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Foxconn to hike prices to cover China pay increase

Wed, 07/21/2010 - 11:05pm
The Associated Press

Foxconn Technology Group, which makes iPhones and other gadgets for global technology companies, is seeking to charge its customers more to partly cover wage increases at its mammoth manufacturing compound in southern China.

The extent of price hikes will differ according to products, C.L. Huang, vice president of Hon Hai Precision Industry Co., parent firm of Foxconn, told a news conference Wednesday night. She did not name the clients.

The Taiwanese firm announced in June two raises, more than doubling the basic worker pay to 2,000 yuan ($293) a month at its southern China compound where it makes iPhones, iPads and other brand-name electronics for corporations including Apple Inc. and Hewlett-Packard Co.

The raises followed 10 worker suicides at the Foxconn compound in the southern Chinese city of Shenzhen. Labor activists have linked the suicides to unduly harsh conditions at the plant, where more than 300,000 people are employed.

Huang said Foxconn will cover the wage increases — to become fully effective in October — also by speeding up factory automation programs.

Amid China's recent spectacular economic growth, Chinese workers are demanding better pay and working conditions. Foreign companies like Foxconn that rely on China as a source of cheap labor are finding it harder to attract and keep workers.

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