Foxconn looks to Indonesia for cheaper workers. Is the US next?

Not a healthy way to produce our needs

by Richard Mellor

The Wall Street Journal reported some time ago on Taiwanese company Foxconn's plans to shift production from mainland China in response to rising wage Labor costs. It appears that Foxconn once in the news regarding multiple suicides at its industrial complex is following through on its threat.  According to Reuters, Foxconn is investing $5 to 10 billion in Indonesia over the next five to ten years and will begin the move later this year.

Foxconn is China’s largest private employer, with 1.2 million workers, producing 40 percent of the world’s electronics for global brands such as Apple and Microsoft and had made public its plans to move to Vietnam and other countries some time ago.  The strikes at auto factories in China coupled with increased protests and demonstrations against land seizures, corruption and environmental issues has caused wage rises of 20% in some instances. Foxconn, that makes Apple's iPads in Shenzhen, raised salaries by 16-25% in February this year alone. Wages for blue-collar workers in Guangdong rose by 12% a year, in dollar terms, from 2002 to 2009 and 14% a year in Shanghai, according to the Economist

Despite threats to shift production, many felt that the lack of infrastructure in Indonesia compared to China plus China's huge Labor pool would keep Foxconn there but it seems that the cheaper Labor power is too sweet to resist.  Indonesia promises to offer Foxconn preferential measures to attract the company but no one is sure what they will be must most likely it will be the usual, cheap or free land,  some public funds, infrastructure spending that will build the necessary road and rail links that will make Foxconn's shift worthwhile.

We see this happening everywhere as corporations travel the globe in search of more lucrative places to do business.  As the assault on US workers continues unabated with no resistance from the heads of organized Labor the once "overpaid" US worker is becoming more attractive.  Caterpillar shifted production from its Canadian plant to Illinois after workers at the London Ontario plant refused to accept concessions.  Wage and benefit costs at a Caterpillar plant in LaGrange Illinois are less than half of those at Caterpillar’s plant in London Ontario.  The US “has become much more efficient, making it more attractive for global manufacturers.” the Wall Street Journal reported. 

This is why we see the increased assault on public sector workers here in the US where wages, benefits and workplace conditions have been somewhat better than our private sector counterparts. It is in our interest to wage an offensive to improve our conditions and expand what we have to all workers, it is in the interests of the 1% to set us in competition with each other for who will work cheapest, fastest, and under the condition most favorable to capital accumulation. . Global capitalism does not shift production from one locale to another, one nation to another, to increase the wages and material well being of the workers there, just the opposite.  The attraction is low wages, little interference or restrictions on capital flow and friendly pro-business governments.

For workers its the race to the bottom. Imagine, that the 1% and their two political parties in the US have driven wages and benefits of industrial unionized workers to half the level of our Canadian counterparts. Even the Fiat bosses in Italy have threatened to move to the US if their workers don't accept concessions. This is where the Team Concept, the collaboration between the heads of organized Labor and the captains of industry has brought us. This is the end result of their worship of the so-called free market.

Perhaps Taiwan's Foxconn might be coaxed to move a plant over to the US if we just make that little extra sacrifice.