manufacturing suicide: the politics of a world factory
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Chinese Sociological Review
ISSN: 2162-0555 (Print) 2162-0563 (Online) Journal homepage: http://www.tandfonline.com/loi/mcsa20
Manufacturing Suicide: The Politics of a WorldFactory
Thung-hong Lin, Yi-ling Lin & Wei-lin Tseng
To cite this article: Thung-hong Lin, Yi-ling Lin & Wei-lin Tseng (2016) Manufacturing Suicide:The Politics of a World Factory, Chinese Sociological Review, 48:1, 1-32
To link to this article: http://dx.doi.org/10.1080/21620555.2015.1062346
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Chinese Sociological Review, 48(1): 1–32, 2015Copyright # Taylor & Francis Group, LLCISSN 2162-0555 print/2162-0563 onlineDOI: 10.1080/21620555.2015.1062346
Manufacturing Suicide: The Politics ofa World FactoryThung-hong Lin, Institute of Sociology, Academia Sinica, Taipei, Taiwan
Yi-ling Lin, Institute of Sociology, Academia Sinica, Taipei, TaiwanWei-lin Tseng, Institute of Sociology, Academia Sinica, Taipei, Taiwan
Abstract: This article examines how global value chains (GVCs) have shapeda world factory regime, based on the case study of the Foxconn group inShenzhen, China. We identify three features that characterize a world factoryregime: the GVCs’ impacts, the fragmented structure of corporate governance,and workplace despotism, and propose a concept of “global fragmented despot-ism” to explain changing labor conditions, workers’ suicides and resistanceuncovered in Foxconn since 2010.
In May 2010, the Chinese public was shocked by the official media reportsof a series of “jumping suicide incidents” involving migrant workers in theFoxconn factories in Shenzhen, owned by the Taiwanese business groupHon-Hai,1 the largest original equipment manufacturer (OEM) in the world(in terms of employment) and also the major producer of the iPhone andiPad for Apple. According to the domestic and foreign media, there wereat least twenty-five suicide cases committed in the Foxconn factoriesuntil the end of 2010. Reports of the suicides subsequently triggered moreworkers’ suicides and widespread criticism on factory management, as wellas labor rights violations in China.
The jumping incidents stimulated scholarly investigations. However,there exists a large theoretical gap between microlevel explanation ofworkers’ social psychology, and macrolevel discussion on “working classformation.” In this paper, we fill this void with a mesolevel analysis of
Address correspondence to Thung-hong Lin, 128 Sec., 2 Academia Road, Nankang,Taipei, Taiwan 11529. E-mail: [email protected]
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factory regime based on the case study of Foxconn. How did the operationof Foxconn lead worker riots and suicides? In contrast to previous studieson the “localistic despotism” in Southern China (Lee 1995), we focusedon the interactions among the global value chains (GVCs), factory regimes,and the responses of workers. We argue that the politics of the world factoryat Foxconn is a missing link between the macrolevel and microlevel theoreti-cal account for the labor issues in Foxconn.
According to the organizational features of the Foxconn TechnologyGroup, we term a world factory regime as “global fragmented despotism.”“Global” means that the regime largely depends on the production cyclesof GVCs. As a result, the corporate governance and labor process arecontingent upon the demands of brands (i.e., Apple). “Fragmented” refersto the segregation of organizations resulting from the interventions of globalbrands through their complex codes of conduct, as well as from themultilevel labor regulations of multinational and local governments. Thefragmented labor process creates a leeway for arbitrary managerial power,leading to widespread corporate corruption and workplace bullying inFoxconn. In order to satisfy the demand from global customers, the factoryregime ignored the worker’s physical and psychological conditions. Bymeans of wielding capricious managerial power, the factory regime shapedthe “despotism” on the shop floor.
Analyzing World Factory Regimes
Foxconn Studies
Scholars research on Foxconn “jumping incidents” from two perspectives.Some scholars, in a Durkheimian perspective, have attributed the incidentsto workers’ psychological alienation, lack of social support, and emotionalexhaustion at Foxconn (Li, Lin, and Fang 2010). According to the surveysand fieldwork by Yang (2014), some institutional arrangements, such as thehousehold registration system (Wu and Treiman 2004, 2007), factory man-agement, and “dormitory regime” (Smith and Pun 2006), are found to beresponsible for workers’ difficulties in finding fellow countrymen, makingfriends, and maintaining relationships. In other words, the difficulties incultivating “social capital” resulted in the psychological alienation anddepression of the Foxconn workers. Other scholars, in a Marxian perspec-tive, tend to link the jumping incidents and resistance of workers to thedespotic management and poor working and living conditions (Pun andChan 2012). They discussed the implications for class formation under semi-proletarianization among the “new generation” of migrant workers, whomight not be able to return to their home villages but have acted collectivelyto advocate for their rights (Pun and Lu 2010).
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More broadly, the Foxconn jumping incidents are just the tip of theiceberg of the increasing number of labor protests throughout China. TheHonda strikes, which also occurred in June 2010, for instance, have beenused as another case to illustrate the labor politics under authoritarianism(e.g., Chan and Pun 2009; Chan 2010; Chan and Hui 2012; Chan 2012).Moreover, attention had also been given to the roles of intellectualsand nongovernmental organizations’ (NGOs’) participation in investigatingthe incidents and subsequent labor protests (Cairns and Elfstrom 2014; Hao2014; He and Huang 2015). These studies show the growing labor movementand civic engagement in China.
Whereas prior studies have shed light on the poor labor conditions andchanging resistance of Chinese migrant workers, there obviously existanalytical gaps between the microlevel psychological account and themacrolevel process of class formation. In this paper, we propose that amesolevel analysis of organization of factory, which we believe is responsiblefor the labor conditions, workers’ jumping incidents and other resistance.More in alignment with the Marxian perspective, we extend Burawoy’s(1985) analysis of the production regime to dissect the organizationalstructure in Foxconn. First, we will review Burawoy’s studies to see howhe defines “manufacturing consent” and “hegemonic despotism.” Second,we will parse Lee’s and Zhang’s research to see the changes of factoryregimes in China. Finally, we will point out how Foxconn is a hybrid factoryregime that consists of hegemonic and despotic elements, as well asglobalized and fragmented ones. We hope that our analysis willfill the gap between description on workers’ social psychologicalconditions and the narratives on the working class formation under globalcapitalism.
Factory Regimes in China
Based on the revisit of the manufacturer in Southern Chicago where DonaldRoy worked in 1944, Burawoy ([1979] 2005) developed two ideal types offactory regime, namely, despotic and hegemonic ones, to explain the histori-cal change in labor processes from competitive to monopoly capitalism(Baran and Sweezy 1966). According to Burawoy ([1979] 2005), in a factoryunder monopoly capitalism in contrast to competitive capitalism, therelations in production (labor process as a game), internal labor market,and internal state (industrial citizenship and collective bargaining) had con-tributed to what he called “manufacturing consent,” namely, the voluntaryobedience of workers that could alleviate class struggles. Burawoy (1985)further pointed out that state interventions in the labor processes and socialwelfare would lead to the transition from despotism to a hegemonic regime.He argued that the deregulation of the labor markets and the retrenchment
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of welfare states under globalization may undermine workers’ consentto factory regimes, which can be referred to as “hegemonic despotism”
(Burawoy [1979] 2005: 264–5). This ambiguous subtype of factory regime,however, has not been examined empirically.
China’s rapid economic growth has been driving scholars to examine itsimpact on the changes of factory regimes (Walder 1986; Naughton 1995,2007; So 2003). Comparing two factories belonging to the same companyin Hong Kong and Shenzhen, China, Lee (1998) argued that, althoughthe Chinese government established some formal labor regulations thatare more effective than those of Hong Kong, local states colluded withthe company and created an almost laissez-faire labor market for femalemigrant workers. Enforced by the competitive labor market and substitutedby divisions of female workers’ local networks, the arbitrary managementpower formed a despotic factory regime in Southern China. Lee furtherpointed out that the interaction of gender roles, social networks, and labormarket conditions shaped the “localistic despotism” (Lee 1995, 1998).
Over the past two decades, some small-medium enterprises (SMEs) Leestudied have grown tremendously to become largest-scaled ones in theworld, which can hardly be explained by the concept of “localistic despot-ism” she originally developed. In contrast to SMEs, Zhang (2008) analyzedsome large factories in China’s automobile industry and found that, underthe dual-capital structure of a joint venture (i.e., Sino-Japanese) restrictedby state industrial policy, management adopted employment dualism byusing both formal contract workers and permanent workers side-by-sideon production lines, leading to a “hybrid” factory regime that combinedboth hegemonic and despotic elements.
Such a concept of hybrid factory regimes may not be sufficient to capturethe key features of industrial organizations like Foxconn. In contrastto local SMEs in the mid-1990s Shenzhen and the semi-state-owned auto-mobile industry, the factory regime of Foxconn, owned by foreign privateinvestors, is much more globalized and fragmented, and has remaineddespotic for most employees. Refining the labor process theories, weconceptualize the specific industrial organization of Foxconn as a “globalfragmented despotism,” to be elaborated below.
Global Fragmented Despotism
For world factories, changes in production relations depend on theproduction cycles of GVCs (Gereffi 1996). While the GVC literatureoriginates from the world system analysis, recent studies have emphasizedthe positive aspects of the GVCs only, such as the mechanisms of techno-logical diffusion and skill-upgrading in industrial development (UNCTAD2013), and more recently, governance structures (Gereffi, Humphrey,
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Sturgeon 2005), but have largely neglected political contexts, class struggles,and exploitation in GVCs.
In consumer electronics GVCs, the power relationship is unbalancedamong the global brands, OEMs, and workers, resulting in the brands’control of technology, uneven distribution of value, sweatshop-styleexploitation, and class struggles. These GVCs are the “buyer-driven” chains,controlled by the brands, such as Apple, HP, Dell, Nokia, and Google,rather than the OEM (Yang 2011). The changing demands of brandstypically disarrange the corporate governance and labor processes of worldfactories (Lüthje 2004).
To manage the competition of brand customers, Foxconn established atleast sixteen vertical business groups (BGs), each of which included severalbusiness units (BUs), serving one or several customers of the same product(e.g., desktop, cell phone, or server) (Pun and Chan 2012). Each BG islargely independent in company registration, accounting and management,and owned by a few groups listed on the stock markets in either Hong Kongor Taiwan. Foxconn commands more than 600 firms, whose BGs and BUsmostly operated in mainland China.
The intervention of brands is not the only source of a “fragmented”factory regime. At Foxconn, the higher-level managers of the BGs areTaiwanese, and the Chinese managers are discriminated against in salaryand chance of promotion. The discrimination and social exclusion in theinternal labor market has led to the “apartheid” inside Foxconn, andhas blocked information, such as reports of workers’ protests or suicideattempts from the shop floor to the top management.
Moreover, the fragmented management is further enhanced by themultilevel and trans-local labor regulations at the levels of both the centralgovernment and local governments in China. To attract investments, localgovernments (namely, Guangdong province or Shenzhen city) typicallymake some special deals on labor and taxation regulations with foreigncompanies via different bargaining processes (Lee 1998). As a result,corporate governance is further decentralized and the extent to which legalregulations are abided by varies substantially. For example, in Foxconn,the management-wage seniority system differs by branches or factories.
The vertical and horizontal segmentation in world factories has yieldedsome important consequences. Under a fragmented regime, each BG orBU enjoys autonomy in managerial power and such a structure easilynurtures vertical patron–client relationships inside BGs (and BUs), faction-alism among BGs (and BUs), and corporate corruption. To monitor thefactory security and managerial factions and corruption among Taiwaneseexpatriates, Foxconn has installed an Orwellian coercive apparatus calledthe “Central Security Department” (CSD), which is mostly comprisedof mainlander staff members and responsible for factory security to suppresscontentious workers and inform the top leadership. The managerial tactics
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of “divide and conquer” have caused distrust and segmentation betweenTaiwanese and mainlanders. Accordingly, Taiwanese managers could hardlymonitor and regulate the operations of the local supervisors and forepersonson the shop floor. Contrary to the image portrayed in the mass media,Foxconn is not managed by a totalitarian system. Instead, the leadershiptypically loses control of various BGs, BUs, local factories, and dormitories.The fragmented regime coexists with the dictatorship of forepersons,supervisors, and directors in the local factories, offices, and dormitories.
The industrial relationship at Foxconn has been heavily shaped bythe global fragmented despotism. For instance, the success of the iPhone5 in the market has led to large-scale relocations of assembly lines andpersonnel across provinces, sometimes involving more than 10,000 workers.The management typically assigns workers to assembly lines in need andto local dormitories randomly. As a result, workers usually suffer fromisolation and alienation, and the turnover rate is high (according to aninterviewed manager, the rate is 7∼8 percent per month in Foxconn) (Yang2014). Workers, especially migrant workers, must always be subject to thearbitrary power and rule enforcement of managers and forepersons, whoalso face harsh top-down pressure from their own superiors and clients.
Confronting the pressure from GVCs to the shop floor in Foxconn,workers employ three strategies: loyalty, voice, and exit (Hirshman 1970).The high-level managers, mostly from Taiwan, demonstrate personal loyaltyto their bosses and factions based on BGs’ division. The mid-level managersand forepersons in charge of the shop floor, mostly recruited in China,typically follow the directives of their bosses and tell on other colleagues.However, if they are discontent with the job, unofficial industrial action(also known as wildcat strikes) are undertaken. The low-level workers,mostly migrants, may sometimes take collective actions as a way of resist-ance, but more often, they resign from the company after a short periodof time, or in an extreme case, commit suicide, because they are not involvedin the social networks necessary for collective action due to frequentrelocations.
Table 1 summarizes the key features of global fragmented despotism incomparison to other ideal types of capitalist production regime (i.e., despot-ism, hegemonic regime, hegemonic despotism, and localistic despotism).GVCs, multilevel complicated state regulations, and the ethnic discrimi-nation inside are responsible for the chaotic and fragmented managementin Foxconn, and form the social foundation for the workers’ struggles,turnover, and suicides. Such features are by no means unique to Foxconnbut can also be founded in other large-scale foreign-owned factories inChina (Kim 2013). Hence, the notion of global fragmented despotism maycontribute to a general understanding of industrial relations in large-scale,export-oriented, and foreign-owned factories, particularly those located inauthoritarian regimes in developing countries.
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Tab
le1
Pro
ductionReg
imeTyp
ologyunder
Global
Cap
italism
Des
potis
mHeg
emon
icReg
ime
Heg
emon
icDes
potis
mLo
calistic
Des
potis
mGloba
lFragm
ented
Des
potis
m
Roleof
thestate
Laisse
z-faire
Welfare
states
Retrenc
hmen
tfrom
welfare
states
Laisse
z-faire
atloca
lleve
lLo
wstan
dard
andco
mplicate
multin
ationa
l,na
tiona
land
loca
lregu
latio
ns
Cap
italistde
velopm
ent
Com
petitive
Mon
opolyca
pital
Globa
lizationof
mon
opolyca
pital
Com
petitive
(globa
lizationat
perip
hery)
Globa
lValue
Cha
ins
(e.g.,App
le&
Fox
conn
)
Con
sent
ofworke
rsWea
kStron
gDec
line
Wea
kWea
k
Typ
eof
resistan
ceSho
p-flo
orco
nflict,
wild
catstrik
e(voice
)
Institu
tiona
lized
,internal
labo
rmarke
tan
dco
llective
bargaining
(loya
lty)
Disorga
nize
d(voice
andex
it)Sho
p-flo
orco
nflict,
wild
catstrik
e,ex
itEthnicco
nflict,
wild
cats
trike,
riot,
suicide,
exit,
and
occa
sion
alinform
alne
gotia
tion
Cas
estud
yRoy
’sfactories
inChica
go(B
uraw
oy19
79)
Chica
go(B
uraw
oy19
79)
Buraw
oy(198
5)She
nzhe
n(Lee
1995
)She
nzhe
n,20
10–
2014
(our
stud
y)
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Method and Fieldwork
Before moving on to the next section, we would like to illustrate the researchmethod first. In July 2010, faculties and students from twenty universities inChina, Hong Kong, and Taiwan organized a research group to investigatethe labor abuse at Foxconn (Chan, Pun, and Selden 2013). The threeTaiwanese authors of this paper were involved in this research program.Despite the general concern of the research group about labor conditions(Pun and Chan 2012), the authors also used their unique advantage of beingTaiwanese to approach the management at Foxconn and gain an insider’sperspective.
From 2010 to 2014, we purposively sampled and interviewed morethan forty workers and managers from high and low levels of the companyhierarchy, including Chinese, Taiwanese, and American citizens, particularlythose who worked at plants located in Shenzhen and Chengdu. Most ofthe interviews were conducted during summertime. We interviewed as widea range as possible of the Foxconn managerial hierarchy and strove tobalance the gender ratio. All of the interviewees agreed to be interviewedand consented to the content being anonymously used in academic research,and at least one-third of them were interviewed more than twice in differentyears (Table 2). Through the longitudinal interviews, we followed thechanges in the industrial relationship in their workplace and analyzed theassociations among the global brands, politics of production, and resistance,and worker suicides.
Global Value Chains in the Factory
Global fragmented despotism is shaped by the associations between brandsand manufacturers. In the past decade, Foxconn was Apple’s largestmanufacturing partner; the proportion of purchase orders from Apple was40 percent of the total revenue of Foxconn in 2012 (Mishkin 2013). Brandssuch as Apple receive a large amount of the profit, however. Kraemer,Linden, and Dedrick (2011) analyzed the distribution of profits from Appleproduct sales. Their estimation showed that the profit from an iPhoneis shared between Apple and component suppliers (including those in theUnited States, South Korea, Japan, Taiwan and Europe). Apple receives58.5 percent of the profit, and the component suppliers receive 14.5 percent.Foxconn’s share of the profit is only 1.8 percent. Apple is considerably morepowerful than Foxconn in GVCs. Apple designs products and is involved inthe production process of suppliers, particularly the assembly lines of sup-plied like Foxconn. Since April 2004, two BGs primarily worked for Apple:The Integrated Digital Product Business Group (IDPBG) and InnovationDigital System Business Group (IDSBG). These BGs were established in
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Table 2
List of Interviewees
No. Sex Position Ranks BGs Nationality Site
T1 M Director (þ) >E11 Taiwan Guanlan
T2 M Director E11 G, H Taiwan Hong Hai
T3 M Senior Manager E11 B Taiwan Longhua,Chengdu
T4 M Manager E9 C Taiwan Longhua
T5 M Manager >E7 Taiwan Longhua
T6 M Manager E8 C Taiwan Longhua
A1 M Manager E8 C U.S. Longhua
T7 M Assistant Manager E7 Taiwan Taipei
C1 M Assistant Manager E7 PRC Guanlan
T8 F Project Manager E6 C Taiwan Longhua
T9 F Project Manager E6 C Taiwan Longhua
T10 M Project Manager E6 B Taiwan Chengdu
A2 F Manager >E4 C U.S. Longhua
T11 F Section Manager E5 A Taiwan Taipei
T12 M Section Manager E5 C Taiwan Longhua
C2 M Engineer E4 C PRC Longhua
C3 M Engineer E3 D PRC Longhua
T13 M Project Manager E3 B Taiwan Chengdu
T14 M Engineer E3 Taiwan Taipei
T15 M Engineer E3 C Taiwan Longhua
C4 M Team Leader E3 C PRC Longhua
T16 M Engineer E2 C Taiwan Yantai
T17 F Engineer E2 C Taiwan Longhua
C5 M Team Leader E2 C PRC Longhua
C6 M Engineer E2 C PRC Longhua
C7 M Engineer E2 E PRC Longhua
C8 M Engineer E2 C PRC Longhua
C9 M Engineer E2 E PRC Longhua
C10 F AdministrativeAssistant
E1 C PRC Longhua
C11 F Operator E1 D PRC Longhua
C12 F Team Leader O3 A PRC Guanlan,Longhua
(Continued )
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succession to conform to iPod regulations. After the success of the iPhone in2007, IDPBG has focused on Apple products. However, IDPBG could nothandle Apple’s orders because of the success of the iPad in 2010. Foxconnhad to separate DSPG (BU) from IDPBG, and IDSPG worked solely forApple (Field notes, T3, C7).
One of Foxconn’s senior managers informed that “Apple not onlyinfluences the regular producing process of OEMs, but also dominatesour internal management including the nominees of high-level positions”(Field notes, T3). In August 2009, Apple reportedly asked Terry Gou, thechairman of Hon Hai Precision Industry Co., Ltd, to demote Vice ChairmanJiang Haoliang from general manager to special assistant, because he failed tofollow Apple’s instructions to reduce the costs of a component of the iPhone.Foxconn would not receive any more orders from Apple if Gou did not followthe request (Economic Observer 2010). As a manager (T3) stated:
“Obedience would be the precise term to describe the relationship withApple. If you want to work in this department, you have to be very toughand perform well under pressure. Apple, which gives large and diverse orders,is our main client. Moreover, Apple’s slyness is far beyond comprehension.They usually come to us first to solve problems; however, if we are unable toprovide satisfactory replies, they have whoever else is in charge oppress us. Any-way, the stark reality is that Apple does whatever it wants” (Field notes, T3).
The unbalanced relationship between Foxconn and Apple has partiallyresulted from the reliance of the former on the latter’s technology. AlthoughApple and Foxconn reportedly have had a cross-licensing agreement since2007, one engineer (C3) in Research and Development (R&D) at Foxconn
Table 2 Continued
No. Sex Position Ranks BGs Nationality Site
C13 F Team Leader O3 A PRC Guanlan
C14 M Operator O2 PRC Guanlan
C15 F Operator O1 D PRC Guanlan
C16 M Operator O1 F PRC Longhua
C17 F Operator O1 A PRC Guanlan
C18 F Operator O1 A PRC Guanlan
C19 M Operator O1 A PRC Guanlan
C20 F Operator O1 PRC Longhua
C21 M Operator O1 PRC Longhua
C22 M Operator O1 PRC Longhua
C23 F Operator O1 PRC Guanlan
C24 F Operator(Administrative)
O1 PRC Guanlan
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stated that Apple handles the core products and only allows Hon Hai to bethe OEM: “We are responsible for only some software and for checkingcensors to make sure the delicate buttons are able to work” (Field notes, C3).
To continually receive orders from Apple, Foxconn has to play byApple’s rules. For instance, at Foxconn, the workplace security and techno-logical confidentiality are strictly maintained by the Central SecurityDepartment (CSD). In the Foxconn factory located at Longhua, Shenzhen,there are three access control systems leading to each entrance gate, and nodata storage devices or camera installations are allowed in the productionplants, among which the Apple’s Bus have the strictest regulations. SunDanyong, a former Foxconn worker, was reportedly a victim of such strictregulations on confidentiality and committed suicide in 2009. Suspected asa theft of the iPhone 4 N90, Sun was interrogated and forced to admit steal-ing under pressure. He killed himself later in order to prove his innocence,accusing CSD security of bullying him in a letter he wrote (Tseng 2012).
Sun’s death is viewed as an omen of the chain suicides in Foxconn.Because of a series of the jumping incidents in Shenzhen plants, Foxconnwas facing tremendous pressure from the outside. To handle orders fromApple, Foxconn aggressively started relocating expanding its productioninto Western China and other regions. For example, IDSGB in Chengdurecruited 250,000 workers in June 2010, for the production line of Appleproducts plants in Zhengzhou were established in September 2010 andbegan the mass production of iPhones. Foxconn and Apple jointly investedUS$1.2 billion in Plants in Brazil (Tseng 2012). Thus, it seems that Foxconnhas tried any means necessary to keep relationship with Apple.
Foxconn workers often had to work overtime for the production of theiPhone 5. If Foxconn received more orders from Apple, workers wouldexperience more pressure. An interviewee (C13) said “I was totally exhaus-ted… the only idea in my mind was throwing those iPhone 5 s away.” Appletolerated no flaws, nevertheless. As the worker reported, “… if they foundany machine defects, we were in big trouble.” The media suspected thatthe riots in Chengdu and Taiyuan were related to trans-provincial mobiliza-tion, with laborers being requested to work overtime to meet the iPhone 5deadline (BBC News 2012; Reisinger 2012).
Based on an analysis of the Apple–Foxconn GVC, brand ownersdominate global capitalism more than before, forcing OEMs (i.e., Foxconn)to change their corporate governance and division of labor. This partlycaused the fragmented and chaotic structure, as well as the arbitrarymanagement of the world factory.
Fragmented Management
Fragmented management is another feature of global fragmenteddespotism. First, management is vertically divided by the GVCs and the
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BGs/BUs; such structures of corporate governance and the incentives lead torampant managerial factionalism. In our fieldwork, we realized that thereare more than sixteen BG under Foxconn, each serving various brandowners in GVCs. Second, management is horizontally divided based ongender and ethnicity, leading to distrust and a lack of communicationbetween managers and shop floor workers. Taiwanese expatriates and localmanagers and workers are horizontally split and the power struggles andantagonism are often seen in the workplace.
Business Groups and Factionalism
A high-level manager (T4) informed us that Foxconn is still managed as anSME at the top level, suggesting that the factory regime is far from beinginstitutionalized. Due to difficulty accommodating the multiple demandsof brand owners and the rapidly expanding bureaucratic structure, the topleadership at Foxconn decentralized the power and allowed each BG to havecontrol in governing its own plants.
At Foxconn, the total revenue of BGs and BUs instead of profit is theonly indicator of performance. As a result, the Taiwanese leadership ofBGs and BUs compete to maximize their revenue, which is closely linkedto managers’ seasonal/annual bonuses and subsidies (Field notes, T5, C1).This partly explains why the group aggregate revenues contribute to nearly21 percent of Taiwan’s GDP, even if its profit margin was relatively low foryears (2.4 percent in 2013).
To boost revenue rather than profit, Taiwanese managers at each BG/BUhad control of human resources, technology development, sales, manufac-turing, and part of the finances at each plant. Such a decentralized strategyresulted in heterogeneity of management among BGs and BUs; staffmembers with the same positions and seniority may be subject to differentstandards for remunerations and promotions (Field notes, C7, C10).Nevertheless, when the group reallocated employees among BGs andBUs, a typical practice in response to rapid changes in the market, it oftenresulted in difficulties and struggles between management and employees.
To follow clients’ requirements or to maximize revenue, each BG and BUsometimes has to be divided or merged with others. The reorganization ofBGs or BUs, often involved the decisions about revenue redistribution,top managers’ bonuses, and the belongings of clients, leading to powerstruggles among Taiwanese managerial factions.
Therefore, the relationship among BGs was more competitive thancooperative, heavily shaped by the incentive structure of the managementwithin Foxconn. As our interviewees (T2, T4, T6) mentioned, “the invasionof the turf” occurs frequently, particularly when one BG needs to expand itsrevenue. “Invasion of turf” sometimes refers to the taking over of a client orthe authorization of particular products. The competition results in
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factionalism and political alliances among top Taiwanese management, assuch, at least five factions were reported to compete for power. ThusFoxconn maintains flexible and fragmented internal structure. New BUsmay be established or dismissed abruptly as a result that clients raise newdemands, withdraw orders, or simply one faction wins in power struggles.
Internal Labor Markets and Coercive Apparatus
Similar to the practice of internal labor market in American firms (Edwards1979), Foxconn attempted to establish a dual structure to regulate BGs bydividing employees into “engineers” and “operators.” The former includedmanagers and engineers and the latter were foremen and forewomen, as wellas unskilled workers. In most BGs, the “engineer” hierarchical systemranged from E14 to E1 (varying among BGs) and followed the Taiwanesemilitary system, starting from vice chairman and moving downward throughgeneral manager, vice president, director, manager, assistant manager,junior manager, section manager, and team leader. According to our inter-views, despite the various managerial titles in the employment structure,“engineers” typically account for less than 15 percent of the total employees.
At the bottom of the world factory regime, the “operators,” ranging fromO3 to O1, were always migrant workers, for whom promotion from O1 toO3 took two to three years, after which they could be foremen andforewomen and supervise dozens of workers on an assembly line. Onlya few senior operators, mostly men, could be promoted to engineers, whereasfemale operators who were promoted were suspected of having affairs withtheir bosses. College graduates from Chinese universities usually started asE1 s, and it took several years for them to be promoted to an E4, the highestposition that most Chinese college graduates could attain. Only a few Chinesemanagers could break the glass ceiling to be promoted to E5–E7.
Taiwanese employees always begin as E3 s and monopolize the high-level managerial positions at the levels of E7 or above. Hon Hai hires mostengineers and managers from Taiwan and dispatches them to FoxconnChina, who were protected by relevant employment laws in Taiwan; thatis, their wages and welfare were not regulated by the labor law or socialinsurance policies of the People’s Republic of China. In contrast toTaiwanese expatriates, their mainland colleagues received fewer benefitsand bonuses, with limited channels for promotion. Taiwanese expatriatesare almost guaranteed for promotions, decided by Terry Gou, whereasthe promotions for mainland workers are at the hands of high-levelmanagers from Taiwan.
It is difficult for Chinese employees to become senior managers. Theyneed to work for more than seven years at Foxconn to be considered fora promotion to a mid-level (E4–E7) supervisor or manager position (Field
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notes, C1). A notable case is that a mainland manager, after being promotedto vice president, was attacked by allied Taiwanese managers and thereforequit. Seeing the “glass ceiling” effect, local employees were less loyal to theircompanies. They stayed only for the higher wages from overtime paymentand would not usually leave unless they received a better offer from anothercompany, thus employment turnout rates were very high at Foxconn.
Given the fact that high-level management positions were mostlyoccupied by Taiwanese expatriates, Foxconn established the CSD, consistedof mainland employees, to prevent Taiwanese managers from collusion andcorruption, as well as power struggles. Several high-level managers, forexample, claimed that their cellular phones were frequently wiretapped bythe CSD. This allegation was confirmed in the Foxconn corruption case thatrecently unfolded. According to the mass media, the Taiwanese clique in the“Surface Mount Technology” (SMT) committee, which was formed tocentralize the purchase of machine tools in Foxconn, was found to receivekickbacks. Based on the evidence collected by CSD for months, TerryGou called the police who arrested several top managers during office hoursin Longhua, Shenzhen. This case illustrates how corrupted managersfostered their own networks and how CSD surveillance is used to checkagainst them (Wen and Liao 2013).
The tactics of divisions and rules led to a deep sense of distrust andinsecurity between Taiwanese and mainland employees. To avoid blameand punishment from Taiwanese managers, the low-rank local managersand forepersons tend to cover up the mistakes and mistreatment of workerson the shop floor. They even attacked or set each other up. The antagonismbetween expatriates and locals, to a certain extent, has ignored workers’discontent and psychological pressure for years.
Despotism on the Shop Floor
Games on the Shop Floor
How did managers and workers in the world factory organize the shopfloor? Foxconn workers were paid a base salary per month, withincrements over time. The rate of remuneration usually was determinedby industrial engineers, many of whom were hired by the brand owners.Some interviewees (C21 and C22) talked about the tension between indus-trial engineers and workers, which was similar to that in Roy’s factorydescribed by Burawoy ([1979] 2005). If the brands’ engineers did not trustengineers at Foxconn, they would intervene and change the division oflabor on the line to facilitate production, often instigating workers’ strongresistance.
Whereas mistreatment of line leaders and security guards has receivedpublic attention, direct violence is rarely applied to foremen and forewomen.
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An interviewee (C22) mentioned that some workers beaten by line leaders onthe shop floor made violent reprisals outside the factory after work. Toavoid the risk of reprisals and to reward and discipline workers, line leaderstypically utilize their autonomous power in hanging shifts, dividing labor,providing opportunities for overtime work, and fining employees formistakes. Others, who could have links to organized crimes, relied on othermeans, such as organizing gambling and cheating junior line workers, whothen had to borrow money and thus obey management. Managers oftenused abusive language to scold operators. According to interviewee C5,a team leader at Longhua branch of Foxconn, said, “A line worker, whoaccidentally damaged a product, was continuously reprimanded by his lineleader, deputy supervisor, supervisor, section manager, assistant manager,and manager. He was fired in the end, and the line leader and supervisorreceived demerits.”
To cope with the pressure from managers and forepersons, productionline operators typically adopted a strategy very similar to the “making-out,” a term that Burawoy ([1979] 2005) used to describe the game on theshop floor. The Chinese government intended to set up a minimum wage,to protect the wellbeing of marginal workers, yet the minimum wage wastoo little to afford workers and their family a decent life in the cities. There-fore, they have to rely on overtime pay to increase their incomes. Some ofthem worked over time far more than 36 hours per month, the upper limitset by the Labor Law of China (Pun and Lu 2010). Under these circum-stances, we see a similarity between the Foxconn workplaces in twenty-firstcentury China and what Roy described in the midst of the twentieth centuryAmerica (op. cit. Burawoy [1979] 2005). According to Roy, the piece-ratesystem would result in an “output restriction,” under which workers slowedthe production speed or hid their outputs collectively to prevent the indus-trial engineers from increasing the production rate later. Foxconn workersplayed a similar game in a slightly different way. To increase wages, theywasted regular worktime intentionally to earn overtime pay. As one intervie-wee said, “we ran personal errands on company time and completed theworkload off time so that we could receive extra money!” (Field notes,C7). Foremen and forewomen had no intention of changing the rulesof the “overtime” game since they had also benefited from it. Thus the“overtime” game was utilized in a way to compensate for the low base salaryat Foxconn, often leading to longer work hours against labor regulations inmost plants.
Manufacturing Suicide
The suicide rate among workers in recent years may be linked to thedespotism on the shop floor. Whereas the media and public tend to perceiveFoxconn as a sweatshop that wields military-style management, we argue
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that the intervention from the global brand owners, together with Foxconn’sfragmented governance, is an important institutional factor that causessuicides. We use the story of a suicide survivor to illustrate this point inthe following.
Tian Yu, from a village in Hubei province, was one of the few suicidesurvivors at Foxconn. Being paralyzed from the waist down and boundto a wheelchair now, the young girl was optimistic and willing to shareher feelings to help us understand more comprehensively the contour ofsuicides. Tian Yu was interviewed in Guanlan, another Foxconn plant inShenzhen, and had worked in Longhua for one month. Because of thegrueling workload, she decided to quit this job. To receive her final paymentfor the wage, Tian Yu was forced to produce her salary slip because the shiftleaders in both Longhua and Guanlan denied to pay her. OnMarch 17, 2010,Yu spent an entire day traveling back and forth between the two plants. Tomake matters worse, she ran out of money and her cell phone service wascut off. Walking 15 kilometers back to Longhua, Tian Yu was desperate,jumping from her fourth floor dormitory (Chan, Pun, and Selden 2013).
As we argue, such tragedies are deeply rooted in the fragmentedand chaotic structure of the Foxconn group. In response to the harshcompetition in the market, BGs constantly adjusted the internal structureand personnel allocation, sometime arbitrarily. As a result, there is nocoherent information and close collaboration within Foxconn. Moreover,workers from the same provinces are often assigned to different dormitoriesand workplaces to prevent them from forming social circles. Therefore,depressed workers with emotional problems would be able to find a closefriend or acquaintance to talk to. Such a chaotic and individualistic systemof employment has resulted in a weak social network in the workplace. Withlittle support from social networks, many workers had difficulty dealingwith their mental health problems arising from either workplace or personallife, culminating in suicide in some cases.
We analyzed thirty-nine suicide cases in 2007, which are listed in Table 3.Similar to Tian Yu, most victims were younger than 25 years old, cross-provincial migrants who left their hometown for the first time to work inFoxconn (only one was from Guangdong). Some reports claimed that theseyoung migrant men and women, via a randomly assigned dormitory system,were living in an atomized environment, and socially isolated. Even worse,some suicide cases were due to bullies in the dormitory, in addition to thosebullies by forepersons and security on the shop floor.
The Management of Suicide Crisis
The jumping incidents were exposed to the public in mid-May, 2010; Apple,Foxconn, and the Chinese government were all involved in the managementof the crisis. The Chinese government and Apple directly intervened in the
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Tab
le3
ListofSuicideCas
esin
Foxc
onnin
New
sCove
rage,
2007
–20
14
No
Date
Suicide
site
Sex
Age
Birthp
lace
Nam
eNoteof
even
t
120
07-06-18
N/A
FN/A
Zhe
jiang
Hou
Han
gedhimse
lfin
hisFox
conn
dorm
itory
room
.
220
07-09-01
N/A
M21
N/A
Liu,
Bing
N/A
320
08-03-16
Yan
tai
N/A
28N/A
LiN/A
420
09-07-15
Gua
nlan
M25
Yun
nan
Sun
,Dan
-yon
gWith
outan
yev
iden
ce,theCSD
(nam
ely,
Env
ironm
ent,Hea
lth,a
ndSafetyde
partmen
t)su
spec
tedthat
Sun
stoleon
eof
sixtee
niPho
nesa
mples
.Duringtheinve
stigation,
Sun
was
violen
tlyattack
ed,he
ldin
custod
y,an
dun
lawfully
search
ed.
520
09-11-04
Long
hua
M23
Gua
ngdo
ngTan
,Guo
-xi
Tan
’sdirector
verbally
abus
edhim
before
Tan
was
offdu
ty.Hum
iliated
,Tan
jumpe
dto
his
deathfrom
thefifth
floor
oftheplan
t.
620
10-01-08
Lang
fang
M19
Heb
eiRon
g,Bo
Ron
g’sfather
spec
ulated
whe
ther
Ron
gwas
bullied
intheplan
tbe
fore
hissu
icide.
720
10-01-23
Gua
nlan
M19
Hen
anMa,
Xiang
-qian
Ma’ssister
didno
tbe
lieve
that
herbrothe
rco
mmitted
suicide.
She
foun
dasc
aron
Ma’s
forehe
adan
dch
estan
dbloo
dstainson
his
nose
.Moreo
ver,Maon
ceinform
edhisfamily
that
hewas
bullied
attheplan
t.The
police
stated
that
Ma’sde
athwas
anac
cide
nt.
(Con
tinu
ed)
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Tab
le3
Continued
No
Date
Suicide
site
Sex
Age
Birthp
lace
Nam
eNoteof
even
t
820
10-02-22
Lang
fang
F16
Heb
eiWan
g,Ling
-yan
Sus
pected
suicideor
“karos
hi”(i.e.,de
athfrom
overwork).A
doctor
diag
nose
dhe
rdea
thas
asu
dden
cardiacde
ath.
Wan
g’smothe
rreca
lledLing
-Yan
’slast
phon
eca
ll,repo
rting
that
herda
ughter
complaine
dab
outthe
gloo
mylifein
thefactory,
particularly
her
inab
ility
toch
atwith
othe
rsin
thedo
rmito
ry.
920
10-03-11
Long
hua
M20
þHen
anLi
One
ofthese
riesof
suicidejumpe
rs.
1020
10-03-17
Long
hua
F17
Hub
eiTian,
Yu
Afte
rworking
foramon
th,ev
eryo
nerece
ived
theirwag
esex
cept
Tian.
Exh
austed
and
desp
erate,
shejumpe
dfrom
thefourth
floor
ofhe
rdo
rmito
rybu
ilding.
Tianwas
oneof
the
few
survivorsof
theFox
conn
jumpe
rs.
1120
10-03-23
Lang
fang
M23
Heb
eiLi,Zhu
anOne
ofthese
riesof
suicidejumpe
rs.
1220
10-03-29
Long
hua
M23
Hun
anLiu,
Zhi-ju
nOne
ofthese
riesof
suicidejumpe
rs.
1320
10-04-06
Gua
nlan
F18
Jian
gxi
Rao
,Shu
-qin
One
ofthese
riesof
suicidejumpe
rs.
1420
10-04-07
Gua
nlan
F18
Yun
nan
Ning
One
ofthese
riesof
suicidejumpe
rs.
1520
10-04-07
Gua
nlan
M22
N/A
N/A
One
ofthese
riesof
suicidejumpe
rs.
1620
10-05-06
Long
hua
M24
Hun
anLu
,Xin
One
ofthese
riesof
suicidejumpe
rs.Sou
thern
Wee
klystated
that
this
was
these
venth
incide
ntsinc
eJa
nuary20
10.Lu
’sfriend
,Tse
ng,told
arepo
rter
that
Lurepe
ated
lystated
that
hewas
beingfollo
wed
and
threaten
ed.
(Con
tinu
ed)
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Tab
le3
Continued
No
Date
Suicide
site
Sex
Age
Birthp
lace
Nam
eNoteof
even
t
1720
10-05-11
Long
hua
F24
Hen
anZhu
,Che
n-ming
One
ofthese
riesof
suicidejumpe
rs.
1820
10-05-14
Long
hua
M21
Anh
uiLian
g,Cha
oOne
ofthese
riesof
suicidejumpe
rs.
1920
10-05-21
Long
hua
M21
Hub
eiNa,
Gan
gOne
ofthese
riesof
suicidejumpe
rs.
2020
10-05-25
Gua
nlan
M19
Hun
anLi,Hai
One
ofthese
riesof
suicidejumpe
rs.
2120
10-05-26
Long
hua
M23
Gan
suHe
One
ofthese
riesof
suicidejumpe
rs.
2220
10-05-27
Long
hua
M25
Hun
anChe
nOne
ofthese
riesof
suicidejumpe
rs.
2320
10-07-20
Nan
hai
M18
Heb
eiLiu
One
ofthese
riesof
suicidejumpe
rs.
2420
10-08-04
Kun
shan
F23
Jian
gsu
Liu
One
ofthese
riesof
suicidejumpe
rs.
2520
10-11-05
Gua
nlan
M23
Hun
anHe
The
“final”incide
ntin
these
riesof
suicide
jumpe
rsmen
tione
dby
mas
smed
ia.
2620
11-01-07
Long
hua
F25
Heb
eiWan
g,Ling
N/A
2720
11-05-26
Che
ngdu
M20
N/A
Hou
N/A
2820
11-07-18
Long
hua
M21
N/A
N/A
N/A
2920
11-11-23
Taiyu
anF
21Sha
nxi
Li,Ron
g-ying
N/A
3020
12-01-01
Yan
tai
MN/A
N/A
Jia,
Pen
g-ran
Working
inCCPBG-C
NP.
3120
12-09-12
Gua
nlan
N/A
22Heilong
-jian
gYan
gN/A
3220
13-04-24
Zhe
ngzh
ouM
24Hen
anYao
The
Fox
conn
labo
run
ionstated
that
Yao
was
notan
employ
eeof
Fox
conn
.Som
eun
ion
mem
bers
stated
that
Yao
hadno
tsign
eda
contract
beca
usehe
hadbe
enin
theplan
tfor
only
threeda
ys.
(Con
tinu
ed)
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Tab
le3
Continued
No
Date
Suicide
site
Sex
Age
Birthp
lace
Nam
eNoteof
even
t
3320
13-04-27
Zhe
ngzh
ouF
23Hen
anJin
N/A
3420
13-05-14
Zhe
ngzh
ouM
30N/A
N/A
N/A
3520
13-12-26
Long
hua
M28
Jung
xian
LIANG,Yon
g-ch
aoLian
gha
dworke
dat
Fox
conn
forsixmon
thsin
thelogisticsde
partmen
t.Bas
edon
Lian
g’s
payslip,on
eof
hisco
lleag
ueses
timated
the
overtim
eat
approx
imately60
hoursin
Nov
embe
ran
d88
hoursin
Octob
er.
3620
14-01-10
Long
hua
M23
Hub
eiCHEN,Fen
gBeforejumping
from
afactorybu
ildingto
commit
suicide,
Che
nleftso
mewords
viaQzo
ne,the
bigg
estso
cial
netw
orksite
inChina
,to
expres
shisdisa
ppointmen
tto
hisfamily.
3720
14-02-18
Long
hua
F21
Hen
anZHANG,Qing-wen
Zha
ng’s
mothe
rsu
spec
tedthat
herda
ughter
was
murde
redbe
caus
etheloca
lgov
ernm
ent
was
angryat
her(Zha
ng’s
mothe
r)ap
peal
toahigh
erco
urtab
outtheco
rrup
tion.
The
reas
onZha
ngco
mmitted
suicidewas
still
unde
rinve
stigation.
3820
14-07-27
Long
hua
M22
Hun
anKANG
Anas
semblylin
eworke
ratF
oxco
nnsinc
e20
11,
Kan
gjumpe
dfrom
these
venthflo
orof
ado
rmito
rybu
ildingan
ddied
instan
tly.
3920
14-09-30
She
nzhe
nM
21Gua
ngdo
ngXU,Li-zhi
Xujumpe
dfrom
hisrental
quarters.Itwas
said
that
heco
mmitted
suicidebe
caus
eof
diss
atisfactionwith
life.
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“overtime” game on the shop floor, resulting in the immediate cancellationof overtime payment in some BUs. While most interviewees expressedtheir strong reservation on the change, this did not mean that they enjoyedworking overtime. As one worker (C7) said, “do you really think that I loveovertime? I will be pleased when my base salary is increased.”
Ironically, overtime payment that was once viewed as an advantagecompared to other factories is now a factor that provokes internal conflictsand even stimulates strikes later on. To control their overall salary budgets,many BUs have limited engineers’ salaries in order to pay more to the levelpaid to operators. Entry-level (E1) engineers, for example, had almost noincrease in pay except for year-end bonuses. In a certain sense, suicides haveled to the increase in operators’ legal minimum wage, which is at the expenseof the salaries of Chinese managers at low levels and forepersons on theshop floor. From the fieldwork interviews, we learned that more “wildcatstrikes” occurred because Chinese managers, engineers, and foremen andforewomen were dissatisfied with their decreasing incomes. They led strikes,followed by their line operators.
Not until the exposure of the jumping incidents had the public noticedthat there was no labor union in Foxconn for years, which should beestablished as stipulated by the Chinese Labor Law. Foxconn establisheda union in March 2007, but it was seen as a “yellow dog.” The chairmanof the union was also Terry Gou’s executive assistant (Pun and Chan2012). Most interviewees doubted the effectiveness of the union in protectinglabor rights.
After the jumping incidents, the union set up a hotline for workers tovoice their discontent. According to our interviewees, if the discontent ison the dormitory conditions, the problems will be addressed immediately.However, if workers complained about line management, they were oftenfired afterwards (C21, C22). A Taiwanese manager (T7) expressedhis personal problems, but received a reply from the union that “we areresponsible for Chinese workers only” (Field notes, T7). In Chengdu,as a gesture to show their concern with labor conditions, with the help fromlocal government, the union established some models of “youth apartments”with gyms, swimming pools, and Internet bars. However, some workerscomplained that, after the long work hours, they had little time to enjoythe facilities. Hence, these observations, contradictory to each other, makingit difficult to evaluate whether labor conditions have improved after suicideincidents were exposed to the public in Foxconn.
Workers’ Resistance
As narrated earlier, the restriction on overtime work helped to relieve work-ers’ stress, but their total income received decreased at the same time. Afterthe new policy on overtime work was introduced, production line workers
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made more complaints, and started more wildcat strikes. Moreover, toprocess more orders for the iPad and iPhone 5, as well as to avoid publicattention due to workers’ suicides, Foxconn expanded its plants to inlandregions, such as Sichuan and Henan provinces, where local governmentswere willing to embrace Foxconn’s investment and to serve as laborrecruitment agencies. Workers are redeployed from all over the countrywhen employees are insufficient to meet the demands. Such reallocationshave brought more chaos to internal management and created moreconflicts between managers and workers within Foxconn.
We analyzed seventeen cases that involved workers’ collective actionsfrom 2010 to 2014 (Appendix Table 1). As we have seen, most disputes weredue to the decrease in income without overtime pay, the reallocation ofmigrant workers to provinces where the minimum wage was set lower, orthe conflicts with local security in which the CSD was in charge. Forinstance, in Hubei in January 2012, there were 300 local workers, one ofwhom was an interviewee we met in Shenzhen (C11), but was transferredback to Hubei, threatened to commit suicide after the denial of pay increase.Similar protests occurred elsewhere, such as Chengdu (Apple Daily HongKong 2012a), Taiyuan (Apple Daily Hong Kong 2012b), Chongching(MyDrivers.com), Shenzhen (NetEase 2013a, 2013b), and Yantai (NetEase2013c).
The features of these collective resistances, as scholars on the Chinese“insurgency trap” (Friedman 2014; Gallagher 2014) have argued, departedfrom institutionalized labor movements. Since official unions do little torelieve worker’ plight, various forms of wildcat strikes and perturbationsoccur. Most labor disputes in Foxconn occurred because of the long-distance reallocation of workers for rush orders of brands, typically led byforepersons and low-rank engineers, whose income was affected by therestriction of overtime work and pay, whereas operators’ base salaries wereincreased. In many cases, the variant compensation and promotion rulesbetween managers and workers among different BGs and BUs withinFoxconn have created employees’ discontent with regard to regardinginequality, discrimination, and unfairness. All of which would not occur in atransparent and well-organized company. In sum, the chaotic and fragmentedmanagement, associated with the global market demand, particularly fromApple, has instigated the resistance from workers in Foxconn.
Discussion and Conclusion
Existing sociological literature on workers’ condition in Foxconn hasfocused either on workers’ alienation at the microlevel in the Durkheimianperspective or on the class formation at the structural level from theMarxian perspective. In this paper, we went beyond the divide and proposeda new concept to characterize the world factory regime, and argue that
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the world factory in China can be characterized as “global fragmenteddespotism,” a subtype of capitalist production regime. By “global” we meanit has the strong influence of global brand owners through GVCs;“fragmented” referred to the vertical, horizontal, and geographical segre-gation of employees; whereas “despotism” referred to the coercive apparatusand arbitrary managerial power on the shop floor. Based on the extendedand productive fieldwork we conducted from 2010 to 2014, we describedthe involvement of the global brands in the factory, chaotic management,and their linkages to workplace despotism.
We argue that some features of the global fragmented despotism were heldresponsible for workers’ suicides and resistance in Foxconn. The clients’ harshdemands, particularly from Apple, forced Foxconn to constantly reorganizeits corporate governance structure and reallocate assembly lines. As with theDurkheimian studies, we found that workers, atomized in the world factoryregime would have been left in helpless situations. To avoid the publicconcern about workers’ suicide incidents, Apple and Foxconn adjustedthe strategies to reallocate some plants to inland areas, to change thedistribution of salary and benefits between forepersons and line workers,and to expose more inequality and discrimination within the firm. Ironically,such changes have created even more discontent and resistance amongworkers, as well as mainland managers. In this sense, under the globalfragmented despotism, the management of crisis did not ease the tensionbut sparked more collective resistance.
To some extent, the Chinese government shall be held responsible for thelaissez-faire policy in the labor market. The arbitrary management inside thefactory was made possible by the large pool of rural migrant workers whoare socially excluded based on their household registration status (hukou)(Jieh-min 2010). When the local government attempted to enforce the laborlaw in response to the public outcry of the jumping incidents, throughimplementing the legal minimum wage, albeit very low, and restrictingovertime work, such changes ironically created more discontent amongworkers and stimulated more wildcat strikes and riots, because workers’total compensations decreased as a result.
Given the saturation of the electronic products market, the world factoryregime is facing its own profit-margin crisis. Without an increase in R&D,Foxconn cannot effectively upgrade its industrial technology. Its revenueis gradually shrinking due to Apple’s alliance with other OEMs and thepolitical pressure from the Chinese government on the protection of laborrights. Foxconn may also face further challenges of the shortage of migrantlabor and rising labor resistance, intensified by the decentralized structure ofglobal fragmented despotism, leading to under the diminish of its revenue.Workers’ suicide and resistance, which have caught much attention fromthe public and media, are the result of the practice of global fragmenteddespotism, exemplified in Foxconn factories.
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Nevertheless, the decline of Foxconn may not end the exploitation underglobal capitalism. Many preconditions to foster the model of globalfragmented despotism, namely a competitive global market dominated by afew powerful brands, the low standard for state regulations and social welfareunder authoritarianism, and the large supply of rural migrant workers con-tinue to exist in China, especially in inland provinces, perhaps also in manyother developing countries to which global capitalism is expanding, may con-tinue to exist for a long period of time. Therefore, our concept and study ofFoxconn may contribute to the factory regime analyses of GVCs in the future.
Acknowledgements
We would like to thank the anonymous interviewees, who may still exist orwork at Foxconn. We benefited from the help and comments from PunNgai, Jenny Chan, May Szeto, YC Chen, Parry Leung, Daniel Yang,Xiaogang Wu, Huilin Lu, Zhong Hua, Jieh-min Wu, Jay Chen, Szu-chienHsu, Mingsho Ho, and Chris Tilly, as well as the participants of the LaborMovement Session at the 2014 annual meeting of the American SociologicalAssociation. We thank the anonymous reviewers for their excellentsuggestions. Rico Yang provided valuable research assistance.
Funding
The study is supported by the Taiwanese Ministry of Science andTechnology project no. 103-2420-H-001-002-MY2.
Note
1. Hon Hai Precision Industry Co., Ltd. was founded by its Chairman TerryGou near Taipei in 1974 as a manufacturer of electrical components. In 1988, theFoxconn Technology Group was created as a subcompany in Longhua, Shenzhen,and moved to the Science and Technology Park in 1996. It has become a majorsubcontractor for Dell, Nokia, HP, and other global brands since the beginning ofthe 2000 s. As the largest private employer in the world, Foxconn hired almost 1.3million workers in 2013. In this paper, we use the term “Foxconn” to refer to firmsin which the Hon Hai group invested heavily. Foxconn has been recognized as a typicalworld factory in China.
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About the Authors
Thung-hong Lin is an associate research fellow and joint appointment associateprofessor at the Institute of Sociology, Academia Sinica, and National TsinghuaUniversity. He is interested in social stratification, sociology of disasters, andlabor studies.
Yi-ling Lin contributed to the fieldwork and writing of this paper. She is nowa research assistant at Academia Sinica.
Wei-lin Tseng’s master thesis studied the Foxconn workers and contributed tothe concept and fieldwork of this paper. She worked for the Economic DailyNews as a journalist and is now a freelancer. (She is finding a job now. Thusthe short-bio has to be revised later.)
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Appendix Table 1
The News Events about Collective Labor Disputes in China, 2010–2014
Year/Month Location No. of people Event
2010/11 Foshan 6,000–7,000 Foxconn workers protested their lowwages and opposed the factory’s planto move the plants to inner provinces inChina. They claimed that they hadasked high-level administrators to raisetheir wages. However, they werethreatened with dismissal. Oneanonymous worker stated that a noticewarned them not to go on strike or theywould lose their jobs. Another workersaid that their monthly salary was lowerthan promised.
2012/01 Wuhan 150 Foxconn workers threatened masssuicide, and one of them was ourinterviewee. The workers wereeventually coaxed down by Foxconnmanagers and local ChineseCommunist Party officials after twodays on the roof of their three-floorplant in Wuhan. The latest protestbegan on January 2 after managersreassigned approximately 600 workersto a new production line, makingcomputer cases for Acer, a Taiwanesecomputer company.
2012/01 Yantai 1,000þ Foxconn Yantai workers went on strikebecause of the disparity in salaryamong workers. A high-level executiveexplained that this was a new rule.The factory administrators separatedworkers to disperse the mob. One ofthe workers stated that all workers weredirected to raise the salary toRMB1,750 in September. Although allof the workers had been promoted toE1 (the lowest level of Foxconn officialemployees), they did not receive thecommensurate salary.
2012/01 Jiangxi 1,000þ On January 11, approximately 1,000workers staged a protest. They wenton strike in the factory on January 10 toprotest the low wages, unbalanced payraises, terrible food, and rigidmanagement. Some workers werereportedly arrested during the
(Continued )
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Appendix Table 1 Continued
Year/Month Location No. of people Event
demonstration. One worker said thateveryone was still required to deductRMB9 from their own food stipends andRMB80 from their wages.
2012/03 Shanxi,Taiyuan
100þ Workers at the A9 plant in Taiyuan,Shanxi, went on strike because of thewage adjustment. Some of the workersstated that the wage adjustment wasonly for administrators and technicians.E1 workers in particular did not benefitfrom the wage adjustment.
2012/04 Wuhan 100þ To protest low wages, approximately 100workers gathered on a roof andthreatened to jump from the building.According to an anonymous worker,these workers were working at DT2,PCEBG (Personal Computer EnclosureGroup). After combining the DT2 fromShenzhen and Yantai, the Wuhanadministration began to regulateadditional overtime hours whiledemanding that employees increaseproduction. Thus, the income wasreduced.
2012/06 Chengdu 1,000þ As two security guards were pursuing athief and shouting for help, someworkers who resented the guardsgathered to interfere a disturbance.Approximately 1,000 workers threwtrash bins, stools, washbasins,firecrackers, and beer cans from thedormitories, destroying facilities andcausing chaos. The factory called thepolice, and some workers werearrested.
2012/09 Shanxi,Taiyuan
2,000þ In a riot in Taiyuan, Shanxi, thousands ofworkers destroyed various items andeven set fire to cars. Local policeofficers suppressed the riot; reportedly,at least ten people were killed.Anonymous source stated that the riotwas caused by workers whodissatisfied with the adjustment ofovertime regulations. Foxconn workersfrom various provinces wereassembled in Taiyuan to meet theproduction deadline of the iPhone 5release. The riot originated from a fight
(Continued )
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Appendix Table 1 Continued
Year/Month Location No. of people Event
between Hunan workers and securityguards. The Hunan workers werebeaten severely, which caused the riot.After drinking alcohol, the Hunanworkers quarreled with the securityguards. Other workers heard the noiseand then gathered, smashing all thesafety facilities in the plant and ignitingthe security guards’ electric bikes. At2:00 AM, local and antiriot policearrived to beat and detain workers. Theseverity of the riot prompted Foxconnto close the plant for 1 day, and thetraffic had to be controlled within 2kilometers of the plant.
2012/10 Chenzhou 3,000–4,000 China Labor Watch reported that the riotat Foxconn-Chenzhou occurredbecause of rigid quality inspection.Workers from the production linescalled a strike to protest theunreasonable iPhone 5 qualityinspections. Workers and inspectorshad quarrels and fistfights during thestrike. Because some iPhone 5 userscomplained that the paint was peelingoff the outer shell, Apple directedFoxconn to address the matter. Thus,Foxconn adopted a considerably morerigid quality inspection to check theouter shells. Another possible factorcontributing to the riot was therequirement to work on holidays.
2012/11 Shenzhen 5,000 Liberty Times Net reported that a riotoccurred at Longhua, Shenzhen, inwhich approximately 5,000 workersgathered to protest the bullying fromsecurity guards. However, Foxconnannounced that the conflict was not ariot but a personal gambling quarrel.
2013/01 Beijing 1,000þ Approximately 1,000 workers gathered ina restaurant, demanding that the high-level executives respond to the arrearof year-end bonuses. Because thefactory did not answer the questionsclearly and directly, the workers wenton strike until midnight. The localgovernment assigned the police tocontrol the situation.
(Continued )
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Appendix Table 1 Continued
Year/Month Location No. of people Event
2013/06 Longhua,Shenzhen
3,400þ Innolux Display Group temporarily shutdown in May for a month. According toinformed sources, at least 3,000workers were rerouted; however, theyrejected to be assigned to differentplants. Instead, the involved employeesrequested that the company lay off thestaff to allow them to gaincompensation.
2013/07 Shenzhen 200 Although a Foxconn spokesperson deniedthe strike, 200 CCPBG workers did notshow up for work. They walked directlyto the headquarters of the labor union,shouting the slogan: “Raise our wage!”One of the participants said to areporter that Foxconn raised the wagesby 20 percent for technicians in aspecific department, but others did notreceive equal raises. Moreover, theannual bonus was not paid on time.Working overtime was another factorthat contributed to the strike. Foxconnlimited the overtime; however, itreduced the total wage.
2013/07 Foshan 1,500þ Approximately 1,000 workers gathered inthe halls and refused to work, statingthat Foxconn did not follow the originalcontract and continued to postpone theend of the workday.
2013/09 Yantai 300–400 A massive fight broke out at Foxconn’sYantai factory during the Mid-AutumnFestival. More than 200 workers fromGuizhou beat workers from Shandong.Although the military police were calledto quell the riot, another violentoutbreak occurred the next day.Reports claimed that the riot led tothree deaths, injured at least twentyworkers, and resulted in hundreds ofarrests. The riot was reportedly causedby a quarrel in an Internet cafÉbetween two female workers.
2013/12 Chongqing 100 Nearly 100 Chongqing Foxconn workerswent on strike because of low wages.The 2-day strike occurred because of adispute over pay and uneven raiseadjustments.
(Continued )
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Appendix Table 1 Continued
Year/Month Location No. of people Event
2014/06 Chongqing 800þ More than 800 Chongqing Foxconnworkers were involved in a dispute overseverance pay. The plant plans toterminate the notebook assemblingbusiness. However, sources reportedthat “operators” received no adequateseverance pay, whereas “engineers”did.
Note: we collected the news about Foxconn workers’ collective actions from English,Chinese, and Taiwanese mass media, but discovered all the relevant news uncovered afterthe series of “jumping incidents.”
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