Wall Street Journal: Hon Hai Confirms 'Workplace Issue' at Supplier

China Labour Bulletin is quoted in the following article. Copyright remains with the original publisher.

14 January 2013

By Paul Mozor

BEIJING—Gadget assembler Hon Hai Precision Industry Co. said that a "workplace issue" took place at a Chinese factory owned by one of its suppliers, following reports by labor groups that a strike over wages had broken out there.

The Taiwanese company—which makes products for the likes of Apple Inc. and Sony Corp. —said in a statement late Sunday that the issue involved a company called Jiangxi Xin Hai Yang Precision Components Co., in the city of Fengcheng in China's southern Jiangxi province. "We have asked the management of this firm to work with its employees and local government representatives to resolve their concerns and ensure that they meet the high standards of workplace and living conditions that we expect from any firm associated with our company," it said.

The statement followed reports by two labor groups that a strike took place Thursday night and continued Friday in response to low wages and poor conditions there. One of the groups, New York-based China Labor Watch, said that 200 workers on the night shift began the strike on Thursday night, with more laborers on the day shift joining them Friday. Workers threatened not to return to the plant after February's Lunar New Year, when many workers travel home to visit family, according to the account.

Xin Hai officials couldn't be reached to comment. Officials in Fengcheng referred questions to the city's website. The website didn't mention a strike but showed photos that it said showed local government officials touring the factory on Friday afternoon. When the mayor visited the plant, operations "were in perfect order," the site said.

Videos and photos distributed online and by labor organizations showed groups of anti-riot police massing in the streets. The videos and images couldn't be independently verified.

The incident is the most recent in a spate of labor disturbances to hit China's electronics manufacturing industry. Rising labor costs and increased expectations by workers has affected major manufacturers like Hon Hai as well as smaller companies further down the supply chain. Analysts in part attribute increasing numbers of protests on a generational shift, as younger workers are better educated, more active online, and savvier about their rights than the older, more pliant first generation who first went to work in Chinese factories in the 90s.

In September, a fight at a northern China factory owned by Hon Hai led to a riot that left at least 40 injured and caused thousands of riot police to be mobilized.

In October, Compal Electronics Inc., which makes personal computers for Dell Inc.  and Lenovo Group Ltd., had to temporarily stop production at a plant in the city of Chengdu after 2,000 workers went on strike.

According to the China Labour Bulletin, which tracks strikes and protests, there were an average of 29 a month for the first eight months of 2012, up from 11 a month in the same period in 2011.

In response to widespread attention to working conditions at Hon Hai's plants following an outbreak of suicides in 2010, Hon Hai has raised wages at its plants. Last year it also opened three of its plants to an external audit, later vowing to cut down on overtime and improve health and safety conditions at its plants across China.

The Fengcheng city government website said Xin Hai employs more than 5,500 workers. The site said the company makes computer, printer, cellphone and server equipment and produced $76 million in exports last year.

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