Perhaps as a response to recent labor issues in China or to rising manufacturing costs, or even as a way to hedge its dependence on the Chinese Mainland for a large chunk of its business, Taiwanese manufacturing giant Foxconn is reportedly considering a new factory in the US, potentially in Detroit or Los Angeles.
The new plant is rumored to be solely for Foxconn’s flatscreen TV business, and the equipment will primarily be automated by robots. This contrasts with the hand-labor-driven nature of its Chinese factories.
Foxconn has been highly successful with its existing business model, yet strains in recent years on the RMB, a PR mess related to working conditions, and an unpredictable riot tendency in China is becoming increasingly burdensome for the company as it tries to keep alive its market leading role.
In China, Foxconn assembles Apple’s iPad and iPhone products with approximately 800,000 workers who are willing to accept wages of a few hundred dollars a month and live in dormitories. The company has come under fire over the years because of these working conditions.
Even though this is a rumor, last week Foxconn’s chairman Terry Gou revealed that he would be inviting a dozen American engineers to learn manufacturing at factory locations in China. He stated that he hopes to teach engineers how to bring automated manufacturing processes back to the US. He also mentioned that he is considering an exchange program with MIT.
Image from China.org.cn