On a recent weekday, we drove about 60 kilometers from the center of Shenzhen. We met with a quality control engineer for Foxconn, the Taiwanese owned electronics giant. In China, the Taiwanese are renowned for being demanding bosses, and that's putting it very charitably. Last year, nine workers at the plant committed suicide. This was due in large part to the high-pressure environment.
Foxconn makes Apple laptops, Nokia phones, Motorola HDTV boxes, iPods, and iPhones among other common items. The company is the largest electronics manufacturer (or OEM—original equipment manufacturer–in industry parlance) in the world and chances are that you own something made by Foxconn. In Shenzhen, they have one plant with 100, 000 workers and another plant with 200, 000 workers. They have another plant in Dongguan and are setting up two more mega-factories in Hunan Province. These compounds sound like Orwellian cyber sweatshops with cameras everywhere. The engineer told me that no one can beat Foxconn on prices because they are so large that they can get deep discounts from different vendors along the supply chain. I asked him what sorts of businesses were in the five kilometers or so surrounding the factory. "Foxconn and Foxconn's suppliers," he told me.
The engineer described the factory environment: there was no room for error, the vindictive security guards were looking to make an example out of you and punishments were meted out by the human resources department for complainers. He also told me that they have a puppet union that is supported by Foxconn and the Chinese government.
Foxconn is of great interest to me because they have imported this same ruthless efficiency to India, where I live. These practices take place in the industrial suburbs near Chennai, Tamil Nadu, where an import export zone is taking shape that could best be described as "Indian with Chinese characteristics."
There are already labor issues at the plant, which employs 7,000 people and makes mobile phones. Late last year some unionists were jailed when they began organizing workers for a real union to oppose the puppet union set up by the DMK, the regional party that control the state.
As the Pearl River becomes less affordable for both labor and real estate, it will be interesting to watch where else Foxconn sets up shop next. They've already hatched plans for a retail chain in China.