Foxconn is the exclusive manufacturer of Apple iPhones, with its factories in Shenzhen, China. As reported by AsiaOne, a former senior manager at Foxconn Taiwan has been indicted for stealing thousands of iPhones. According to the report, the manager is identified by his family name as Tsai, who worked in the testing department. He’s been accused of stealing and selling 5,700 iPhones in China to pocket around $1.56 million.
Reportedly, Tsai instructed eight employees of the factory to smuggle out thousands of iPhone 5 and 5s. These were the testing phones which were supposed to be scrapped, but Tsai and his accomplices sold them to store in Shenzhen for $1.56 million from 2013 to 2014. Foxconn reported this case to Taiwanese authorities. Further, an internal audit was conducted, and Tsai was questioned after his return to the island earlier this year and later released on bail. He has been charged with breach of trust and is facing ten years in jail.
Foxconn’s profit reportedly declined 31% in the second quarter of 2016, apparently, due to Apple iPhone’s poor sales performance same time this year. In that quarter, Foxconn made around $554.5 million, down from around $805 million in Q2 2015.
Foxconn is one of the world’s largest contract manufacturers that assemble products for international brands including Apple and Sony. It has around 1 million workers in its factories across China. However, this is not the first time that Foxconn employees have come under the scanner. Back in 2014, five former Foxconn employees were charged with breach of trust for accepting a bribe of $5 million by suppliers to clear the quality checks and buy equipment. All of them faced the ten years and six months in jail.
Foxconn had been under controversies since a long time for its factories’ working conditions as well. It has been accused of violating labour rights for many years. Allegedly, they keep their employees in overcrowded dormitories. They were made to work for excessive hours without any compensation for the same. In its defence, Foxconn said that they did overtime voluntarily. They are even accused of controlling every aspect of the lives of these workers and interfering in their personal lives as well. In 2013, there was a report of 3 Foxconn employees committed suicide.
Also, in September 2012 and 2013, around 2000 workers started a riot protesting against growing economic pressure and poor working conditions. In May 2011, two Foxconn workers had died, and 16 were injured due to an explosion in one of the manufacturing plants. In January this year, a fire broke out in Foxconn’s main iPhone manufacturing facility in Zhengzhou, China.
For a company of this stature, it is highly embarrassing for Foxconn, over how they treat their employees and workers. In May 2016, Foxconn had reportedly replaced 60,000 factory workers with robots. Laying off this huge number of employees is against the Goodwill of any company.
However, Foxconn is reportedly exploring the feasibility of shifting iPhone production from China to the U.S. Since China has cheaper labour and hardware costs, moving to U.S. will definitely increase production costs of the iPhones. It is estimated that the cost would increase more than double. The new U.S. President-elect Donald Trump, have also offered ‘tax cuts’ and ‘regulation cuts’ to Apple if they move its production to U.S.