Hon Hai Hands Over Management of Staff Dorms

Hon Hai, or Technology, will no longer manage its staff dormitories in Shenzhen. The Wall Street Journal reports:

Taiwan’s Hon Hai Precision Industry Co. said late Friday it agreed to hand over the management of staff dormitories in China’s Shenzhen, where it employs nearly 450,000 workers, to two property management firms as it seeks to improve employee conditions where several employee suicides occurred recently.

Hon Hai, also known under the trade name Foxconn Technology, signed a memorandum of understanding with two China-based commercial property management companies, Shenzhen CPM Property Management Co., and Kaiyuan Property Management, to take over management of Foxconn’s 153 employee dormitories that are linked with the company’s Longhua and Guanlan campuses outside Shenzhen, Hon Hai said in a statement.

“Providing employees with basic necessities including a safe and convenient place to live at the work-site might have been sufficient in the past, but this arrangement no longer satisfies the needs of the young migrant workers of today,” Foxconn Corporate Executive Vice President Terry Cheng said in the statement. “They also want to have a life in the city in which they work. This is why companies, government and communities need to work together to expand support networks so that employees have a stronger sense of belonging and can better integrate into the community.”

Read also the New York Times‘ coverage:

The decision is the first time one of China’s biggest exporters has pledged to abandon what most manufacturers say is an integral part of China’s factory model — a system that depends on housing migrant workers near factories that specialize in low-cost, around-the-clock assembly line operations.

[…] Whether Foxconn is really abandoning worker dormitories, however, is unclear. Some analysts are skeptical that Foxconn, a division of the Hon Hai Group of Taiwan, can afford to surrender control of its dormitories. They say the company may simply be trying to evade responsibility for poor living conditions by outsourcing the dorms to other companies.

“That’s the logic apparel companies relied on 15 years ago when they said ‘it’s not our manufacturing plant so it’s not our problem’ if working conditions are poor,’ ” said Pietra Rivoli, a professor of international business at Georgetown University and the author of “The Travels of a T-Shirt in the Global Economy.”

“But it didn’t work then,” she said. “And I don’t see how this is going to absolve Foxconn of responsibility in the eyes of most observers of the supply chain.”

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