Foxconn to shift some plants in China

BEIJING, CHINA: Electronic giant Foxconn Technology Group, which was in trouble following a series of employee suicides, has plans to shift some of its production units from southern Shenzhen to other parts of the country to save costs, a report said on Thursday.

The company has plans to shift some production lines out of Shenzhen to tap more business opportunities on the mainland and save on production costs, a senior company official told China Daily.

The new facilities, however, will not completely replace the Shenzhen plant, where some 420,000 workers are employed, said the official who did not want to be named.

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Insiders said many production lines will remain in Shenzhen due to the zone's ideal geographical location and advanced transportation facilities.

Foxconn's subsidiary plants in Shenzhen, which assemble iPhones and iPads for Apple, will not be affected by the company's plan to shift north, a source said.

Foxconn, whose parent company is the Taiwan-based Hon Hai Group, is a major supplier to Apple, Sony and Nokia.

Terry Gou, chairman of Foxconn Technology Group, reportedly told workers that the relocation of some production lines is an "important strategic move" and those who follow the call will receive additional subsidies. The company had recently hiked the salary of the employees, following the suicides.

A worker, surnamed Dong, said many workers have been told they will be relocated. "But, at the moment, we're still unclear where we will have to move," Dong said.

According to a Xinhua report earlier this week, Foxconn will build a new plant in Zhengzhou, capital of Central China's Henan province.

The company and local officials are working on the details to build the new facility, which will employ as many as 300,000 employees in the future, the report said.

Zhengzhou authority has allocated land and launched a massive recruitment drive for the new plant.

The firm also plans to hire more than 100,000 employees for its new Chengdu production base with an investment of $5 billion, the West China Metropolis Daily has reported, citing an agreement between Foxconn and the local government.

In addition, Foxconn's Tianjin base recently contacted the investment department of the Binhai New Area government about expansion, an anonymous official from Tianjin municipal government told China Daily in an earlier interview.

Foxconn is also negotiating with relevant departments in Langfang, Hebei province, to build a plant, according to local media reports.