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Foxconn's Founder Opens Up About Making iPhones

Posted by Soulskill on from the piece-of-the-apple-pie dept.

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."

11 of 384 comments (clear)

  1. Exploitation for the win! by jandrese · · Score: 5, Insightful

    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.

    He's basically worried that if he tried to pull the same shit he gets away with in China, he would be shut down. This is undoubtedly a valid concern, but it does cast a depressing light on outsourcing. Basically the US is losing manufacturing jobs because we don't let business completely stomp all over the rights of the workers anymore.

    --

    I read the internet for the articles.
    1. Re:Exploitation for the win! by MBCook · · Score: 5, Insightful

      Really? I read that line as a worry of a massive unexpected cost. If you can automate a whole factory, and then the UPS guy says he gets injured on your premises, you can lose 20 million easy.

      No one would run a factory that was, even with the supposed horrible conditions, in the US. The labor costs alone (even if you only paid minimum wage or less) would be staggering. You'd replace as many people as possible with robots to keep costs down.

      But then someone decides to sue you for something ridiculous, and your legal bills are huge. You settle or spend years spending tons of defend it. Or maybe it's a real issue, but instead of the $30k for medical bills and more for pain and suffering, they get some some like $10 million that is completely out of line relative to their injury.

      His view sounds rather sane to me. And the last pages of the article point out just how good Foxcon is compared to many other Chinese employers. Conditions there don't sound anywhere near as bad as some of the stuff that when on in the US during the industrial revolution.

      --
      Comment forecast: Bits of genius surrounded by a sea of mediocrity.
    2. Re:Exploitation for the win! by vux984 · · Score: 5, Insightful

      You want to do something that threatens the endless supply of cheap, pointless shit lining the shelves at WalMart? I think you underestimate the popular consumer backlash that would create.

      Meh, the consumer backlash would sort itself out, due to the sudden rise of employment, manufacturing, and so on in the US. They'd piss and moan that tube socks cost more, but they'd get over it. Once upon a time we used to repair holes in socks and other clothing instead of chucking it an buying it new...this is thanks to the absurdly low cost of new thanks to exploited labour.

      It really wouldn't be the end of the world if we returned to a paradigm where things initially cost more and got repaired instead of replaced.

      The real backlash would come from Walmart and the other corporations.

    3. Re:Exploitation for the win! by spun · · Score: 5, Insightful

      I'm sick and tired of the rich blackmailing us like this. We do not need them. Where would they go, anyway? Would they really be willing to give up such a lucrative market? If they leave, it's not as though the demand for goods and services disappears. We really don't need their investments. We can borrow from ourselves and pay it off by growing our economy.

      --
      - None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
    4. Re:Exploitation for the win! by spun · · Score: 5, Funny

      You like playing host to parasites, I get it. Might I suggest you move to Somalia? There aren't any pesky laws keeping the parasites off you over there.

      --
      - None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
    5. Re:Exploitation for the win! by spun · · Score: 5, Insightful

      Some imbalance in wealth is not only unavoidable, it is desirable to most people. In my experience, people like it when excellence is fairly rewarded, even if they know they themselves are not excellent. People who aren't hypercompetitive assholes, anyway. Equality of opportunity should be maintained, but it is equitable, not equal outcomes I am looking for.

      When we as a society allow too much of an imbalance in ownership to occur, we can not maintain a true democracy, and we can not maintain a true free market. That kind of imbalance necessarily means that the rich do not play by the same rules as the rest of us, and it is a fantasy to think they do.

      --
      - None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
  2. that's one way to see it, here's another by tacokill · · Score: 5, Interesting

    or....
    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?

  3. Re:Where's my anti-Foxconn? by thePowerOfGrayskull · · Score: 5, Insightful

    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.

    Because you and the other twenty people willing to do this do not a market make.

  4. Re:Plus by Fred+IV · · Score: 5, Insightful

    the US isn't a corrupt 3rd world country that you can bribe epople to get your way.

    True...we're a first world country where you can have lobbyists bribe people for you to get your way instead.

  5. Re:he's not a modern day Henry Ford by homer_s · · Score: 5, Informative
    Ford wanted his workers to have a living wage, to be able to afford the products they made.

    From http://cafehayek.com/2010/08/fording-the-gorge-between-fiction-and-fact.html:

    Ford raised workers’ wages for two reasons, neither of which had anything to do with raising consumer demand for his automobiles. The first reason was to reduce worker turnover. In 1913, the year before the $5 wage was announced in January 1914, the average Ford employee quit after less than four months on the job. A workforce so unstable and inexperienced prevented Ford’s factories from achieving peak efficiency.

    Second, because the $5 wage was conditioned upon Ford’s workers learning English, as well as their steering clear of alcohol and gambling – conditions monitored by Ford executives visiting workers’ homes! – the higher wage was an incentive for workers to be more reliable and productive while on the job.

    In short, Ford was something of an early supply-sider. He understood (at least in 1914) that the key to economic growth is not in giving people stronger incentives to spend but, rather, in giving people stronger incentives to produce.

  6. Please, read the fine article, it's worth it by acid06 · · Score: 5, Informative

    You'll notice that even though by western standards Foxconn has a terrible work environment, they're actually the best option for Chinese workers, who queue to work there.

    Even though the salaries seem low by western standards, Foxconn pays the higher salaries in China. The article mentions several people who are there only to earn some money for a while and then go to work on a lower-paying less-stressful business.

    The man himself started his huge empire with a $7500 loan. Hell, I live in Brazil and you can't even begin an auto repairshop with this money here, let alone a small manufacturing plant.

    By Chinese standards, Foxconn is great and they actually seem to care about their employees more than the other Chinese companies do. None of the workers are afraid to complain and lose their jobs or anything like that and even strikes happen (and people continue employed).

    Honestly, you should just enjoy your cheap electronics while you can because this isn't going to last forever as a newer generation of Chinese people is growing up (also mentioned in the article) and they will want better standards of living - no one needs to take care of them, there's more than a billion of them and they can take care of themselves.