Foxconn Under Investigation…Again

Andrew Klips |

Foxconn Under Investigation…AgainFoxconn Technology Group, the Taiwan-based electronic manufacturing beast of the east, just can’t stay out of the news for its labor issues. Only a couple weeks after a brawl at its Taiyuan, China factory involving thousands of workers that sent 40 people to the hospital, the computer components supplier has the winds of labor concerns blowing its sails again. Early in October, China Labor Watch, a New York-based company keeping tabs overseas, said as many as 4,000 workers went on strike because of quality demands imposed on iPhone 5 production workers.
The Taipei company has been under scrutiny amid a spate of labor practice worries since 13 employees committed suicide in 2010, followed by several more in 2011, another whom “fell to his death” in September and criticisms of low wages and safety violations. In June, about 100 workers went on a rampage at a Chengdu plant in southwestern China.

This time, Japanese video game maker Nintendo (NTDOY) said is investigating a statement by Hon Hai Precision Industry Company – the parent company of Foxconn – that it used underage workers at its factory in the coastal city of Yantai, China in the northern province of Shandong. Foxconn makes parts for industry leaders like Sony (SNE), Apple (AAPL) and Microsoft (MSFT) throughout many factories in China employing 1.2 million people. The Yantai plant assembles components for the new Wii U console that is slated to hit the markets early in November.

The legal working age in China is 16 and some workers as young as 14 were reportedly working at the factory for up to three weeks. Foxconn regularly employs vocational school students under internship programs at their factories, with 2.7 percent of its workforce being comprised on the young adults. Upon learning of the underage employees, Foxconn said that it immediately took steps to return the students to their schools and will be finding out "how this happened and the actions that must be taken to ensure that it can never happen again." It further said that it found no other evidence of violations at its other factories.

Nintendo briefly commented in a statement, "If we were to find that any of our production partners did not meet our guidelines [which are based on state laws], we would require them to modify their practices according to Nintendo's policy."

Apple had previously hired an independent firm to investigate labor practices of Hon Hai related to interns allegedly being forced to work at factories to make the iPhone 5. The firm hired by Apple, the Fair Labor Association, found “no evidence that any interns were pressured to participate.” Chinese state-run media sources China Daily and Shanghai Daily contested that the Fair Labor Association based its findings on investigations before the incidents happened.

Needless to say, the microscope is going to justifiably stay on Foxconn.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
AAPL Apple Inc. 109.11 -0.79 -0.72 34,331,042
MGCD MGC Diagnostics Corporation 7.53 -0.25 -3.21 2,062
SNE Sony Corporation 28.14 0.08 0.29 941,335
MSFT Microsoft Corporation 60.22 0.97 1.64 23,553,138

Comments

Emerging Growth

Beleave Inc.

Beleave Inc is a biotech company. The Company is engaged in the production of medical marijuana under the Marihuana for Medical Purposes Regulations outlined by Health Canada.

Private Markets

8tracks

Our mission is to be the best place for people who care about music to create and discover thoughtfully curated playlists. In essence, 8tracks is a platform for online mixtapes.

MyForce, Inc.

As parents, we constantly worry about the safety of our loved ones. The media bombards us with incidents from across the nation school shootings, frequent assaults on campuses, and crimes…