Foxconn could be planning to move its production lines from China to other countries including the US, a decision that could be behind the Apple manufacturer's recruitment freeze.
Last week, the news that Foxconn has stopped hiring new workers across its factories in China caused Apple shares to fall amid fears that slowing iPhone 5 production was the cause of the freeze. A Foxconn representative later said that the reason for the hiring freeze was that more workers had returned from Chinese New Year than expected, thanks to Apple's new measures to improve working conditions.
However, Digitimes on Wednesday reported that the company is considering moving its investment focus from China to countries such as Brazil, Indonesia, Taiwan and the US, which is why it has no plans to recruit new workers at present.
While Foxconn is expected to remain in China due to advantages in terms of cost and infrastructure, sources claim that recent investments suggest that the manufacturer is planning to expand its global market. "China's rising labour costs and strict policies for environmental protection will gradually impact Foxconn's profitability," Digitimes claims.
This is not the first time we've heard that Foxconn is considering expanding its manufacturing to the US. In December, after Apple CEO Tim Cook announced that Apple would manufacture one of its Mac lines in the US by the end of 2013, Foxconn said it was thinking of coming to the US to meet the needs of its customers, and to "leverage the high-value engineering talent" available in the US market.
Meanwhile, a report this week from labour watchdog group Student & Scholars Against Corporate Misbehavior (SACOM) has accused three of Apple's Chinese suppliers, Foxlink, Pegatron and Wintek, of inhumane worker conditions.
"In its code of conduct, Apple claims that it requires its suppliers to uphold its workers' basic human rights as understood by the international community, and to treat them with dignity and respect," reads the report. "In contrast, our investigation demonstrate that Apple supplier factories are intensifying a military-style management of workers."
"Apple's product sales are high, with new models and devices every year," the report continues. "Therefore, to make sure workers meet the daily production targets, Apple suppliers resort to inhumane labour practices, even to the extent of denying workers' basic human needs, such as allowing bathroom breaks, sufficient rest, and access to proper nutrition."
The report also claims that the use of student interns has increased, which deprives them of their "right to a quality education," and that forced overtime continues to be imposed on factory workers, violating both Chinese labour law and Apple's standards. SACOM claims that factory conditions are hazardous, and that workers are often verbally abused by supervisors.
In response to the report, a spokesperson for Apple in China told the South China Morning Post: "We insist that our suppliers provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes wherever Apple products are made."