Following a 30 per cent wage increase from July 1, the group said workers who
reach certain performance standards would get another 66 per cent pay rise
from October 1.

"The monthly wage for all first-line employees and their line leaders and
supervisors in Shenzhen will be elevated to Rmb2,000 as early as October 1,
2010," if the workers successfully passed a three-month evaluation
period, the company said.

The group’s drastic step is the clearest sign yet of major changes in the
labour conditions in export manufacturing in China.

Negotiations
It comes as Foxconn and other contract manufacturers are starting their
annual negotiations with their customers, branded electronics companies such
as Apple, Hewlett-Packard and Motorola, for next year’s orders.

Foxconn, which makes electronic gadgets such as iPhones and PlayStation video
game consoles, is China’s largest employer with a headcount of 800,000, and
has been the country’s largest exporter every year since 2003. Hon Hai
Precision Industry, the group’s Taiwan-based parent, had revenues of US$61bn
last year.

Foxconn executives said they could not predict how the additional cost would
be shared but expected customers to help shoulder the burden. "We are
applying international standards now. The time has come for the global food
chain to face these issues," said Edmund Ding, Hon Hai spokesman.

The latest increase would more than double the basic pay of assembly line
workers in Shenzhen and bring it to a level they currently only reach by
working 12-hour shifts six days a week.

The increase exceeds the demands of some labour activists who had rejected
Foxconn's earlier 30 per cent pay rise as too little too late. Activists
said the group needed to increase pay by at least 50 per cent to give
workers a decent income without massive overtime.

Suicide among workers
The drastic change comes as a spate of suicide among workers in Foxconn's
largest plant and a strike at a Honda plant in China have triggered calls
for better conditions for the tens of millions of migrant workers who have
been powering China's export manufacturing machine.

Foxconn said the three-month evaluation period was aimed at keeping workers
from job-hopping. Combined with the pay rise, it is meant to change Foxconn
from a high-pressure, low-loyalty employer into one seen as more attractive
to workers.

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