Foxconn's Founder Opens Up About Making iPhones 384
eldavojohn writes "Bloomberg Businessweek has an article of interest resulting from a three-hour interview with Foxconn founder Terry Gou (single page), whose company manufactures 137,000 iPhones a day. The article profiles Gou's rise to Foxconn but also offers some interesting tidbits you might not know. On why he is not opening factories in the United States, Gou frankly states, 'If I can automate in the US and ship to China, cost-wise it can still be competitive. But I worry America has too many lawyers. I don't want to spend time having people sue me every day.' If you're interested in how a modern day Henry Ford thinks, you can read the rest about the man steering the ship of the world's largest producer of electronics components and China's largest exporter. This unprecedented transparency was part of an agreement Gou made with his customers during his delayed response to an increasing number of Foxconn suicides."
Where's my anti-Foxconn? (Score:5, Interesting)
I'm still waiting for an iPhone manufacturer that pays its workers a decent wage and respects meaningful safety standards. I'm willing to pay an extra $100+ for my iPhone to not have a guilty conscience. C'mon invisible hand, supply my demand already.
Re:Exploitation for the win! (Score:1, Interesting)
Different culture, different scenario.
A sampling of Gou's collected aphorisms: "work itself is a type of joy," "a harsh environment is a good thing," "hungry people have especially clear minds," and "an army of one thousand is easy to get, one general is tough to find."
There was a time in America's history where these ideas were prevalent. It led to a lot of worker abuse... but it also helped them to make themselves into a great country.
Not that I disagree with you, I'm just saying. It's all about perspective.
that's one way to see it, here's another (Score:5, Interesting)
Perhaps the US does have too many laws and lawyers. Perhaps it is more competitive to produce products somewhere else. Perhaps US workers think they are more valuable than they really are (so they erect laws to "enforce" that value). Did you ever consider that maybe it's not exploitation he is after but a better sense of balance? The world is not black and white. This is not a "workers of the world unite" vs "the evil business owners". You do recognize there is a middle ground, don't you?
This guy is telling you exactly what his risk/reward calculation is and you only look at one side of the equation.
Instead of responding with cries of exploitation, as yourself this: could he be right?
Re:that's one way to see it, here's another (Score:3, Interesting)
Instead of responding with cries of exploitation, as yourself this: could he be right?
If working people so hard they start killing themselves is right, sign me up for wrong.
I'm not a fan of imperialism but I'd actually rather America try to conquer China than emulate it if push came to shove.
Re:Exploitation for the win! (Score:4, Interesting)
Re:he's not a modern day Henry Ford (Score:5, Interesting)
Re:Exploitation for the win! (Score:4, Interesting)
precisely.
This is why there should be a huge tariff on all goods imported from companies that don't meet min. US federal standards.
If that's too much for them to do, then someone will pen a shop in the US to cater to the US.
Having a minimum level playing field is the only way a global economy can work without dragging people into the lowest tiers of poverty.
Re:Exploitation for the win! (Score:5, Interesting)
I'm saying that we uphold our values and protect our interests. Is that really too much to ask of a nation that has been touted as the best on Earth?
Why should give them the benefit of our trade when they do not behave in a fair manner? You seem to be saying we shouldn't hold our trading partners accountable for their human rights violations. Why is it okay to do business with some mass murderers and not others?
Re:Exploitation for the win! (Score:5, Interesting)
Which part? China is a prime example of a hydraulic empire, [wikipedia.org] and their culture reflects that. Considering that they had their first major empire collapse in 500BC or so and six major players left were fielding million man, iron equipped armies at the time, I'm really not sure what you are referring to as 'nonsense.'
Re:Exploitation for the win! (Score:3, Interesting)
The point is that Chinese companies are not moving to the US because their PERCEPTION of the business climate in the US. For better or worse they believe that they will get sued. So why bother.
Re:Exploitation for the win! (Score:2, Interesting)
From what I understand, the US is the "worst" in every possible measure. Various surveys say we are worst in healthcare. Worst in internet. Worst in transportation. Worst in taxation. Worst in lifespan. Worst in education. Worst in size of our waists. Wort quality in cars. Worst in consumer protection. And on and on and on.
I'm starting to wonder if these surveys are just political propaganda (i.e. "biased bullshit" to quote Penn&Teller) that aren't worth the paper they are printed on. For example when *I* surveyed the internet, I found the US is actually not the worst/slowest but in the #2 position worldwide, ahead of the EU, Canada, Australia, Brazil, and so on.
I think it's time we start looking at these surveys *critically* rather than just swallowing the headline and assuming it's the truth.
there absolutely is a waiting list (Score:5, Interesting)
In fact, you almost have to bribe someone to get a job interview!
There isn't really multi-week training, you are put on easier lines first and work up to your aptitude.
But just because there's a line to get in doesn't mean there's any job security. When things slow down, you simply aren't brought back next week.
When you get too old for the dextrous work or your fingers grow to be too large to do some work (because their lines are virtually all 16-20 year old women) or merely when someone else will do the job cheaper because they are younger, you are out on your ear.
Like I said, I don't hate Foxconn. But it's not the same as Ford where he employed workers long term and invested in their development.
Re:He has a point about lawyers (Score:4, Interesting)
USA still has _great_ climate for business. There's no VAT, _very_ low taxes for a first-world country, fairly simple financial accounting rules, etc.
Contrary to the believes that Obama somehow makes USA unfit for business, it's still quite attractive to do business there.
However, the piece about lawyers is true. I'm a co-owner of a fairly small US company, and we've already spent more on lawyers then on rent for our offices. I also live in Ukraine and I own a company here, and so far I've spent less than $1000 on lawyers' fees.
Re:Exploitation for the win! (Score:5, Interesting)
Is it so unreasonable to focus instead on producing the same products with less labor (and thus less cost) than those willing and able to propagate such practices?
That sounds great. I'm all for increasing efficiency and applying technology to the issue. But there's limits. Some jobs are difficult to automate. And even when you can automate, the machines have to be paid for and someone has to run the machines.
This leads us to two issues. One, the machines have to be more cost-effective than an exploited work-force. And even then, what can be automated here can be automated there where the workforce that runs the machines are cheaper (read: exploited).
THis is aside from the fact that - at least from TFA - working conditions might not be quite as bad as the media hysteria has made them out to be.
Yes - I'm sure the suicides and the expose on working conditions at the company by China Business News were just aberrations of an overzealous imagination. Meanwhile, Foxconn hired a New York public relations firm because they just want to get their name out there.
Re:Exploitation for the win! (Score:3, Interesting)
The Chinese believe in a middle class too. In the past 20-30 years, they've gone from society with pretty much zero middle class (just peasants and a few privileged Party members at the top), to a middle class that dwarfs America's. Of course, their middle class doesn't make as much money as ours, but they don't need it because their cost of living is much lower. They have all the stuff we do: houses, cars, computers, iPhones, etc. A lot of people are complaining even, because so many Chinese are buying cars now (for some weird reason, they really like Buicks!), so the city streets are being taken over by cars and traffic, and the bicyclists are relegated to the sides (they used to have full run of the streets).
The Chinese aren't getting poorer, they're getting much, much richer. Of course, it still sucks for a lot of them, as the factory jobs aren't anything we'd be interested in (long hours, living in dorms, etc.), but to them it's better than working in the fields. But there's a giant and growing middle class coming out of this, working as engineers, doctors, etc.
How is this possible? Simple: lower cost of living, mainly because they don't have to pay a bunch of lawyers every time they do something, and they don't have a bunch of lying lawyers running their government. Also, no debt: a huge amount of our GDP goes to pay interest on debt. Most Americans are mired in debt, so they have to have big incomes to pay the continuous interest payments.
Re:Too many lawyers? Or too many laws? (Score:1, Interesting)
99% of what goes on in those lawsuits is righteous protection of workers and customers from the bad or evil decisions of managers.
What goes on are sexual harassment lawsuits by people that invent things that didn't happen or exaggerate otherwise normal human interaction.
What goes on are workers comp scams.
What goes on are environmental shakedowns every time a private interest needs to improve or dispose of property.
What goes on is product liability lawsuit abuse that attributes the consequences of abject stupidity to innocent companies and individuals.
What goes on are wrongful termination suits that occur whenever you fire thieves and such.
What goes on is roaming bands of lawyers using IP law to extort businesses and individuals.
There are too many lawyers. There are too many people like you inculcated from birth with a primal loathing for the market and the businesses that created the wealth you take for granted. Your counterparts in China don't share your damage; they will own the world while you and yours subsist in a wasteland of decay. Even if you can do well you will be surrounded by failure and you will be forced to isolate yourself and your progeny from it.
But I'm sure your deployment of nets
There are nets under bridges in the US to prevent suicides. Nets appear whenever suicidal people decide to follow the lead of other jumpers and leap from some structure. Foxconn employs a million people. Some of them are going to deliberately check out. What of it?
Gou told it like it is. He held up the rotting corpse of the US and diagnosed the cause of death. It was self inflicted, your kind inflicted it and he exposed you for it.
Re:Exploitation for the win! (Score:5, Interesting)
why not develop improved manufacturing technology and capability -- demonstrating that it's possible to make competitive products without "exploiting" the poor?
Exactly, this is a good strategy for countries that can develop advanced industrial robots. The top 10 countries by robot density [ieee.org] all have successful economies when compared with the rest of the world. There are some industries where high levels of automation are not possible yet (sewing clothes together, assembling complex 3D structures, picking vegetables, things that rely on hand-eye coordination and human mobility); these are the human labour intensive industries where cost pressures mean labour is generally sourced from other countries (where outsourcing is possible), or immigrants (where local). But for everything else, the developed world needs to continue to move from a culture of "building stuff" to a culture of "building robots that build stuff". Competing directly with countries like China to provide cheap labour is not going to work, waiting for the salary of the average Chinese to reach Western levels will take too long, and starting a trade war through punitive taxation is only going to hurt both sides in the long term. I do find it odd that people seriously still think the Western world could be competitive with China in traditional manufacturing - it is simple economics that work will flow to the human worker who costs 1/10th of the competition.
Re:Join me in the BUY-cott (Score:3, Interesting)
The fact is that Foxconn has HALF the suicide rate of Italy, which has the LOWEST rate in Europe.
Hmmm, according to Wikipedia [wikipedia.org], Greece has about half the rate of Italy... but your comparison is void anyway because:
a) An entire nation has a much more diverse population. Alcoholics, mentally ill, elderly etc. ("about 90 percent of persons who completed suicides in all age groups had [have] a diagnosable mental or substance abuse disorder" link [nami.org]). A young workforce that has been selectively recruited should have much lower levels of mental and substance abuse than the general population, and hence, much lower levels of suicide.
b) Foxconn apparently has a predominantly young, female workforce. Looking at the figures from Wikipedia [wikipedia.org], the female suicide ratio is about 1/5th that of the male. Until you know the exact gender and age makeup of Foxconn's workforce you can't compare stats accurately, but we would expect a predominantly female workforce to have a much lower suicide rate than the "average" (50/50ish gender mix).
c) All the articles from May-June that mention "14 suicides per 400,000 workers this year" are cunningly refering to "this year" as the period January-May.That is not 12 months, that is 5 months, so the calculated suicide rate from those articles is incorrect.
The correct comparison would be: what is the expected suicide rate given the age/gender of Foxconn employees, either compared to a similar population in manufacturing jobs in the West or China (depending on what point you want to debate). This comparison has not been done by any of the sites on the net that discussed this topic, and the ones that have compared the suicide rate to the general population are being blatantly dishonest due to point a) above.