Foxconn discussing the possibility of price hikes to offset wage increases
By Donald Melanson 
posted July 22nd 2010 2:47PM
posted July 22nd 2010 2:47PM
posted July 22nd 2010 2:47PM
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is surprised
@BrianH Your thumbnail confirms your statement.
@BrianH
They raise the wages for their workers and you are surprised that their product prices go up? Wait... I smell irony
There is too much sarcasm in these comments.ctivity.
@ryan420
Fail.
Clicked submit and it must of copied and ctivity. pooped onto the end of my sentence.
@ryan420
Wow, do I wish I could delete my own comments.
*facepalm*
Stop confusing your readers. The wage increases were spurred on by Engadget's misleading stories of worker abuse and mistreatment which, by the way, contained absolutely no info or eyewitness accounts of abuse.. Furthermore, Foxconn was incentivizing the destructive behavior by paying cold, hard cash to the families of suicide victims,
Own up and admit it: Engadget ran stories about Foxconn and as a result the wages (and prices) went up. While you're at it, take ownership of the thousands of jobs you cost those Chinese workers. Vietnam thanks you.
@Joseph Mama
Yes, Engadget wields the ultimate power of the universe.
Behold: Engadget. Destroyer of worlds! And secretive, questionable factories in China! Destroy, Engadget, Destroy!
@BrianH : I would give that girl in purple a BIG wage increase. (call me!) :)
@BrianH
Haha, yeah, this was so predictable :D
@BrianH
why not just tell apple to earn less and gave more to worker.
@BrianH I HATE babies
@techlord
Considering Apple's huge profits, that doesn't like a terrible idea.
@BrianH
I'm not, even though it MAKES NO SENSE!
An employee making $200 a month bumping up to $220 a month is not a cost you need to pass on to the consumer when:
1) The CEO Steve Jobs is one of the richest men on the planet.
2) The company has posted record profits, not revenue, record PROFITS.
3) The market price of the product is clearly divorced from the cost of manufacture ($600 sale price vs $220 to make, and again see #2 as clearly profit margins are already VERY high).
There is no need to pass these minimal costs on to the consumer.
Reduce the profit margin to sane levels, and a tiny pay cut to Steve Jobs alone, yet alone everyone on the board could probably pay for the wages of these Foxconn employees for the next ten years.
@Ducman69
Only the hardware costs $220. Designing software and actually engineering the device among many other costs like the ones associated with R&D are things you completely forgot about. FOXCONN should be the ones taking the heat, not Apple. Besides, odd to anyone that only Apple is singled out here when we're talking about a manufacturing company that supplies to many large electronics giants?
Except, they aren't raising wages. Foxconn increased hourly rate, but also increased hourly production quota. There are no real cost increase to them. The workers won't see that extra payment from Apple to help cover the cost either. Taiwanese business people, the bigger they are the more shameless they become.
@BrianH
ssssssssssssssssssssssshady!
@Chibi Chaingun
"Only the hardware costs $220. Designing software and actually engineering the device among many other costs like the ones associated with R&D are things you completely forgot about"
Apple has record PROFITS, again, not revenue, PROFITS.
What about this is so confusing to you? Yes, there are other costs involved. Whatever they are, they are far below the selling price, as evidenced by the insane profit levels despite a relatively low volume sales model.
@Ducman69 Except that Dell, HP, Sony, Acer, Asus, are all much larger customers for Foxconn, and a lot of their products have smaller margins.
Apple gets all the headlines because of their popularity, but their total contract with the Foxconn pales in comparison with their high volume competitors.
Well, that's what everybody wanted, right? Right..?
@FyreFlareon Wait till the bleating starts
'Its too expensive'
@FyreFlareon
Yes. Things need to be more expensive, especially electronics. Maybe then they won't be made so disposable.
This Walmart culture we've become used to needs to end.
@FyreFlareon
When your company is posting profit margins at the level of Apple, there is no reason they can't diver a TINY fraction of those profits towards reasonable wages and working conditions for your employees.
The idea that the cost has to be passed on directly to the consumer, as if profit margins were to unbelievably small and tight that they couldn't absorb it, is idiotic.
@Missing Matter
You mean this culture where everyone has virtually unlimited access to entertainment and news? Heaven forbid every person is allowed in on the playthings of the Bourgeois.
I agree that we need to find ways to reduce our waste, and the WalMarts of the world certainly do hinder societal progress as a whole, but the answer isn't promoting elitism by saying it's a good thing that things are made more expensive and therefore harder for already strapped people to modernize in hard times.
Do you care to guess how much our already ailing economy would suffer if the consumerism it lives on were to rapidly end?
Apple has indeed diverted a portion of profit to the workers, 1-2% of each iPad's profit is suppose to go to worker wage. However, foxconn had kept it all for itself. They increased hourly wage, but also increased hourly production quota that workers must meet by the same ratio. They had no real cost increase, but now gained a card to play to increase prices. Real shameless people they are.
@Missing Matter Well stated. No one gets the damage they do to the domestic job market, long term wage and working standard trends, environmental pollution and other problems that come with shipping production to overseas sweatshops.
Good for them!
@ashleythehottiest why? foxconn raises their prices, companies go elsewhere for manufacturing, and more foxconn workers lose their jobs.
Wow, as if they wern't making enough money...
@Scrubs
Yes, I want to start a massive global business, and I don't want to make any money from it.
Clearly raising wages affected the bottom line to the point they need to balance out the wage increase, which when spread across several HUNDRED THOUSAND workers, adds up to quite a bit of a chunk of change. You can't expect a business to just eat that kind of expense without repercussion.
Yeah ... the higher-ups don't like it when a small percentage is taken out of their salaries.
Oh no. The price of my iPhone that doesn't work as a phone is about to go up!
@apbaseball
Apple can afford to absorb this price increase. It's the feature phones and netbooks and other super low priced products that will suffer the most. While a $10 increase in price for MacBook Pros could easily be absorbed by Apple without hiking prices, a $10 increase in the price of a netbook would require the price of the netbook to increase by $10.
@ashwinkn I know..I know..I was being facetious.
Watch the apple-shaped cloud of dust.
Or weep at the price of the iPhone 4S
@iucidium
I don't know about that but it's pretty pathetic that we all want cheap/inexpensive products (shirts, shoes, electronics) and it comes at the expense of these people. Obvious reason there aren't a lot of factories in the US. Walmart would go belly up.
Who knew laying people off to move their jobs to another country was the best way to prevent work related suicide.
@Oversteer
Well, at least the suicides won't be work related.
Would be kinda weird to hear China complaining that all the good jobs are going offshore.
Translation: "All your iPhones are belong to us, unless..."
Cheap bastards...pay your employees decent wages and you'll still rake in billions every year. No need to increase product prices
@ryanbballer54
Foxconn and other contract manufacturers actually operate at razor thin margins. They need to raise prices.
@ashwinkn
Actually they had close to 2billion in PROFIT last year. That's not razor thin that's just corporate greed.
@DefPoet
2billion what? Dollars? Yuan? Wing-wangs? You need to specify.
And, 2 billion profit on what kind of revenue? If it took 200 billion question marks to generate 2 billion in profit, that's a 1% profit. You're almost operating at a loss.
@Joseph Mama
according to this article foxconn raked in 39-121 million in the past years.
http://www.nasdaq.com/aspx/company-news-story.aspx?storyid=201004151127dowjonesdjonline000597&title=foxconn-international-2009-net-profit-drops-68to-us3859-million
Well at least they got a raise!!
Looks like iPhone will be come... less affordable. Can't wait for Steve Jobs to talk about this!
@sluzorz
who cares about jobs, this will raise the price of many electronics.
just because some bleeding heart hippies "felt bad" about the price of their devices, when they could have just stopped buying the crap.
now all of us have to suffer because suicides (which were below the national average) were over exaggerated.
@BrianH
The fact that you exude arrogance and selfishness is pretty pathetic. It also leads me to believe if the suicide rates were higher than the national average and could be linked to something Foxconn was doing you still wouldn't give a damn, because you are arrogant and selfish. It isn't that I have a problem with what you are arguing over, or that I do have a problem with what you are arguing, it is that I have a problem with your attitude. You are the problem with this world, not you specifically, but your attitude. You spread it to everyone else because you see nothing wrong with it, and then everyone else thinks it's OK because being selfish is what they wanted all along but they wanted to make sure it wasn't a social sacrifice. Then those who don't follow along become "bleeding heart hippies" and you attempt to paint them in a negative portrait because these "bleeding heart hippies" think what you are doing is wrong. Stop whining like a baby because "all of us have to suffer because (of) suicides", its a damn shame you have to pay $5 extra for you shit iPhone so you can call your other self absorbed friends who also had to pay $5 extra for their shit iPhones just so people wouldn't kill themselves because they were being treated unfairly.
@DarrellJ88
no dude, you have me totally wrong.
I hate iPhones.
@sluzorz
The iPhone was never affordable to become less affordable. So given iPhone owners are not penny pinchers, this should not at all affect sales.