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Foxconn Building Factories In Indonesia 75

Posted by samzenpus
from the taking-the-show-on-the-road dept.
jfruh writes "Chinese electronics manufacturing giant Foxconn is building factories in Indonesia, and upon hearing the news you might be tempted to think the company is simply moving into labor markets where it can find cheaper employees. But in fact, the Indonesian factories will specifically produce smartphones and computers for Indonesians; the country has almost as many people as the United States, but smartphone penetration there remains low."
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Foxconn Building Factories In Indonesia

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  • funny - Foxconn is reported as being Taiwanese, not Chinese... hello??
    • You do know that the official name of Taiwan is 'The Republic of China' and that it's mostly comprised of ethnic Chinese, right? Apparently not...

      • Technically, you are correct. However, you should ask those who come from Taiwan (or even those who live in Taiwan) -- Are you Taiwanese or Chinese? You would be surprised by their answers that Taiwanese != Chinese (so it could be used to imply Taiwan != China).
      • by mjwx (966435)

        You do know that the official name of Taiwan is 'The Republic of China' and that it's mostly comprised of ethnic Chinese, right? Apparently not...

        And (_)is/(_)isn't considered a province of China, depending on who you ask.

    • Foxconn was started in Taiwan by an ethnic Chinese [wikipedia.org]. However most of their factories are presently located in mainland China.

  • This list [wikipedia.org] seems to indicate comparable penetration with other Asian countries.

    Can we be sure it's not about the low wages?

    • Well, mobile phone != smartphone
      They could have millions of Nokia 1100 for all we know (with that data).
    • It's probably because of low wages too. I remember when I was in Malaysia I was with someone who dropped off some wages for Indonesians working in a Malaysia factory. Now I worked out the hourly rate and when I went back to Taiwan I mentioned it to people who know about things and they were surprised it was lower than someone doing the same job in China.

      So a lot of Taiwanese companies like Foxconn are adopting a "China+1" strategy for manufacturing, i.e. factories in China plus one other lower wage country

  • by ILongForDarkness (1134931) on Monday February 10, 2014 @10:16AM (#46209561)

    In China they can treat people like virtual slaves but in Indonesia they can get actual slaves (people who bought a job from a dealer and came over from say Thailand only to have their passports taken by their new bosses and all their salary taken as interest on the loan, cost of rent for their on factory dormatory etc). I think we should seriously consider whether outsourcing is worth it. Companies make small concessions to "cultural differences" in labor practices in overseas markets. Those companies make "small consessions" when they outsource to regional players, etc. Eventually you have children working in illegal mines at gun point in a forest somewhere. I really don't the latest iCrap that bad.

    • US and Europe in the 1980s: If you wanna sell here, you should make here.

      China, India, Indonesia, Brazil: Fair enough a rule.

      • China, India, Indonesia, Brazil: Fair enough a rule.

        No, they don't just want to make it locally for local consumption. If they did I'd think it reasonable.

        • Exactly. Especially with China: they want to make yours and theirs too. Ie make it hard for foreign companies to sell there without a local partner but they are of course okay selling their crap to you.

    • I really don't the latest iCrap that bad.

      Would you be willing to pay an extra $4 for a product not made with slave labor? That's the estimate of how much more it costs to make the Moto X because it's done in the US.

      • Really? You could pay everyone involved in the entire production chain (raw materials to sub-assemblies to final assemblers/packers) a non-slave (AKA 'living Wage'?) by increasing the retail price of an iPhone $4? I find it hard to believe - please explain.

        And, when talking about price for something like an iPhone (as one example) remember there are many different price points:

        Price of an unlocked iPhone to an individual

        Price of a locked iPhone sold in bulk to a carrier/retailer

        Price phone company (Apple, M

        • by swb (14022)

          It's almost believable depending on sales volume and what's considered a non-slave wage and how many get the extra money.

          A cursory Google search showed that Samsung sold 40 million Galaxy S4s. The phone was introduced in March 2013, so if you figure 50 million units in a year, that's $200 million dollars in annual salary to disburse. If the number of affected workers is 10,000, that's $20,000 in supplemental pay.

          That doesn't seem totally unbelievable, especially considering $20,000 per year in salary is

        • Really? You could pay everyone involved in the entire production chain (raw materials to sub-assemblies to final assemblers/packers) a non-slave (AKA 'living Wage'?) by increasing the retail price of an iPhone $4? I find it hard to believe - please explain.

          Please explain why you find that hard to believe. Is it because you've unquestionably accepted the "everything is so much cheaper to make in China" line? If cheap labor was always the key to less expensive products, the Industrial Revolution never would have happened. See, for example, GE's experience with their hybrid hot water heaters, where moving the manufacturing back to the US and properly designing it for manufacturability (using information and design suggestions from the assemblers themselves) actu

      • by phmadore (1391487)
        Personally, I tire quickly of business telling me that labor is their highest cost. They are taught in school to minimize the cost of labor, but in the end, you're talking about, for a good job, about $120 a day per work (that's $15 an hour, about twice the bullshit minimum wage and about what you need, in my experience, to comfortably raise a family). If you have 100 workers, you're now talking about $12,000 per day, times 365 is around 4.4M per year. If you have 100 workers and you cannot find a way to ma
        • by phmadore (1391487)
          Problem with my formula: it does not account for sick days or weekends. It is the worst case scenario, with every worker working 56 hours a week instead of 40. I should just keep quiet.
    • by mjwx (966435)

      In China they can treat people like virtual slaves but in Indonesia they can get actual slaves (people who bought a job from a dealer and came over from say Thailand only to have their passports taken by their new bosses and all their salary taken as interest on the loan, cost of rent for their on factory dormatory etc).

      I take it you don't know much about SE Asia.

      Thailand is one of the better off nations, comparatively speaking. In fact, Thailand has a big problem with illegal workers hopping over the border from Myanmar (Burma) and Laos (which Thai businesses are more than happy to give the worst jobs to). The "guest workers" in Indonesia are more likely to be Burmese, Laotian, Cambodian or Filipino but the workers will be mostly Indonesian as Indonesia is a big place and some islands/provinces are worse off than other

  • How can a company as big as Foxconn think that the way to improve smartphone sales in Indonesia is to start mass producing Blackberries in Indonesia? Can't the Indonesians just skip Blackberries and go straight to Android? I'd recommend iPhones, but I doubt many Indonesians, living on $4,000 a year, could afford a phone that costs about two months wages. http://www.nationmultimedia.co... [nationmultimedia.com]
    • How can so many Americans, themselves living on government handouts and public assistance 'afford' iPhones that several hundreds of dollars?

      • by Qzukk (229616)

        Simple: they bought the phone before they lost their job and their house, and now they keep it just in case some company decides to take pity on them and hire a homeless bum, so they'll get the call to come in for their interview.

      • How can so many Americans, themselves living on government handouts and public assistance 'afford' iPhones that several hundreds of dollars?

        Just doing a quick google search, it looks like the average single person on welfare can receive ~$300 a month. That's not including food stamps, medicaid, or housing assistance. Not to mention that a LOT of people living off welfare are defrauding the system by hiding assets, income, or additional support they receive from others. Around here, it's not uncommon for a woman to go on welfare/food stamps/medicade/housing support, while her live in boyfriend goes to work at some retail location. All of her

        • by jrumney (197329)

          Just doing a quick google search, it looks like the average single person on welfare can receive ~$300 a month.

          That's minimum wage in neighboring Malaysia, which employs many Indonesians as factory, construction and domestic workers.

    • You can't imagine a lower-priced blackberry custom made for the Indonesian market?

  • by mandark1967 (630856) on Monday February 10, 2014 @10:24AM (#46209603) Homepage Journal

    "Foxconn Building Factories In Indonesia"

    Wow! Foxconn has factories dedicated to constructing buildings?!?!

    I bet the assembly line is frikkin HUGE!

    Now the workers don't even have to go outside to jump to their death! They can just jump off the assembly line!

  • Foxconn is Taiwanese, not Chinese. That's an essential distinction because neither the Taiwanese government nor their businessmen have any allegiance to the People's Republic of China. The fact that they've torn down a lot of barriers to travel and business is primarily due to opportunities for profit.

    Taiwan still has a strong manufacturing base and like most other countries shifting manufacturing to China because it was cheaper. The fundamental driver, was cheap labor and overall lower cost of doing busine

  • b-e-c-a-u-s-e t-h-e-y w-a-n-t t-o s-e-l-l a-l-l t-h-e u-s-e-r d-a-t-a t-o a-d-v-e-r-t-i-s-e-r-s
  • by lkcl (517947)

    i heard that taxation on electronic "luxury" goods is at an insane level in indonesia, resulting in grey imports and smuggling. building a factory in indonesia would be a simple way to get round the problem.

  • Since when are they Chinese ?!

    Hon Hai Precision Industry Co., Ltd., trading as Foxconn Technology Group, is a Taiwanese multinational electronics contract manufacturing company headquartered in Tucheng, New Taipei, Taiwan. Wikipedia
    Stock price: 2317 (TPE) NT$81.70 +0.30 (+0.37%)
    Feb 10, 1:30 PM GMT+8 - Disclaimer
    Founder: Terry Gou
    Founded: 1974
    Headqhttp://slashdot.org/story/14/02/10/138219/foxconn-building-factories-in-indonesia#uarters: New Taipei, Taiwan
  • Criticize the technical merits all you like, but Mozilla's partnership with Foxconn to produce inexpensive phones may turn out to be very strategic (for both parties).

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