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January 12, 2012
Microsoft Says Worker Dispute at Foxconn Plant Resolved
    by Robert Kropp

Suicide threats by protesting workers at Chinese manufacturing plant recalls 2010 deaths of workers at another Foxconn plant in China.

Hundreds of workers employed by a manufacturer of Microsoft Xbox consoles in China threatened to commit mass suicide earlier this month in a dispute over compensation.

The number of workers engaged in the protest at the factory owned by Taiwan-based Foxconn Technology Group has been reported to be between 150 and 300. The factory, which is located in Wuhan, employs 32,000 people.

In 2010, at least 14 workers at another Chinese plant owned by Foxconn committed suicide, most of them by jumping from the roof of the four-story dormitories in which they lived. The protestors in the most recent dispute also threatened to jump from the roof of a dormitory.

The workers were reportedly protesting the transfer of jobs to another production line. According to an article in the Washington Post, workers said they had been offered severance pay if they chose to resign instead. Foxconn said that it did not offer severance pay to workers.

In response to the dispute, Microsoft issued a statement which said, "Microsoft takes working conditions in the factories that manufacture its products very seriously, and we are currently investigating this issue."

The statement referred to the company's Vendor Code of Conduct, which requires its suppliers to pay legal wages under humane conditions; limit the number of hours employees are required to work; and provide a safe and healthy work environment.

Microsoft later stated, "It is our understanding that the worker protest was related to staffing assignments and transfer policies, not working conditions."

Effective supply chain management can be particularly challenging for companies in the electronics sector, because the number of available suppliers is limited. Foxconn alone employs an estimated 800,000 workers and, in addition to Microsoft, partners with Apple, HP, and Sony as well.

In a blog post following the 2010 suicides, analysts at RiskMetrics noted the leverage that suppliers have with electronics companies, but also observed that with that leverage comes increased scrutiny.

"Investor expectations for transparency, governance and ethical conduct, along with the intensity of media coverage, are catching these companies off guard," analyst Linda-Eling Lee wrote. "Their focus on cost, efficiency, and scale as a competitive advantage might have to shift to accommodate a fuller set of investor and consumer expectations."

Also following the 2010 suicides, a coalition of investors led by members of the Interfaith Center on Corporate Responsibility (ICCR) issued an Inves tor Statement calling on electronics companies and their suppliers to improve working and living conditions for workers by providing on-going training on worker rights, following limits on overtime, and supporting trade union representation.


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