Foxconn: When Workers Dream of a Life Beyond the Factory Gates
Foxconn: When Workers Dream of a Life Beyond the Factory Gates
TO GET some idea of the scale of Foxconn’s Longhua campus in Shenzhen, in southern China, a visit to its massive central kitchens is all that is needed. They lie at the heart of this sprawling complex of factories, dormitories, sports facilities, banks and stores built by the secretive Taiwanese-owned firm. The food-preparation centre, spread over 12,500 square metres on four storeys, goes through three tonnes of meat a day as it prepares grub with military precision.
The enormous scale is to be expected, given that Foxconn (also known by its parent company’s name, Hon Hai) is the world’s largest contract manufacturer. The Longhua campus, covering 2.5 square kilometres, employs 240,000 people. Across China, it employs 1.4m on 28 campuses (see chart). Nor, given the firm’s prowess at churning out gazillions of gadgets like Apple’s iPhones, does the kitchen’s efficiency come as a surprise. Tens of thousands on each shift pay for meals swiftly by swiping cash cards loaded with 400 yuan ($64) a month in food credits.
The only things more impressive than the size of the canteen’s woks—more than 1 metre wide—are the firm’s spectacular growth and outsized ambitions. In the past decade it has gone from being one of many invisible firms in the electronics supply chain to the world champion of flexible manufacturing. Barclays, a bank, forecasts that the company’s revenues will exceed NT$3.9 trillion ($134 billion) this year.
Foxconn is investing heavily to expand in the interior of China. By the end of this year its newish facilities in Zhengzhou, in Henan province, will employ more workers than the Longhua campus. It is also expanding in Brazil and Mexico. There are rumours it might even open a factory in America, since Apple, its biggest customer, has just declared that it plans to have some of its Mac computers made at home. Rich-world companies looking to follow suit, “reshoring” jobs back home, are struggling to find enough skilled manufacturing workers; Foxconn could apply to Americans its extensive experience of training Chinese workers from scratch. It admits it is “exploring the opportunity”.
More strikingly, Foxconn believes it can double in size yet again. Executives talk of becoming one of the world’s top 20 businesses. This is no fantasy: Barclays foresees Foxconn’s revenues growing by 15-20% a year in the coming three years. There are two main obstacles to sustaining such growth: finding and retaining good workers in China, and improving the firm’s anaemic profit margins. Both problems will only be aggravated by growth.