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Suicide-stricken Chinese iPhone-maker replacing 1 million employees with robots

Chinese media agency Xinhua reports that Foxconn, China's largest private-sector employer, is angling to replace more than 80 percent of its workforce over the next three years with robots.

The announcement comes a year after a string of employee suicides drew attention to poor working conditions at the company, which produces gadgets for Apple, Nokia, and Motorola, among others. At the time, management responded with a hodgepodge of measures, some to actually appease its workers (granting them pay raises and access to counselors), and some to just get them to, you know, stop killing themselves (forcing them to sign a pledge not to commit suicide and installing suicide nets on buildings to catch those who jump). But a report released this May by a Hong Kong-based labor watchdog suggests that working conditions remain worrisome.

Employee discontent aside, Foxconn's announcement appears more a response to the changing environment for Chinese manufacturers who look to produce cheap goods for export. Rising wages have made this model increasingly less sustainable. Foxconn reported a net loss of $218.3 million last year and has seen revenues decline 8 percent since 2009.

The company's location exacerbates its financial predicament. Half of its workforce operates out of its factories in the affluent region surrounding the southeastern Chinese city of Shenzhen, whose liberal business environment made it a major hub for Chinese manufacturing during the 1980s and 1990s. But the same success that first brought companies like Foxconn to Shenzhen has driven up wages and forced many manufacturers to relocate inland, closer to the homes of the migrant workers who make up the bulk of China's low-wage workforce.

Even moves inland can only work for so long. Chinese finance magazine Caixin says that, in the wake of the Foxconn suicides, almost every provincial government has legislated minimum wage increases over the last year. In the first quarter of 2011 alone, says Caixin, hikes in 13 provinces averaged more than 20 percent. Meanwhile, a May 5 report from Boston Consulting Group predicts that net labor costs in China and the United States will converge sometime around 2015.

If this is the end of the line for one million humans at Foxconn, the company probably could have done a better job breaking the news to its employees. The Xinhua report says that company chairman Terry Gou announced the measure last night at a workers' dance party. I'll bet the party petered out pretty soon after that.

STR/AFP/Getty Images

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Sweating to the oldies with Hugo Chávez

A tracksuit-clad Hugo Chávez is seen doing leg lifts, neck rolls, and some other mild exercises in a video recently released by the Venezuelan government. "Healthy government, healthy body, healthy mind," Chávez says between routines. Other members of his cabinet appear in the workout video as well, though from the snippet we've seen no one really seems to be working up much of a sweat. At one point, the group walks slowly around a circle at a snail's pace, following Chávez. P90X, this is not (in fact, it doesn’t even look as vigorous as Jane Fonda's routine), though, given Chávez's cancer fight, the 57-year-old Venezuelan leader probably needs to take things slowly.

 


Chávez stars in exercise video (by Reuters)

 

Chávez, who celebrated his birthday on July 28, said he completed his first round of chemotherapy last month and will soon begin a second round. He is undergoing cancer treatment in Cuba, where he had a tumor removed on June 20 -- though he has yet to say what kind of cancer he has.

In televised remarks last week, Chávez said: "I'm in the best mood possible.… My mood is unbeatable." Chávez has said he plans on running again for president in 2012. His approval remains at about 50 percent, according to a recent opinion poll -- meaning there has been little negative reaction so far to his cancer. Analysts had said his initially cagey explanations for what he was doing in Cuba were because he feared looking weak and sick -- which may be one reason for the recent exercise video. Chávez also said he had lost 30 pounds recently.

"I was too fat. I'm doing exercise, rehabilitation," he said.