APM Marketplace: Labor too expensive? Get a robot

China Labour Bulletin is quoted in the following article. Copyright remains with the original publisher

By Rob Schmitz
Marketplace Morning Report, Tuesday, August 2, 2011

Chinese factory owner Foxconn assembles iPads and iPhones and has now announced that in the next few years it will replace a portion of its workforce -- with robots.

STEVE CHIOTAKIS: Over in China, Foxconn, which makes iPads and iPhones for Apple says it's going to replace a portion of its workforce -- with robots. Foxconn has bee criticized for its harsh working conditions.

Marketplace China Bureau Chief Rob Schmitz reports.

ROB SCHMITZ: Foxconn's chairman said he's opting for robots because the cost of labor in China's too high.

Other manufacturers along China's fast-growing East Coast have noticed the same thing. Employees aren't coming back after holidays, because they're not being paid enough. As a result, Geoffrey Crothall of China Labour Bulletin says he's seeing a lot of factories near Hong Kong go bankrupt.

GEOFFREY CROTHALL: But as those industries are closing down, more and more are opening up in inland provinces.

Crothall says foreign companies are opting to head to lower-cost provinces in China's interior rather than packing up and leaving China. That's because China's home to the fastest-growing consumer population on the planet. So why move your factory when your consumers are right next door?

CROTHALL: They have to be in China. They can outsource some of their production to some of these countries like Bangladesh, Cambodia, Indonesia, but they will still maintain quite a substantial presence within China.

Last year, Foxconn was criticized for its working conditions after a dozen factory workers killed themselves. Crothall says, if robots can take over some of the more tedious work, that's a good thing. In Shanghai, I'm Rob Schmitz, for Marketplace.
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