On iPhone assembly line to suicide

Ah Wei has an explanation for Foxconn boss Terry Gou on why some of his workers are committing suicide at the company's factory near the southern Chinese city of Shenzhen.

"Life is meaningless," said Ah Wei, his fingernails stained black with the dust from the hundreds of mobile phones he has burnished over the course of a 12-hour overnight shift.

"Every day, I repeat the same thing I did yesterday. We get yelled at all the time. It's tough around here."

Conversation on the production line was forbidden, bathroom breaks were kept to 10 minutes every two hours and constant noise from the factory washed past his ear plugs, damaging his hearing, Ah Wei said.

The company had rejected three requests for a transfer and his monthly salary of 900 yuan ($192) was too meagre to allow him to send money home to his family, said the 21-year-old, who asked that his real name not be used because he was afraid of his managers.

At least 10 employees at Taipei-based Foxconn have taken their lives this year, half of them in May, says the company, also known as Hon Hai Group.

The deaths have forced billionaire founder Gou to open his factories to outside scrutiny.

Gou built his company into the world's largest contract electronics manufacturer and now clients from Apple to Hewlett-Packard are probing its working conditions.

Steve Jobs, Apple's billionaire chief executive officer, who depends on Foxconn to make the iPhone and iPad, said the suicides were "very troubling".

"We're all over this," said Jobs, speaking at a technology conference in Rancho Palos Verdes, California.

His company did one of the best jobs of inspecting suppliers, he insisted, saying it was "not a sweatshop".

Foxconn's Longhua complex outside Shenzhen spans 3sq km and is criss-crossed by tree-lined streets, with a water fountain at its centre.

Workers sported polo shirts emblazoned with "Foxconn" in Chinese characters as they walked along the streets. Men wore blue, women red.

In the compound, at a factory devoted to computer motherboards, young men and women stood at assembly lines, their feet shod in blue slippers and white caps on their heads.

The smell of solvent hung in the air. About 80 per cent of the front-line production staff worked standing, some for 12 hours a day, six days a week, said Liu Bin, a 24-year-old employee.

"It's hard to make friends because you aren't allowed to chat with your colleagues during work," he said at Shenzhen Kang Ning Hospital, where he was seeking help for insomnia.

"Most of us have little education and have no skills so we have no choice but to do this kind of job. I feel no sense of achievement and I've become a machine."

The company provided counselling for workers such as Liu, said supervisor Geng Yubin. Geng, who has worked six years at Foxconn, said 30 and 50 workers came to him daily for advice on their personal lives.

Common problems were homesickness, financial woes, lovers' quarrels and spats with co-workers.

"For many of the young people who are here, this is the first time they've been away from home," Geng said. "Without their families, they're left without direction. We try to provide them with direction and help."

Tian, 18, left her parents and a life of growing corn and rice in Hubei province to find a job in Shenzhen after graduating from high school, her father, Tian Jiandang, said. She was isolated and without friends at work.

She worked at Foxconn for about a year. On March 17, she jumped from the fourth storey of her dormitory in the Longhua complex. She survived and was in a coma for almost two months. Her father still doesn't know why she jumped. He said he was afraid to ask because it might upset her.

The suicides and how to stop them mystify the workers' boss.

"Are we going to have this happen again?" said Gou, speaking on May 27 when he opened the factory to the largest media gathering in company history.

"From a logical, scientific standpoint, I don't have a grasp on that. No matter how you force me, I don't know."

Less than a day after Gou made the remarks, a 23-year-old Foxconn worker jumped to his death, Shenzhen police said. Another worker slit his wrist and was hospitalised.

Born October 8, 1950, in Taipei to parents who emigrated from China's Shanxi Province, Gou formed his company in 1974 with US$7500. Over 36 years, he transformed the supplier of plastic television knobs into Hon Hai Precision Industry that generates more revenue each year than Microsoft, Apple and Dell.

His net worth reached US$5.9 billion this year, Forbes Magazine said. He owns 10.8 per cent of the company as its largest shareholder, Bloomberg data indicates.

The basis of his success was clear, said Pam Gordon, founder of Technology Forecasters, a market-research firm specialising in contract manufacturers and supply chain.

"It's the prices," said Gordon. "Their prices are lower for high-quality work."

Gou is proud of what he's done at Longhua.

"I came here more than 10 years ago to this piece of fallow ground, this mountain," he said. "We brought some colleagues and step by step we built it up."

Gou's ambition and discipline came through in his interactions with subordinates, said people who had worked with him. He could talk for hours without notes and remembered product plans in minute details.

In a session Gou held last year with about 200 managers and engineers to discuss the future of the company's mobile-phone business, the chairman peppered division vice-presidents with questions on progress reports.

Reportedly, he ordered a senior vice-president who could not respond in enough detail to stand before the group for 10 minutes as punishment.

Foxconn won Apple's order to make the iPhone after Gou ordered the business units that made components to sell parts at zero profit, two people familiar with the plans said. They declined to be named.

Foxconn's labour policies and practices were in line with industry standards and regularly reviewed by government authorities and customers, the company said in an emailed response to questions. Foxconn declined to comment on Gou's management style.

Pun Ngai, a professor of applied social sciences at the Hong Kong Polytechnic University, said: "The fundamental problem for Foxconn and other Chinese factories is that their business model relies on a low-cost workforce sourced from rural areas of China.

"Due to its size, Foxconn has to be that much tougher than other factories, and has to become more emotionally detached from its employees than others."

In addition to Apple, Hewlett-Packard and Dell, the world's largest and third-largest personal-computer makers, have begun investigations of Foxconn. Dell spokesman Jess Blackburn and Hewlett-Packard spokeswoman Shelby Watts declined to comment on the status of the investigations.

Apple and other computer-makers should emulate US toy-makers, who faced a similar predicament, said Gene Grabowski, chairman of the crisis and litigation practice at Levick Strategic Communications, a public-relations firm in Washington.

After Chinese suppliers for Mattel were found to be allowing lead paint into products sold in the US in 2007, the company sent inspectors to watch over the plants and invited the media to monitor improvements.

"Apple is especially vulnerable because Apple's computer buyers tend to be more socially aware," said Grabowski. "They care about computers, the environment, about working conditions."

For the group's more than 800,000 employees in China, Foxconn's success also provides a livelihood. One of them, Chen Zhonglei, 30, said the suicides were due to the workers' immaturity and not the company's policies.

"These young workers coming in now are not as ready to take on hardship as much as I was when I arrived," Chen said.

"Psychologically, they're more fragile. They need to come in with an idea about what they want to get out of working here."

The company's working conditions were among the best in China, said Huang Ping-der, an associate professor of business administration at Taipei's National Chengchi University. The recent suicides had highlighted weaknesses in the company's management structure, he said.

China had a suicide rate of 16.9 people out of 100,000 taking their lives in 2004, the World Health Organisation has estimated.

Foxconn raised workers' pay by 30 per cent to 1200 yuan from 900 yuan a month, spokesman Ding said. But the extra money might not stem the suicides, said Xiao Qi, who works at Foxconn in product development. He earned 2000 yuan a month, yet got no joy from his job.

"I do the same thing every day, I feel empty inside."

- BLOOMBERG