… The bulk of the Taiwanese electronics manufacturer’s Chinese staff at iPhone plants in southern India were told to leave, in a move that began about two months ago, the outlet said, citing people familiar with the matter. At the moment, only support staff from Taiwan are in India, the report said.
The reason for Foxconn’s decision to send the employees back is unclear; however, it comes amid reports that Chinese officials verbally urged regulatory agencies and local governments to restrict technology transfers and equipment exports to India and Southeast Asia, the report said.
This move may be an attempt to discourage companies from shifting manufacturing operations away from China, according to industry watchers. …
A forced decision to avoid creating lower-cost competitors offshore may cost Foxconn executives something through foregoing a short-term boost to their stock options – but if it saves jobs & tax revenue in Taiwan & China, they may in future be grateful.
What will this do to Apple’s plan to make “American” iPhones in India instead of China, if Indian-made phones begin to lag behind the technology & quality of competing Chinese brands? Methinks the longer-term costs of Apple’s offshoring are going to begin to bite harder.
China has always had restrictions on moving capital out of China. We spent months going through the arduous process used to get approval to relocate a $40,000 piece of equipment.
My experience was that only the US will work to get a manufacturing process to work in a foreign country. All other countries are nationalistic. Therefore, I wonder if the Chinese employees were actually causing problems instead of helping and Foxconn decided to get them out of the way.
One interesting thing is that Apple forces their suppliers to sign agreements that basically say that in an event where the supplier is disrupting the manufacturing of their product Apple can take all information from the supplier and give it to another supplier. There is also a penalty. The penalty in our case was greater than the sales to Apple.
I wonder if these agreements mean anything in China. Apple put all their eggs in one basket and that basket is held by the Chinese Communist Party.
Exactly! Any reasonable government looking at the hollowing out of the once-dominant US manufacturing base over the last quarter century would conclude that any short-term benefit of outsourcing/globalization is outweighed by the devastating long-term cost. And, sad to say, China’s Politburo is more reasonable than the US Congress.
What’s that saying? Everyone can learn from his own experience; the wise person can learn from others’ experiences.
