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Apple supplier Foxconn vows to boost salaries and cut hours

Facing complaints about factory labor practices, Foxconn chairman Terry Gou is pledging more pay but fewer hours.


Foxconn is promising to be more worker-friendly after finding itself once again on the hot seat over labor issues.

Chairman Terry Gou told Reuters yesterday that "we are saying now in the company, 'you work fewer hours, but get more pay.' We won't stop here and will continue to increase salaries."

Gou, who spoke at the 2012 Boao Forum for Asia in China, was reacting to questions over last week's audit from the Fair Labor Association. That audit uncovered a number of violations at three Foxconn factories in China.

In just its initial report, the FLA found that Foxconn workers were putting in more than 60 hours per week, while many were working seven days a week without a day off. The report also discovered that workers were not being fairly compensated for overtime or even for the cost of living in Shenzhen and Chengu, where the factories are located.

In response, Foxconn said it would reduce the number of hours required by each worker to 49 per week starting July 1, 2013. That announcement triggered concerns among many in the factories who said they wouldn't make enough money if hours were reduced. So now Gou is trying to address those concerns with his latest promise of fewer hours and more pay.

To reduce the pressure on existing factories and workers, Gou has been looking to extend his reach into other countries. The chairman said that Foxconn would continue to invest in Brazil to move more manufacturing there. The company has also been putting money into facilities in Vietnam, though the effort there has been limited compared with its operations in China.

Or course, Foxconn has been criticized in the past for some of the same labor issues but has so far failed to rectify the situation.

"Apple's own auditor has now confirmed that Foxconn never corrected the violations in areas like excessive overtime that were first exposed six years ago," said Scott Nova, executive director of the Workers Rights Consortium, a labor-rights group. "It seems that the only penalty for Foxconn is the obligation to promise to do better next time."

But in light of the increased public focus on Foxconn and the potential damage to Apple's reputation, Nova is holding out some optimism that this time may be different.