Foxconn, the world's largest contract manufacturer of mobile phones and electronics, is suspending production at its Sriperumbudur plant from the third week of December due to lack of orders, almost writing off its Rs.850 crore investment in India. Highly placed sources said the management had written to the Kancheepuram assistant commissioner of labour, stating they would suspend production in phases, starting December 15.
The fate of 1,306 direct employees and 189 technicians has now become uncertain. Foxconn came to India in 2006 after its most important client at that time, Nokia. The company had two units in Sriperumbudur HiTech SEZ and one in Nokia SEZ. At its peak, the company employed more than 6,800 people directly in the Nokia SEZ alone. The two other plants in Sriperumbudur HiTech SEZ have already been shut down as Nokia downsized orders to Foxconn.
The company will close its plastics division on December 15-16 and moulding division on December 22, thereby downing shutters at the plant. The Nokia SEZ unit supplied components to Nokia till October and to some firms in Vietnam.
The Foxconn management has begun exit dialogue with representatives of three trade unions, the DMK-backed Labour Progressive Front, AIADMK-backed Anna Thozhir Sanga Peravai (ATP) and the CITU-backed official union.
Foxconn had planned to make high-end iPhones and iPads off assembly lines in Sriperumbudur in 2010. A combination of poor industrial relations, trade union activism and lack of political support for business enterprise forced Foxconn, the largest contract manufacturer for Apple, to locate its iPhone and iPad production in Brazil, cutting off the prospect of 80,000 direct jobs in the suburb of Chennai.“The 2007 launch Apple's iPhone was a global hit. Foxconn was the contract manufacturer for Apple iPhone. In 2010-11 Foxconn did a preliminary study to make iPhones in India,“ sources said.
The end of the road for Foxconn is not a surprise to many . “In India, Foxconn's fortunes were directly linked to that of Nokia's. When Nokia started losing its market, orders started to drop for Foxconn and when Nokia shut down its Sriperumbudur plant, Foxconn didn't have much of a choice,“ sources said. The decision to suspend production comes as a huge blow for electronics manufacturing services in the Sriperumbudur region.
Billionaire Terry Gou promoted Foxconn, which ended last year with $127 billion in revenues, is the world's largest electronics contract manufacturer and a key supplier to Apple, HP and Sony.
The fate of 1,306 direct employees and 189 technicians has now become uncertain. Foxconn came to India in 2006 after its most important client at that time, Nokia. The company had two units in Sriperumbudur HiTech SEZ and one in Nokia SEZ. At its peak, the company employed more than 6,800 people directly in the Nokia SEZ alone. The two other plants in Sriperumbudur HiTech SEZ have already been shut down as Nokia downsized orders to Foxconn.
The company will close its plastics division on December 15-16 and moulding division on December 22, thereby downing shutters at the plant. The Nokia SEZ unit supplied components to Nokia till October and to some firms in Vietnam.
The Foxconn management has begun exit dialogue with representatives of three trade unions, the DMK-backed Labour Progressive Front, AIADMK-backed Anna Thozhir Sanga Peravai (ATP) and the CITU-backed official union.
Foxconn had planned to make high-end iPhones and iPads off assembly lines in Sriperumbudur in 2010. A combination of poor industrial relations, trade union activism and lack of political support for business enterprise forced Foxconn, the largest contract manufacturer for Apple, to locate its iPhone and iPad production in Brazil, cutting off the prospect of 80,000 direct jobs in the suburb of Chennai.“The 2007 launch Apple's iPhone was a global hit. Foxconn was the contract manufacturer for Apple iPhone. In 2010-11 Foxconn did a preliminary study to make iPhones in India,“ sources said.
The end of the road for Foxconn is not a surprise to many . “In India, Foxconn's fortunes were directly linked to that of Nokia's. When Nokia started losing its market, orders started to drop for Foxconn and when Nokia shut down its Sriperumbudur plant, Foxconn didn't have much of a choice,“ sources said. The decision to suspend production comes as a huge blow for electronics manufacturing services in the Sriperumbudur region.
Billionaire Terry Gou promoted Foxconn, which ended last year with $127 billion in revenues, is the world's largest electronics contract manufacturer and a key supplier to Apple, HP and Sony.
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