Foxconn announces changes at Chinese worker rally

Foxconn claims to have been 'blinded' by its success

Chinese electronics supplier Foxconn has responded to concerns over suicide levels among its workforce, using a workers' support rally to announce a restructuring of its manufacturing base.

Louis Woo, special assistant to the chief executive of Hon Hai, which also trades as Foxconn, said at a rally of 50,000 staff, some with banners reading 'Cherish Life' and 'Mutual Love', that the company had suffered problems by growing too fast.

"For a long time, we were kind of blinded by our success," Woo said, according to a report on Reuters. "To be very frank and open, I think we were caught by surprise by the structural changes in the worker composition."

Foxconn will increase its workforce by 40 per cent over the next year, said Woo, but will build smaller factories closer to workers' home provinces. The first two will be built in Henan and Sichuan, two of China's more populous areas.

"Recently we have found that workers prefer to work in their home provinces, " said Woo. "In the short term, it will definitely have some impact [on profitability], but we can overcome this by improving processes or having better workers."

Staffing levels at the two Shenzhen mega-factories, where most of the suicides occurred, will be cut from 470,000 to 300,000. The factories will also focus less on pure production and more on research and development.

The spate of suicides caused Hon Hai's stock valuation to fall 20 per cent at the height of the crisis, when the company's customers, including HP, Dell and Apple, began investigating working conditions at the factories.

Apple chief executive Steve Jobs said at the time that the plant was "a pretty nice factory".