| Date: |
12-12-2014 |
| Subject: |
Foxconn says it will shut down India operations on December 24 |
CHENNAI: This is the worst Christmas gift employees at Foxconn can get. The global giant in mobile phone and component manufacturing has said it will shut down its Indian operations on December 24 due to poor order book situation.
In a statement to TOI, Foxconn spokesperson said, "We can confirm that our India operation, FIH India Private Limited, will be suspending all operations at our manufacturing facility in Chennai effective December 24, 2014. This action is being taken due to a change in that facility's customer base and a related change in the manufacturing requirements of our customers in India."
Foxconn came into India in 2006 following its most important client at that time, Nokia. The company had two units in Sriperumbudur HiTech SEZ and one inside Nokia SEZ.
At the peak of its operations, the company employed more than 6,800 persons directly inside the Nokia SEZ factory alone. The other two plants in Sriperumbudur HiTech SEZ on the Chennai-Bengaluru highway have already been shut down as Nokia started downsizing its orders to Foxconn over the past two years.
"This action is also related to a restructuring being carried out of our India operations that is designed to ensure that we are able to meet both the current and future needs of our customers in that important market. We are working with the government and the relevant labor unions to ensure that this action is carried out in a manner that follows all relevant laws and regulations and is fair to the approximately 1,300 employees who will be affected by this move," the Foxconn statement said.
It is learnt that Foxconn management has begun exit dialogue with representatives of three trade unions -- the DMK-backed Labour Progressive Front (LPF), the AIADMK-backed Anna Thozhir Sanga Peravai (ATP) and the official union, which is backed by the CITU.
"Nearly three rounds of discussions with all the three union representatives have been completed so far. Nothing tangible has emerged yet," sources said. The company is learnt to invested nearly Rs 850 crore in India for manufacturing phones and components.
"We will continue to consider investments in manufacturing operations in India when they make sense commercially and when they are consistent with the needs of our customers. Details regarding any new investments will only be announced once decisions have been made and all necessary approvals received," the statement said.
Foxconn had planned to make high-end iPhones and iPads off assembly lines in Sriperumbudur in 2010. A combination of poor industrial relations, flurry of trade union activism and lack of political support for business enterprise forced Foxconn, the largest contract manufacturer for Apple, to locate its iPhone and iPad production in Brazil, cutting off the prospect of 80,000 direct jobs in the suburb of Chennai.
"The 2007 launch Apple's iPhone was a global hit. Foxconn was the contract manufacturer for Apple iPhone. In 2010-11, Foxconn did a preliminary study to make iPhones in India," sources said.
The end of the road for Foxconn is not a surprise to many. "In India, Foxconn's fortunes were directly linked to that of Nokia's. When Nokia started losing its market, orders started to drop for Foxconn and when Nokia shut down its Sriperumbudur plant, Foxconn didn't have much of a choice," the sources said.
Billionaire Terry Gou-promoted Foxconn, which ended last year with $127 billion in revenues, is the world's largest electronics contract manufacturer and a key supplier to Apple, HP and Sony.
Source : timesofindia.indiatimes.com
|