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China technology

Billionaire CEO of Apple’s largest supplier chafes at China overtime caps

PUBLISHED : Friday, 22 June, 2018, 6:30pm
UPDATED : Friday, 22 June, 2018, 6:30pm

The billionaire chairman and chief executive of Foxconn Technology Group, Apple’s main iPhone assembler and the world’s largest electronics contract manufacturer, argues that China’s “unreasonable” restrictions on overtime hours hurts his workers and the company’s competitiveness.

Taking aim at criticism Foxconn overworks its employees to meet soaring demand before the annual holiday shopping season, Terry Gou Tai-ming told shareholders of Taiwan’s Hon Hai Precision Industry, the group’s main listed unit, on Friday.

Gou, who founded Hon Hai in 1974, said Foxconn workers actually want to work more hours and that forcing them to put in less time reduces their income.

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Foxconn, which as China’s largest private employer keeps about a million on its payroll, has drawn fire for years over practises such as allowing overtime to soar during the peak season, when it sharply ramps up production to get devices to market in time for the holidays.

Gou, however, said that was normal practise in other parts of the world, and stressed that Foxconn’s biggest challenge now was not labour but US-Chinese tensions that threaten to upend the global supply chain.

“We have a number of response plans,” Gou said at Hon Hai’s annual shareholder meeting. “The trade war is not about trade, but it is a tech war, and it is a manufacturing war.”

China’s rising economic and technological prowess is at the heart of a dispute with the US that, while waged through retaliatory trade tariffs, is also aimed at prying open the world’s second-largest economy to US businesses and restricting the use of government aid to advance strategically important industries.

Terry Gou, head of iPhone assembler Foxconn, downplays risk of US-China trade war

Gou, however, refrained from criticising either side in current negotiations, saving his sharpest comments for China’s labour law.

He argued that Foxconn should be governed by US regulations since a large swathe of its customers, from Apple to are, American.

The trade war is not about trade, but it is a tech war, and it is a manufacturing war
Terry Gou, CEO of Foxconn Technology Group

The Foxconn chief also repeated a pledge to employ robots to replace 80 per cent of workers in the coming years, as one potential solution.

“China has tougher overtime regulations than the US and the European Union, and they understand those are unreasonable regulations, unreasonable laws,” Gou said.

“Right now during the low season we are following China’s regulations, and in the peak season we are following US regulations.”