This is Apple’s greatest hope to exit China

Tram Ho

Having relied too long on China, Apple now needs to find a way out when U.S.-China tensions have not ended. That exit might come from poor female workers.

In the early morning, dozens of buses stopped at a low building in the southern state of Andhra Pradesh, India. The women wearing the traditional shalwar kamez dress went down, each step making their dupatta roll up. They passed a slogan plastered on the wall: The primary goal was no accidents.

It was a normal morning at the factory of Foxconn Technology Group in Sri City, when night and morning shift workers were swapping places. Jennifer Jayadas, 21 years old, tall and thin is one of the morning shift workers. She had just left the house a few kilometers away, which had no running water.

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Female workers hurried into the factory to start the shift from 6 am.

Swallowing his breakfast with chapati and bean curry, Jayadas quickly put on his work uniform and walked into his cell. She will spend the next 8 hours to make sure the volume buttons, vibrator and other functions work properly.

“Smartphones used to be made in China before. Now we do it right here, ”Jayadas said.

Never put eggs in the same basket

Foxconn, also known as Hon Hai Precision Industry, opened its first factory in India four years ago. They now have 2 factories about to expand, and will open 2 more factories. India is an important base for this company to gradually shift operations from China.

Success in India became even more urgent when U.S. President Donald Trump began a trade war in 2018, declaring taxes on thousands of products from China. Among these, there are many products of Foxconn partner such as Apple, Amazon.

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CEO Tim Cook has repeatedly approached the Indian Prime Minister about iPhone production in the country.

At the end of August, Mr. Trump continued to push the war to a new level by asking American companies to leave China. Not long after, he retracted his statement, but the companies knew they needed to rethink the supply chain, no matter how expensive.

"A good business strategy is not to put the eggs in one basket."

Josh Foulger, Director of Foxconn India.

“A good business strategy is not to put the eggs in one basket. We must look for viable and reliable alternatives. Clearly alternative locations must also be highly competitive. Can't build a phone assembly plant in Mexico. If it was 10 years ago, it would have been good, but now certainly not, ”said Josh Foulger, Director of Foxconn India.

Foulger, 48, grew up in Chennai and attended the University of Texas, before returning to India to set up a factory for Nokia. He joined Foxconn four years ago to help founder Terry Gou set up assembly plants in India, now the world's fastest-growing smartphone market.

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Josh Foulger, Director of Foxconn India will play an important role in the dream of succeeding the world phone factory that replaces China.

Foxconn's first factory in India opened in 2015 in a special economic region, with tax incentives. The factory now has nearly 15,000 workers, of which 90% are female, and assembles a variety of phones for companies. Xiaomi, the # 1 phone brand in India and Apple's iPhone X are all assembled here. The second factory has 12,000 workers and many automatic lines.

Foxconn still has to import components from China, but they are aiming to produce screen and printed circuits domestically. Foulger's goal is to produce 1/3 of the domestic mobile market share and 10% internationally. Foxconn will soon have other products like the Amazon Echo smart speaker.

“Previously, India only produced for India. Soon India will produce for the world, ”said the director.

"India will make the world less dependent on China."

Current Indian labor costs are about half that of China. They also have abundant human resources, many good engineers, and supportive policies from the government.

Foxconn received support from Indian Prime Minister Narendra Modi, when Modi wanted to reduce unemployment. The "Make in India" policy, implemented over the past 4 years, has boosted the country to become a manufacturing power.

"India's plan is to grow the phone industry from US $ 25 billion to US $ 400 billion by 2024. Most will be exported," said Pankaj Mahindroo, president of the Indian Electronics and Telecommunications Association. will.

India can increase production capacity and help reduce the world 's dependence on China.

Anshul Gupta, Research Director at Gartner India.

There are still many challenges to accomplishing this goal. Only 700,000 workers have jobs in the electronics manufacturing industry, skilled workers are very lacking. There are not many auxiliary vendors like batteries, semiconductors or microprocessors.

“India has not reached the desired level. But things are still getting better. India can increase production capacity and make the world less dependent on China, ”said Anshul Gupta, research director at Gartner India.

Foxconn used to play a huge role in China's transition to a "world factory". Foxconn President Terry Gou convinced Modi that India could do the same. However, it took China 30 years to get there today.

"India must not only try but also do better than China, and the trade war will only help a little bit."

Andrew Polk, researcher at Trivium China.

“China's advantage is that they have too many workers to help produce cheaper, and they invest heavily in logistics and transportation. Although the labor cost advantage is losing, they still have processes and systems that are invested in order to easily expand production and bring goods into circulation, ”said Andrew Polk, researcher at Trivium. China commented.

To catch up, the Indian government and companies will have to invest heavily in roads, ports and other infrastructure.

“When China did in the past, the global supply chain was still fragmented and there was no China before. India must not only try but also do better than China, and the trade war will only help a little bit, ”Polk said.

A veteran of the past two decades in the field of supply chains in India and elsewhere, Foulger understands the challenges deeply.

“I would fool myself if I said India could become a Chinese copy. In fact, we have many limitations. "

While the state government allocates land, water and electricity, Foxconn, Dell, Flextronics and others build industrial parks for their factories. Despite this, Foulger still had to transport water from elsewhere to its thousands of workers, as the city of Chennai and surrounding areas suffered from severe water shortages.

The women are Apple's hope

Foulger originally decided to recruit mainly women. Female workers are common in China, but very rare in India, where rural women are often assigned to unpaid household or farm work. Women in this area were not even allowed to work at night in factories until local authorities and courts intervened four years ago.

Foulger's mother, a teacher, was the one who came up with the idea and persuaded him to give women a chance. Because most Indian manufacturers prefer to hire men, recruiting his female workers is easier than ever. In return, he had to learn how to provide small facilities for women.

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The salary is high, but many workers only consider it a temporary job because of long and boring working time.

For example, the air conditioner must turn up to 26 degrees because many women have never used it. Foulger also had to pay insurance for his female workers and provided buses and dorm rooms for people living away from the factories.

“First, fix the house. After that, I want to save money to take a beauty course. ”

Jennifer Jayadas, worker at the Foxconn factory in Sri City, India, talks about her goals here.

Still, he says all the extra costs are well worth it because women work hard and have a keen attitude to the opportunities they get.

Contrary to factories in China, which have long been criticized for stressful working conditions, workers at the Foxconn factory have no clear signs of labor exploitation. Workers here mostly complain about the monotony.

From the moment they walk into the door of the workplace to the end of an eight-hour shift, all work is repeated in a continuous cycle. Daily production goals must be met at any cost. Workers connect each phone part together, checking each phone for obvious defects.

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Not working conditions, boredom is what workers complain the most.

Shivaparvati Kallivettu, 24, who works on sound testing, battery testing and SIM card trays, shared that her main break is every morning in the factory canteen when she eats breakfast with four people. best friend.

Most women get jobs with specific goals in mind, such as sending children to better schools or writing off debts to families. The salary here helps them to overcome the poverty line. Jayadas receives about 9,000 rupees per month ( $ 130 , about one-third the average salary of the Chinese factory), takes a free bus and two healthy meals.

To avoid being tedious, the company teaches workers at least 10 skills in the inspection, packaging and assembly segments of the line so they can be rotated to different jobs. However, most still consider it a temporary job.

Recently, 400 women were not present at the shift. The executives discovered that all of them took the government teacher recruitment exam, a job that earned a third of the money at Foxconn without the same facilities.

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"First, let's fix the house," Jennifer Jayadas said.

After the shift, Jayadas got on the bus and arrived home before 4pm. She cooks, then goes out to get 12 barrels of water from the tap to meet the family's daily needs. Her father's income was meager and unstable from fixing radios and DVD players, so all of her salary went to her parents.

"First, let's fix the house," Jayadas said, pointing to the fragile roof and the damaged walls. "After that, I want to save money to take a beauty course."

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Source : TechTalk