The ripple effect of Foxconn’s changes

An article in the New York Times (March 29, 2012) describes widspread violations discoverd by the Fair Labor Association, hired by Apple to audit its suppliers, at Foxconn. The supplier, Foxconn, has committed to adhere to Chinese law, which restricts factory employees to work less than 49 hours each week (compared to 60 hours a week), while maintaining their wage levels. The impact is expected to increase labor costs, require more employees, and impact all consumer electronics manufacturing. Will these changes by Foxconn increase prices of electronic products or will it cause OEMs to cut their margins to maintain prices ? Will the improved compliance in China increase the magnitude of the manufacturing in China ? How will these increased wage rates ripple across all manufacturing in China ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , , , , . Bookmark the permalink.

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