beyondbrics

When Terry Gou, founder and chief executive of Foxconn, the world’s largest electronics contract manufacturer, announced on Friday that the group would drastically increase the use of robots in its manufacturing process, that was supposed to be good news. At least investors are set to like the idea of containing production cost. And the message Gou meant to get across was also that young workers would no longer be forced to do exceedingly boring and repetitive jobs.

But it didn’t come out right. Gou used a speech in front of 20,000 of his employees at a dance party last Friday to announce that Foxconn (2354:TAI) would be using 1m robots three years from now – matching the group’s total China headcount – which would replace workers in some jobs.

Foxconn has been forced to learn very fast over the past year. When young workers at the Taiwanese group’s factories in China started jumping off buildings to their death last year, the company which makes the iPad and other gadgets for a scattering of famous global tech brands but used to stay in the shadows itself had to figure out a PR strategy within weeks.

It also hiked wages by double-digit margins twice and took crash courses in psychology, social services and counseling, trying to counter ‘sweatshop’ accusations and give itself a softer image.

One key point was to deal with young migrant workers’ complaints that they often felt treated like machines.

The company’s efforts have worked quite well – in a recent survey of working conditions in Chinese factories by labour groups, a Foxconn plant came out at the top of its sample group.

Now it just has to protect its CEO from himself. On Monday, the company refused to confirm the numbers mentioned by Gou. Instead, it issued a long-winded statement saying the chief executive had “made remarks about his vision for the company, the opportunities that the future holds for the company and its employees, and his commitment to moving the more than 1 million employees at Foxconn higher up the value chain beyond basic manufacturing work.”

Related reading:
Foxconn, worth less than toilet paper, beyondbrics
The rise of the machines, FT