Foxconn’s Overtime Reduction Will Not Affect Product Prices, Analysts Say - fossutall1944

Modest push costs and a healthy reliance on mechanization will ensure Orchard apple tree supplier Foxconn's newly announced efforts to reduce overtime for its employees and hire extra workers has no effect on product prices, according to analysts.

Aside July 2022, Foxconn volition restrict workers' overtime to 36 hours a calendar month, bringing it down from the allowed 80 hours per calendar month, according to an scrutinise released aside the Fair Labor Association on Thursday. Foxconn, which manufactures Apple's iPad and iPhone, made the changes following ontogenesis criticism of working conditions at the companion's factories in China.

Simply the volte-face also means the electronics manufacturing business will want to hire a significant number of extra workers to make up for the unoriented hours, the audit said. Foxconn already employs 1.2 million workers in China.

Labor costs in China, nonetheless, only a cause up a small fraction of a product's total cost, said Helen Chiang, an analyst with research firm IDC. In the case of a PC, the labor cost will only amount to three to four percent of its price, she said.

Foxconn is also expanding its factory base into centrical and western China, where worker wages are lower. This is foreseen to bring down Foxconn's labor costs by 20 to 30 per centum, Chiang said.

"I don't consider the new policies will have much impact along product prices," she added. "Foxconn has already been working to conclude these labor costs."

Foxconn has too aforesaid it wish build robots for use in its manufacturing processes, which leave reduce Labour Party costs over the long full term, said Amy Teng, an psychoanalyst with search truehearted Gartner. Last July, Foxconn's CEO same the accompany planned on deploying 1 million robots over the next class three years at its factories.

The manufacturing giant is also working to increase its revenue by building more of the components secondhand in Apple's iPhone and iPad products rather than source them from outside vendors, Teng said.

"I am now tearing thrown the iPad 3 and I've found much parts that used to cost ready-made by external vendors, merely are now being ready-made by Foxconn," she said. Apple can now shift more element orders to Foxconn, systematic to help the supplier increase revenues and improve workers' salaries, she said.

The Fair Labor Association's audit establish that during peak production periods workers at triplet Foxconn factories in China worked many than 60 hours a week. Nearly incomplete of all employees reported functional 11 serial days Oregon more at some point.

Many employees, nevertheless, reported wanting to work more. A survey found that 33.8 percent stated they would like to work more than hours to earn to a greater extent money, while 48 pct said the working hours were reasonable.

Only a majority of surveyed workers, at 64.3 percent, said their salaries were insufficient to cover BASIC inevitably, according to the audit. The normal time unit salaries across the three factories varied from 2,257 yuan (US$357) up to 2,872 yuan ($454).

In Feb, Foxconn said it had raised wages for its line workers in China aside 16 to 25 percent. But workers' salaries are lul too low disdain the step-up, especially as employees hinge upon extra time bring on to earn more wages, according to labor guard dog group Students & Scholars Against Corporate Misbehavior.

"Apple should ensure that workers can consume a realistic wage when cutting the overtime forg to 36 hours per calendar month," aforesaid Debby Chan, a project officer with the group.

Foxconn welcomed the findings from the Fair Labor Association's audit, is committed to ensuring workers birth a safe, satisfactory and healthy working environment, it said in a statement.

Apple said happening Friday the party has been working for years to ameliorate working conditions at the factories and wants to make its furnish chain "a model for the industry."

Source: https://www.pcworld.com/article/469533/foxconns_overtime_reduction_will_not_affect_product_prices_analysts_say-2.html

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