Could Foxconn be looking at opening factories in the US?

Controversial Taiwanese manufacturer, Foxconn, is said to be looking at the possibility of opening several new factories in the US. The news comes as the company, one of the world”s largest employers with an 800,000 workforce in China, benefits from the booming sales of Apple products it assembles. Foxconn has been among a number of companies that have gained significantly from the decline of manufacturing in the West and the growing trend in outsourcing production, but it would represent a significant reversal in the labour drain should the company decide to open up an American factory.

Foxconn has been looking overseas for opportunities, at a time of rising costs in China, and sources have told the Taiwanese trade publication DigiTimes that the company has been evaluating cities across the US including Detroit and Los Angeles. However, the company would have to significantly change its business model if it does open operations in the US. For example in China workers are paid, despite recent significant pay rises, just a few hundred dollars a week and most live in dormitories. In its Chinese operations iPhones and iPads are put together largely by hand with little automation.

In the US, according to sources, Foxconn could look to specialise in flatscreen TV sets, which are easier to assemble with the help of robots. Apple has been planning to make an internet-connected television set, essentially combining a TV screen with a computer, for some time and if the work is contracted to Foxconn then it is rumoured that the new factories would be used to produce the iTV. If that were the case then the iTV would be the first Apple product made in the US for some years.

Foxconn’s chairman Terry Gou revealed last week that he was planning to invite dozens of American engineers to his factories in China to learn about manufacturing, but suggested that manufacturing was unlikely to see a significant return to the US because Americans have outsourced those jobs for too long. Gou also said he was already in discussion with the Massachusetts Institute of Technology about establishing an exchange programme.

Foxconn has a poor record when it comes to looking after its staff with high levels of worker suicides and industrial accidents that have provoked riots across its plants in China. A number of scandals as a result of poor working conditions earlier this year has proved a source of embarrassment to Apple whose chief executive Tim Cook was pressured into appointing an external auditor, the Fair Labor Association, to evaluate conditions throughout its supply chain after a string of workers killed themselves and there was a lethal explosion at one of the company”s plants.

Foxconn has eight factories in Brazil and in September signed a memorandum of co-operation with the São Paolo government to invest $14m building a technological industrial plant. And Foxconn is planning to establish a phone factory in Indonesia by the end of 2012.