The Forbidden City of Terry Gou

ElvaWSJ writes "Hon Hai churns out iPhones and Wiis, and provides a window into China's secretive world of outsourcing and manufacturing. With a work force of some 270,000 — about as big as the population of Newark, N.J. — the factory is a bustling testament to the ambition of Hon Hai's founder, Terry Gou. In an era when manufacturing has been defined by outsourcing, no one has done more to shift global electronics production to China. Little noticed by the wider world, Mr. Gou has turned his company into China's biggest exporter and the world's biggest contract manufacturer of electronics."

Comments

Ah, if only

[Stanistani]

Can I roam amongst the endless rows of bins filled with our disposable electronic baubles? Please?

And unlike so many other Chinese Manufacturers

[Marxist Hacker 42]

He's done so without attempting to poison or kill his own customers.

Re:And unlike so many other Chinese Manufacturers

[plague3106]

I guess you didn't read the article.

They get paid $0.60 an hour (a lot in China), but they also get to live rent free, their food is subsidized, and they have free health care. They also get overtime pay and actually do get raises. I wouldn't mind that deal, if I were just starting out of high school and needed to work.

Re:And unlike so many other Chinese Manufacturers

[Marxist Hacker 42]

You fail to mention that EVERY ONE of those "American companies" buy parts from China- and it's the shoddy, non-unionized workmanship that is failing.

And that the Mattel recall (another American company that hired the Chinese toy company) also covered a heck of a lot more than one product- the recall was 5 PDF pages with pictures of hundreds of different products.

I wonder if the producer of all of those red & yellow Thomas the Tank Engines also killed himself? Or how about the Million Pounds of Fish intended for human consumption that was subject to an import alert this week?

Re:And unlike so many other Chinese Manufacturers

[p0tat03]

Hon Hai is known for paying above the regional average and maintaining safer than average working environments. A far cry from living in a comfortable bungalow in California, but it's certainly much better than the average treatment employees get in China.

Worker conditions

[ktappe]

Note the interviewee who says that while the living conditions have improved since the BBC publicity last year (the "iPod slaves" story), he says the changes are "incomplete" and seemed afraid to go into more detail or give his full name. I really do wish that buying electronics wouldn't mean supporting companies whose workers have to live in slum conditions. But I really don't know what to do short of writing probably useless letters to Steve Jobs and Michael Dell.

Re:Worker conditions

[middlemen]

I really do wish that buying electronics wouldn't mean supporting companies whose workers have to live in slum conditions.

Ok, humanitarian perspective aside. Those workers are now able to provide a their families 2 square meals a day. If companies stop using them, then they go hungry, continue living in slums and you pay more for your beloved techno-gadgets. Right now they are better off than they were earlier and you are happier since you can have the privilege of using an iPod and listening to your choice of music on the go. See win-win scenario...

Re:Worker conditions

[maillemaker]

Something to consider here is that in many cases though the job conditions and pay looks terrible to /you/, the actual workers love it compared to what they had.

This is not to say that we nor they should be satisfied with their present lot in life, but rather to say that things are improving. Their economy is primitive by modern standards. It will grow, rapidly, and working conditions will improve - just like they did in our country.

The answer to helping these people advance is not to stop buying their products, which puts them right back where they were - with nothing. The answer is to continue to buy their products, which empowers them and gives them options.

Re:Worker conditions

[juuri]

Well he did say conditons have improved. This may not mean much to us, but it was already well known that foxconn had some of the best factory conditions in the entire industry over there. Do these conditions really meet what we would consider ideal? No, but an improvement is an improvement. I would submit that most Americans have no idea how bad factory work is, even without our own country. If you want to be truly disgusted by the treatment of workers and the quality of their environment take yourself to the nearest chicken factory or any other "plant" with is obviously skirting the edges of legality.

China moves slow traditionally but as they develop a real middle class, the lower class conditions will improve becaue of increased internal spending and more attitudes similiar to those in more developed nations.

Re:Worker conditions

[Marxist Hacker 42]

Easy- start buying the products that are $5000 instead of $500....that is, the ones that you can verify were made in the USA out of components created from raw materials in the USA.

Re:Worker conditions

[onkelonkel]

I remember my history teacher telling us about working conditions during industrial revolution times in England. Workers (some of them children as young as 6 years old) toiled from sunup to sundown six days a week in dirty noisy horribly dangerous factories for the lowest possible wages.

The point that stuck with me was that hordes of people flocked from the farms to the cities, because horrible as it may have seemed to us, it was still _better_ than the conditions they left behind. On the farms you toiled (men, women and children) from sunup to sundown 7 days a week. Conditions were no less dangerous; farm machines could kill you just as dead as machines in a factory. And on the farm if it didn't rain at the right time, or rained too much, or the bugs came your crop was wiped out and you starved. At least in the mills, as long as you could work you knew you were not going to starve. While "not starving to death" is a pretty minimum standard of living, it sure beats "maybe starving to death"

Re:Worker conditions

[iamacat]

Or you could consider that the US company could easily double their salary, reduce work week to, say, 60 hours and fix the most grievous safety hazards - all at the cost of cutting compensation of top executives by half. Just like we are prosecuting ordinary citizens for patronizing child prostitutes in Thailand, we should start going after companies (and their CEOs) that break US labor laws abroad. 5-7 bucks minimum wage per hour is not to expensive for a company, will help 3rd world countries stand up on their feet rather than being cheap slaves and will give US workers at least a slight chance to compete for jobs.

Re:Worker conditions

[gstoddart]

Ok, humanitarian perspective aside. Those workers are now able to provide a their families 2 square meals a day. If companies stop using them, then they go hungry, continue living in slums and you pay more for your beloved techno-gadgets.

If they were actually all getting better standards of living, we wouldn't be objecting on humanitarian grounds. Yes, they get a better standard of living, we get products. Everyone wins. The fact that they do it for a fraction of what it would cost here, I guess one lives with because it's an actual opportunity for them and they get to move up the economic ladder. Such things are relative to where you live.

But, when one hears stories about what is outright slavery, workers not getting paid at all, and all of that stuff, then one tends to be a little more worried about how ethical these products are. There are regular stories about appalling things happening in Chinese factories, as well as a lot of shady dealings from sub-sub contractors who nobody seems to be accounting for (like, lead in kids toys for instance).

Personally, I would like a little more assurance that the products I'm buying which are made in China actually have a little fairer labour practice than the worst case we tend to hear about. And, I don't think it's too unrealistic to basically tell the companies using these manufacturers that they really need to be sure of such things. I don't begrudge the workers a chance to make a living -- but, I do expect the parent companies to do more than the most superficial due-diligence to Do The Right Thing.

This is an unfortunate side effect of outsourcing (well, one of many) -- you really have no assurances that the people making the stuff you buy aren't being subject to really awful conditions.

Cheers

Re:Worker conditions

[servognome]

Or you could consider that the US company could easily double their salary, reduce work week to, say, 60 hours and fix the most grievous safety hazards - all at the cost of cutting compensation of top executives by half.

Having worked with companies in China, I can say it's not that easy. Because labor costs are low, companies in asia simply throw people to solve problems rather than automating. They easily employ 10x the number of people to accomplish the same job. What would happen with a western style system is 1 person would have US style benefits running machines, and the other 9 would be unemployed.

Re:Worker conditions

[vidarh]

The US labor movement was one of the most militant in the world for decades, because the US government frequently murdered strikers.

US union members DIED by the dozen for our 8 hour working days.

In fact, May 1 as an international day for international labor demonstrations was a direct result of the US labor movements demonstrations for 8 hour working days and the resulting bloodshed.

I find it sad that so few Americans actually know anything about how the US used to be at the forefront of the fights for workers rights, and the large number of lives lost in fighting your government and industry to get the protections you have now. It is one of the things you truly have to be proud of, as it had a significant impact on labor movements worldwide and so directly affected workers rights throughout the industrialized world.

Re:Worker conditions

[iamacat]

If we actually passed laws requiring US based companies to pay 5-7 dollars to workers anywhere in the world, their only option would be to leave the US altogether.

Fine, as long as:

a) The company agrees to follow all Chinese laws and we agree to promptly extradite any executives residing in US to stand trial for any violations. I hear death penalty is common for stuff like environmental accidents and allowing employees to access information about Tinamenn square events through corporate intranet gets you sent to a re-education camp for a few years. Are you actually suggesting that a company should be allowed to avoid laws of ALL countries by shifting people and corporate registrations around?

and

b) The company goods are charged a non-punitive duty to compensate for the loss of tax income compared to a US company paying wages to american workers.

You go, Gou!

[aapold]

Now that Rupert Murdoch owns the WSJ, I would have expected headlines more in line with, say, the New York post.... you know, like....

Don't have a Gou, man!

Holy Gou!

Gouabunga!

Pass Gou, collect $200 (billion)

Is that to Gou?

The world's first living Simpson's episode

[krou]

FTA:

In addition to its dozens of assembly lines and dormitories, Longhua has a fire brigade, hospital and employee swimming pool, where Mr. Gou does early morning laps when he is there. Restaurants, banks, a grocery store and an Internet cafe line the company town's main drag. More than 500 monitors around the campus show exercise programs, worker-safety videos and company news produced by the in-house television network, Foxconn TV. Even the plant's manhole covers are stamped "Foxconn."

Is it just me, or could I replace "Longhua" with "Cypress Creek", "Mr. Gou" with Hank Scorpio, and "Foxconn" with "Globex Corporation", and we'd have the world's first living simulation of a Simpsons episode?

I've heard the Chinese were good at imitation, but this seems to be going just a bit too far ...

Photos and another viewpoint

[The-Bus]

Wired had a great photo gallery of factories and assembly lines in China.

And here is a write-up about someone from Chumby Industries visiting Shenzhen to get their production line up-to-date. It's more about the area than anything about the factory.

your history teacher was wrong

[rodentia]

The people had already flocked to the city because they had been evicted from their pastoral livelihood by the Enclosure Laws. The industrial revolution happened substantially due to the critical mass of effectively starved humans ready to make the toil economically and emotionally feasible.

And there were no machines on the farms until the late nineteenth century.

Bread only becomes critical on the farm when the cities find it necessary to keep their machine-minder's bellies full. I am not saying the expropriation of labor by capital is not essential. There is no interpretive value in pretending that it is something other than it is for the sake of whitewashing the motives of the haute bourgeoisie.

No joke, do it! Learning Chinese is easy...

[The Underwriter]

I've been teaching myself Mandarin Chinese for 6 months now. Some reasons why you should pick it up:

- It's way easier than Westerners make it out to be...similar sentence structure to English, and the verbs stay the same between different tenses. No conjugations, declinations, etc. In many regards it's much easier than "Romance" languages.

- You will be able to communicate with a quarter of the world's population.

- Though there are 13 different dialects of spoken Chinese, they all share the same writing system. You get to read and write 12 additional languages for free. Japanese uses many Chinese characters, too.

- Because it's so hyped as the world's most difficult language, your Western colleagues and employers will think you're a freakin genius. Imagine having "Fluent in Chinese" on your resume?

- Future study in languages more closely related to English will become comparatively easy. You'd be surprised how much French, Spanish, and German you already unknowingly speak on a daily basis.

- It's utterly fascinating to learn, especially the characters.

- If you can't beat 'em, join 'em.

If you want to get the hang of Mandarin Chinese quickly, Pimsleur is hands down the absolute best.

Re:No joke, do it! Learning Chinese is easy...

[nneonneo]

There are *far* more than 13 mainstream dialects of spoken Chinese. For the most part, you need to know Mandarin, and if you want to live in Hong Kong, Cantonese would be an asset. However, there are close to 30 mainstream dialects of Chinese (more, even, by some counts) -- one for each province. Better yet, counting regional dialects (which are different enough to be counted as dialects and not accents), there may be well over 100 dialects of Chinese. Learning Mandarin, though, gives you the ability to converse with about 95% of the mainland Chinese population more-or-less fluently. Tonality in Chinese is probably the hardest thing to learn. Grammar in Chinese is quite simple, as parent noted.

indentured servitude in china

[fliptout]

Really, these "amenities" are almost standard here in China. In many places that use unskilled labor, the workers live in a dormitory and have access to health care, ie shitty public hospitals or clinics.

They've got access to genuine 1960s era medical technology there, which I suppose is better than medical tech from the Qin dynasty that is available in the boondocks. That is, if people don't just watch you die.

Workers typical have access to low cost/free housing too, which consists of crappy temporary concrete buildings. I'm sure Chinese business owners have a paternal warm fuzzy when taking care of their workers, but don't let the the "spin" of how great the workers have it get to you. The conditions totally suck here.

The Chinese pride themselves on their ability to endure hardship, but the other side of the coin is that they are ignorant of what a better life is like AND they are fairly passive as a people. Change is going to be a long, frustrating progress here. Honestly, I don't think China would be progressing so fast if they weren't being given oodles of money on a silver platter.