Foxconn Hints at Shutdown of its Chennai Factory

Contract manufacturer Foxconn is seen sending out signals that it is preparing for a permanent shutdown of its Chennai factory where work has been suspended for more than a month. At meetings with labour unions, the company is urging workers -who are now on a paid holiday -that they must accept a severance package, those aware of the discussions have told ET. Company representatives say finances required for factory upkeep has dried up. Communication with Foxconn headquarters in New Taipei, Taiwan, has become frequent to cover for expenses that were locally decided upon. The average salary for technical labour at the facility located inside the Nokia Telecom SEZ is 14,500 a month. With more is `than 1,300 such employees, Foxconn's monthly outgo towards salaries is about 1.9 crore. It also spends on power and water supply, and other mandatory licences required to run a factory inside the state's special economic zone.

Experts believe the paid-holiday policies are often adopted by multi-nationals to ensure their reputations are not hit during wind-down. “Is there a legal requirement to send them on paid-holidays? No.But companies often do that so that there is no bad blood in the community they served and made money from,“ said Aditya Narayan Mishra, president-staffing of Randstad India.

To read the full article, please click on the link below:

http://epaperbeta.timesofindia.com/Article.aspx?eid=31815&articlexml=Foxconn-Hints-at-Shutdown-of-its-Chennai-Factory-03022015010041