By Rob Schmitz
Marketplace Morning Report, Tuesday, August 2, 2011
Chinese factory owner Foxconn assembles iPads and iPhones and has now announced that in the next few years it will replace a portion of its workforce -- with robots.
STEVE CHIOTAKIS: Over in China, Foxconn, which makes iPads and iPhones for Apple says it's going to replace a portion of its workforce -- with robots. Foxconn has bee criticized for its harsh working conditions.
Marketplace China Bureau Chief Rob Schmitz reports.
ROB SCHMITZ: Foxconn's chairman said he's opting for robots because the cost of labor in China's too high.
Other manufacturers along China's fast-growing East Coast have noticed the same thing. Employees aren't coming back after holidays, because they're not being paid enough. As a result, Geoffrey Crothall of China Labour Bulletin says he's seeing a lot of factories near Hong Kong go bankrupt.
GEOFFREY CROTHALL: But as those industries are closing down, more and more are opening up in inland provinces.
Crothall says foreign companies are opting to head to lower-cost provinces in China's interior rather than packing up and leaving China. That's because China's home to the fastest-growing consumer population on the planet. So why move your factory when your consumers are right next door?
CROTHALL: They have to be in China. They can outsource some of their production to some of these countries like Bangladesh, Cambodia, Indonesia, but they will still maintain quite a substantial presence within China.
Last year, Foxconn was criticized for its working conditions after a dozen factory workers killed themselves. Crothall says, if robots can take over some of the more tedious work, that's a good thing. In Shanghai, I'm Rob Schmitz, for Marketplace.