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Two factories, two fates: Foxconn ascends on cheap labor, Sharp hangs on

Jay Alabaster and Michael Kan | Sept. 28, 2012
Shige Watanabe remembers the boom days.

Foxconn's Zhengzhou complex employs over 120,000 and is absorbing the land around it as it grows, generating what feels like an entire city out of what was recently rural farmland.

Li, a 22 year old who asked to be identified only by his surname, started working at one of Foxconn's Zhengzhou factories eight months ago, drawn by recruiting ads displayed in his home city of Jincheng, located in a neighboring province. "There were a lot of employment ads for Foxconn," he said. "The government is really promoting these jobs."

"Foxconn's wage is higher than most other factories," he said. "The pay is good and so are the benefits."

In August, Foxconn increased its base monthly wage to 1800 yuan (US$284), up from 1550 yuan. Company workers interviewed, however, said they generally make around 2,600 yuan from the additional overtime worked.

In Yaitai, a 53-year-old Sharp employee shrugs when asked about the future of the factory where he has worked for three decades.

"I joined simply because I thought it was a big company that would grow," he said. "Now it doesn't really matter what I think, I'm here until the end."

The average monthly wage for a worker at a Japanese electronics factory was ¥346,000 (US$4,455) last year, about ten times what Foxconn workers make with overtime. Sharp employees interviewed for this story declined to provide their names or exact salaries, citing fear of repercussions in the small town where they live and work, but all made it clear they see their employment as a career.

"I joined because I'm interested in solar panels," said a 26-year-old man who entered Sharp four years ago.

"I haven't had a chance to work on them yet, but eventually I hope to transfer to headquarters, and maybe that will be my chance."

In Zhengzhou, workers generally take a different view.

"This job is not something I want to do in the long term," said one 18-year-old high school student, employed at Foxconn's Zhengzhou factory as part of an internship organized by his teacher.

"It's summer, so we work for two months and then go back to our hometowns," he said, declining to give out his name for fear of punishment for speaking to a reporter.

While Foxconn is increasing wages and recruiting workers to Zhengzhou from across China as it expands, Sharp has cut salaries, asked for early retirement volunteers, and transferred hundreds of workers out of Yaita to factories in other parts of the country. The Japanese company said Wednesday its unions had agreed to an across-the-board seven percent wage cut from next month, along with a ten-percent reduction in salaries it has put in place for management.


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