, then the 75 RMB ($11.7) a day would be reduced (the social security and insurance fees would be deducted before getting the monthly wage, too).
The reality at Foxconn is, the more overtime you work, the more money you earn. An income without overtime hours is small. Although visible regulations indicate that Foxconn employees have to have one day off each week, working overtime depends entirely on the willingness of workers. However, the workers admit that when hurrying out orders, there will be some forced overtime practices.
Some workers told this reporter, “everyday (I) start work at 8 am and get off at 6 pm. With 2 more hours of overtime, I will stay on campus for 12 hours. Within the Foxconn working hour design, most of the workers tacitly consider overtime as ‘normal working hours’. If there is someone who does not want to work overtime, there will be ‘a little bit of trouble’ from lower management.”
A line leader, Fu Wenjie, in charge of a dozen of workers, told this reporter that if the daily quota was not achieved, they would be scolded or even be moved to other places. His team is in charge of smearing protective agents onto the aluminum magnesium alloy frame of the iPhone 5 in order to eliminate the probability of scratches. According to the performance of his production line, he will receive a year-end bonus of from 2,000 RMB ($312.5) to almost 10,000 ($1562.5) RMB.
Fu Wenjie said he would rather see the workers work overtime together, because once there are workers not willing to work overtime, he will need to report to supervisors and apply for workers to be transferred from other lines. Fu said that on a production line, absence of workers means that products will be squeezed on the production line. Once one link of begins to lag, it might delay the ability of other links to match up, finally bringing about poor performance marks of the whole production line.
In addition, workers on every production line have repeated the same simple operation for months, almost operating unconsciously. The skilled, highly-efficient operation brought about from such mechanical repetition is not possessed by those who are transferred temporarily from other lines.
Although most workers are willing to work overtime for more money, taking leave or absenteeism still sometimes occurs. This brings about friction between lower-level management line leaders and young, volatile workers, which are not uncommon among Foxconn’s lower-level management. As for the large strike that just occurred, Wang underplayed it saying, “it is actually very common.”
The mess of recruiting
As a matter of fact, ever since August, when Foxconn received the order from Apple, it has faced a hunger for labor. According to information from He’nan provincial government, Foxconn Zhengzhou will need 200,000 workers (with 180,000 currently) by the year’s end to complete the production order of 100,000,000 iPhones for Apple within the year.
“16 to 45 years old,” When replying to an inquiry about employment qualifications at Foxconn, Guo Xiangming, general manager at Zhengzhou Haogongyou Human Resource Co., Ltd. said, “as long as they aren’t lacking arms or legs, anyone could be employed.’
Haogongyou is a local labor agency in Zhengzhou. Compared to dispatching workers through other channels, recruiting for Foxconn will bring additional benefits to the agency. Each time a worker is found by Haogongyou and employed by Foxconn, Haogongyou will receive a 400 RMB ($62.5) allowance. This allowance is the special preference granted by Foxconn to all local departments of labor in He’nan province, but the labor departments always seek the help of social labor agencies. Therefore, agencies like Haogongyou all work for Foxconn.
As the largest investment project in He’nan, Foxconn agrees to be located in Zhengzhou on the condition of several types of preferential treatments. Among them is that the He’nan government assists in recruiting for Foxconn. As decided at the He’nan Governor’s Office Conference on August 4, He’nan province will assist in the employment of 200,000 workers for Foxconn. This assignment was assigned to 18 local governments from around He’nan province, and those local counties or cities that could not complete the assignment would be criticized.
Ever since Foxconn got the order from Apple to produce the iPhone 5 in August, Foxconn employees’ idle working status in June and July has been replaced by a tense status. A labor agency staff member who does not want to disclose their name told this reporter that currently some production lines have shifted from having one day off every 20 days to having one day off every 30 days. And based on the hot sales of Apple products in the past, Foxconn will sustain such an intense working status until the end of the year.
Foxconn workers now work on ‘two shifts’, and production is rushed day and night to fully use the production potential of the production lines, pushing out more products.
In order to help Foxconn recruit enough labor, the He’nan government has carried out a subsidy policy, giving each employee a one-time subsidy of 200 RMB ($31.3) to work at Foxconn. Even given this, all local labor departments have expressed that pressure to recruit is really high and that the recruitment quota is difficult to achieve.
Guo told this reporter that at present, there is a labor shortage at Foxconn and employment qualifications are not strict. From less-educated migrant workers to third- or lower–tier vocational college students who are arranged into internships by their schools, are all working at Foxconn. There is a huge difference in ages of the workers, and they also come from different parts of China. Foxconn’s hunger for labor as well as the individual cultural differences among its workers might be important, difficult-to-neglect reasons for the successive collective events that have occurred in such a short period of time at Foxconn.