Apple Supplier Foxconn Says 150 Workers at South China Factory in Protest

Foxconn Technology Group (FOXCGZ), maker of parts for Microsoft (MSFT) Corp.’s Xbox, said some members of its 1 million-person workforce threatened to jump from a factory building earlier this month to protest an internal transfer of employees.

About 150 workers at Foxconn’s plant in Wuhan, southern China, demonstrated on Jan. 2 in opposition to the company’s plan to move them to a new production line, the Taiwanese company said in an e-mailed statement today. Foxconn didn’t say how many threatened to leap from the three-story building.

The incident was resolved the same day, after talks between the workers, executives and government officials, Foxconn said. Microsoft said in a separate statement that it investigated the issue.

Foxconn, the world’s biggest contract manufacturer of electronics including Apple Inc. (AAPL)’s iPhone, raised wages and boosted worker welfare in 2010 after at least 10 employees committed suicide. The Wuhan protests showed the Taipei-based company needs to improve communication with workers, said Geoffrey Crothall, a director at rights group China Labor Bulletin.

“The reason you see these protests is because the employees feel they have no other option,” Crothall said by phone from Hong Kong today. Threatening suicide is a common way for Chinese workers to draw employers’ attention to grievances, he said.

Worker Suicides

Forty five employees in Wuhan resigned after the dispute over reassignments among the facility’s 32,000 employees, Foxconn said in the statement.

The suicides at Foxconn in 2010 prompted labor groups including China Labor Watch to say the Taipei-based company pushes employees to work long hours to earn more money. Foxconn denied the allegation.

“After talking with workers and management, it is our understanding that the worker protest was related to staffing assignments and transfer policies, not working conditions,” Microsoft said in its statement.

The majority of the protesters at Foxconn returned to work, Microsoft said.

“The welfare of our employees is our top priority,” Foxconn said in the statement. “The operational changes that were the basis for this incident are being carried out in accordance with all relevant laws and regulations.”

In 2010, Foxconn offered to double wages for workers in Shenzhen, the company’s biggest manufacturing center in China; install safety nets; and hire counselors and psychologists in response to the employee suicides.

The Taiwan company also moved production to locations in central and western China, where costs are lower than in the east.

To contact the reporters on this story: Janet Ong in Taipei at jong3@bloomberg.net; Mark Lee in Hong Kong at wlee37@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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