
Is Foxconn Fleeing China? Sure Looks Like It - nreece
http://www.forbes.com/sites/gordonchang/2013/02/24/is-foxconn-fleeing-china-sure-looks-like-it/
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rogerbinns
Nothing is mentioned about robots. It certainly makes sense to use them closer
to customers and where wages are higher. It is also easier to run a factory
with robots 24 hours a day 7 days a week at times leading up to product
launches.

[http://www.tomshardware.com/news/foxcponn-apple-iphone-
ipad-...](http://www.tomshardware.com/news/foxcponn-apple-iphone-ipad-
robot,19088.html)

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bitcartel
It appears the author has a penchant for bashing China at every opportunity.
Check out this comment[1] and then browse the author's archive[2] to make up
your own mind.

[1] [http://www.forbes.com/sites/gordonchang/2013/02/24/is-
foxcon...](http://www.forbes.com/sites/gordonchang/2013/02/24/is-foxconn-
fleeing-china-sure-looks-like-
it/?commentId=comment_blogAndPostId/blog/comment/1030-1747-5774)

[2] <http://www.forbes.com/sites/gordonchang/archive/>

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hef19898
Ok, so you have a 1.5 million employee company that actually wants to expand
it foot print to contries other than china. Brazil, Indonesia and the move to
the US was already discussed.

Articles like that happen when political journalists write about economic
things. The facts provided are mainly that Foxconn has a) a new growth
strategy and... let me think... yeah, that's about it.

But yes, a 10 billion investment plan in indonesia surely is a sign that the
iPhone 5 (the only electronic device Foxconn is assembling) isn't selling as
good as before. Would Apple stock have risen by 2,4 percent the article would
have been about greater growth in iPhone market share in Brazil and the HUGE
opportunities manufacturing sites in Indonesia would offer.

Just to end up with the fact that Foxconn flees China because it's a bad place
to be. Business as usual in journalism and stock exchanges. :-)

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ma2rten
> the iPhone 5 (the only electronic device Foxconn is assembling)

What do you mean?

"Notable products that the company manufactures include the iPad, iPhone,
iPod, Kindle, PlayStation 3 and Wii U."

Source: <http://en.wikipedia.org/wiki/Foxconn>

~~~
hef19898
Sorry, I forgot the ironic smilley! ;-)

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JumpCrisscross
Brazil has walls of tariffs around its lucrative consumers. The U.S. has Hon
Hai's largest customer's sourcing ambitions. Indonesia has cheap unskilled
labour.

The author, Gordon Chang, is a political analyst. I suspect this may be
colouring his perception.

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dear
This guy is desperately trying to latch on anything he can to sell his
prophecy.

<http://www.gordonchang.com/qanda.htm>

Q: When Will China Collapse? A: Within this decade—in other words, by 2011.

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seanmcdirmid
Well, we have a pretty big property bubble here ATM. Once it goes pop.....

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joonix
China is not a consumer driven economy.

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chiaro
It's incredibly interesting to me that a share price in an US company can
plunge just because their manufacturer in China had some surprisingly low
employee churn.

~~~
kbar13
it's not because of the low employee "churn", it's because Foxconn has put a
freeze on hiring.

People see "hiring freeze" and instantly associate that with slowing down
production or growth.

~~~
seanmcdirmid
Again CNY. Usually during CNY, a lot of your employees don't come back, so
everyone expects high churn around now. Except more old FoxCon employees came
back than expected, so they were probably hiring more people than they thought
they needed. So full stop on hiring. Makes sense given the way the migrant
worker labor market works here.

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fauigerzigerk
Moving production to Taiwan doesn't seem to be a particularaly smart move if
the objective is to avoid China related political risk.

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potatolicious
How so?

The modern take on China-Taiwan relations is free trade and cross-strait
economic cooperation. The Chinese have a not-very-hidden goal of having this
lead to eventual political reunification. The Taiwanese are much more
ambivalent about this concept, but are embracing whatever option leads to
continued de facto independence. The Taiwanese-independence issue is no longer
the hot button topic it once was.

In short, so long as Taiwan makes no overtures towards actual independence,
this relationship is stable, with lifting trade interference being a publicly
stated goal on both sides.

Source: I'm a Taiwanese expat.

~~~
fauigerzigerk
Taiwan making overtures towards actual independence doesn't seem like a very
far fetched possibility. It has been a hot button issue on and off over the
last decades. If, on the other hand, China and Taiwan actually move towards
unification, Foxconn's decision seems even more pointless.

~~~
snogglethorpe
The only way Taiwan's _ever_ going to agree to any sort of unification is if
the mainland political system changes _dramatically_ (though of course this
may the end result of more gradual changes).

If that happens, the effects on China are going to be so huge that they'll
make business decisions made today pretty much irrelevant.

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cpleppert
Geopolitical concerns can't be even a small part of why Foxconn is expanding
internationally. This is just sensationalism over wanting to build the supply
chain to build anything in any location on the planet. They aren't just a
source of cheap labour anymore. Especially Foxconn International wants to move
up the chain and provide more value.

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stravarius
The idea of a company the size of Foxconn fleeing China isn't believable.
Government regulations, tax structure and cost considerations determine
business decision making. And, that's exactly why China's thriving right now.
A decade from another low cost center will spring itself up and without doubt
businesses will throng that destination.

It for sure makes a great negotiating tactic to extract maximum leniency from
the Chinese Govt. Besides, Foxconn is one of the poster boys for Chinese
manufacturing might and the Govt. won't let them shut shop over night. It's
just bad PR!

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smoyer
I don't normally expect to see the words "hissy fits" in a Forbes article ...
I wonder if Forbes will be blocked by the great firewall now.

In any case, I tend to agree with the sentiment that you'd better be seen as
sane if you want the rest of the world to include you in the global economy.

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bvi
Out of curiosity - does Foxconn procure the parts which it uses to assemble
iPhones, iPads etc, or is it Apple's responsibility/domain to procure all the
parts, with Foxconn merely putting it all together?

~~~
beagle3
There might be stuff like screws that Apple will let foxconn procure based on
their spec, but they might not even let them do that.

Apple produces the CPU, procures the screen, the aluminum, the glass, the
memory and the glue. At the scale they operate, if they didn't, they won't be
able to keep the production pipeline running.

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lifeisstillgood
Foxconn is not really the story, let alone their investment plans - the story
is that this will create far far fewer jobs than thought - manufacturing, even
at Foxconn, is dominated by automation and I would not be surprised if Apple
were looking for a gleaming, bright, lights-off factory for the iPhone - think
car factory in Minority Report

Gou has also been reported saying he wants to invest in a million robots at
his factories.

Humans are structurally unemployed

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confluence
_> Foxconn Technology Group sent Apple Inc. stock reeling on Wednesday. Shares
plunged 2.4% on reports that the world’s largest contract manufacturer of
electronics—and Apple’s largest assembler—had imposed at its Chinese plants a
hiring freeze lasting until at least the end of next month._

Sigh. Daily movements in short term market liquidity do not a causation of
disparate events make. Movements happen in stock markets everyday for no
apparent reason - and using these to buoy your point just shows you how you
don't understand financial markets.

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seanmcdirmid
I heard Foxconn was able to offer decent salaries and got all their new hires
in pretty early at the start of the post-CNY hiring season. All their
competitors are hurting for workers now, the workers have raised their
expectations (if Foxconn can over X, why can't you?) and now there are labor
shortages in the Pearl/Yantze manufacturing areas.

