Foxconn's Czech Universe
In China, the world's largest contract electronics maker, Taiwan's Foxconn, has long been synonymous with worker exploitation and the heartlessness of low-wage manufacturing. In the Czech Republic, the company presents another face – which may reveal just how much national contexts make a difference.
Working on the morning shift has Oleksii Parilov out of bed at the crack of dawn. He wakes at 5 AM in his modestly sized but fully-equipped single apartment, transformed from an old winery. Just outside his front door is a stream overgrown with weeds and grasses. He fondly refers to this as “the big river.” The factory where Parilov works is closer in toward downtown Kutna Nora, a historic city east of the Prague.
The walk takes 10 minutes, ascending across a slope thick with flowers and fruit trees. It is mid-June, and cherries, though not yet ripened, hang in promising bunches. At the top of the ascent, past yards full of blooming roses, there is a broad highway, and the view suddenly opens. To the right is a seemingly endless field of waist-high grass shifting in the breeze. Just beyond is a small hill, and on the left is Parlov’s destination – a large factory complex in simply blue and white. The logo over the top reads: FOXCONN.
In China Foxconn, or Hon Hai Precision Industry, the Taiwanese tech company that produces everything from the iPhones to the Amazon Echo, is both iconic and infamous, at once the country's largest employer and a company synonymous with labor rights related scandals.
Foxconn has been operating production facilities in the Czech Republic since August 2000. In the city of Pardubice, the site of one of these factories, the company has undergone a long (and sometimes painful) process of adjustment to the local culture and regulations, including more active labor unions.
In contrast to the workforce in China, which is mostly homogenous and comprises migrant workers from the countryside, the Foxconn workforce in the Czech Republic is multinational, with workers and managers coming from 29 countries.
A native of Ukraine, Parilov, 27, is a technical worker at the Taiwanese manufacturer’s Kutna Hora factory. His shifts are arranged on a four-day basis, four work days followed by four rest days. He works on either the morning shift, which runs from 6 AM to 6 PM, or the evening shift, which runs from 6 PM to 6 AM.
Foxconn, So What?
I meet up with Parilov again at 7 PM, after he has completed his 12-hour morning shift. He presses his fingers against his forehead -- heavy and tired, he says, from spending the whole day testing electronic components. Gathering himself, he asks a question that's been on his mind: Why is a journalist for a Chinese publication interested in Foxconn?
As many Chinese know, Foxconn's status in China is both iconic and infamous. Formally known as Hon Hai Precision Industry, the Taiwanese electronics contract manufacturer produces electronics products for such recognizable brands as Apple, Kindle, Nintendo, Sony and Nokia. The company, though headquartered in Taipei, expanded rapidly in mainland China after opening its first manufacturing plant in Shenzhen in 1988.
Foxconn is today the country's largest employer and one of the largest IT companies worldwide. The company can be said to epitomize the close relationship between Taiwanese companies and China's rapid development in manufacturing. By 2019, Taiwanese tech companies alone employed an estimated 10 million people in China. Foxconn in turn has benefitted hugely from government subsidies and tax breaks from local governments.
But since 2010, the company has been harried by controversies over its treatment of workers in its Chinese manufacturing bases. In 2010, the company was struck by a wave of worker suicides, bringing tough conditions at its facilities into sharp focus in China and worldwide. Instances of excessive work hours and underpayment of wages were exposed in 2012, resulting in pledges from the company to improve conditions. Nevertheless, in 2018, Foxconn was again criticized in a report by the New York-based NGO China Labor Watch for such practices as failing to time and a half for overtime work (as required by Chinese law), and failing to pay for sick leave or holiday pay.
The Foxconn facility at Kutna Hora seems worlds away from the image of Foxconn factories in China, where labor conditions continue to fall short, where management is said to apply military-style discipline, and where workers are huddled into factory dormitories.
By contrast, Kutna Hora pastoral and graceful. Find a vantage point about the old town and you are treated to sweeping views of vineyards and old villas (the area is known for its wine production), cobbled streets and church spires. From any angle, this seems a classic European scene. The city is historic too, dating back to at least the 12th century. The site of a major silver mine In the 15th century, Kutna Hora was once richer than the nearby capital city of Prague, and this rich history is still visible today in the lavish architecture of the old city, with several cathedrals on the World Heritage List.
Kutna Hora is not at all what Chinese would generally expect when hearing the name "Foxconn." This, I explain to Parilov, is what interests a Chinese journalist. What is Foxconn like in the parallel universe of the Czech Republic? Are things different here?
- July 2009
- Sun Danyong, a 25 year-old male Foxconn worker commits suicide by jumping from his dormitory building after allegedly being abused by security guards at the Shenzhen factory for losing a prototype iPhone.
- At least 14 Foxconn employees are known to have taken their lives by jumping from buildings in the manufacturing complex.
- May 2011
- Foxconn places safety nets around the outside of its factory buildings in Shenzhen to prevent deaths from suicide jumps. The company engages the global public relations firm Burson-Marsteller to deal with its negative publicity. At least 4 suicide deaths are recorded for the year.
- January 2012
- As manufacturing facilities move to inland China to take advantage of lower costs, problems crop up at Foxconn factories in the city of Wuhan. Workers in Wuhan stage protests against poor working conditions.
- Three Foxconn employees, all in their early 20s, are reported to have committed suicide during this period. Reports accuse Foxconn of underpaying wages and having employees work excessive hours.
- January 2017
- Li Ming, 31, a Foxconn employee in the city of Zhengzhou, in Henan province, jumps to his death from a building.
- June 2018
- New York-based labor advocacy group China Labor Watch and the UK's Observer newspaper claim that a Foxconn factory in Hengyang, China, has systematically violated Chinese labor laws. Their investigation found that 40 percent of workers at the facility were agency workers denied sick pay or holiday pay, while the legal limit since 2014 had been 10 percent of the workforce.
"This is by far the best factory I've worked in since I started working," says Parilov as he stands just outside the entrance to the factory.
At his previous jobs, he says, he had to deal with busy construction sites, or work with toxic materials – as in his previous job at a dye plant. By comparison, his technician job at Foxconn is comfortable. And his life off work in Kutna Hora is calm and stress-free. In his leisure time, he enjoys reading, watch movies or playing video games. Sometimes he uses his four-day stint off work to fly off to other European cities like Barcelona or Amsterdam. Barcelona, he says, is one of his favorite places, he says. A few months ago, Parilov had a month-long holiday, which allowed him to return home to Ukraine and visit his family.
For Parilov, the thought of poor conditions at Foxconn facilities in China is a concern so distant it hardly registers. “If you hadn't mentioned it, I wouldn’t even think about this issue -- whether the factory comes from China or Taiwan," he says. "Europe is not China. Even a factory in Ukraine would not be managed in the way Foxconn does in China.”
But conditions weren't always so rosy for Foxconn employees in the Czech Republic. Twenty years ago, when Foxconn first arrived in the Czech Republic, the differences between Foxconn and other factories was clear.
In May 2000, Foxconn bought a factory in the mid-sized city of Pardubice that had been owned by Tesla, a large state-owned conglomerate dating back to the former Czechoslovakia – not to be confused with the US-based electric car maker.
Production began at the factory in August 2000, and many former Tesla workers were hired by Foxconn, a decision welcomed by the local government. But the wages at Foxconn were lower than they had been in Tesla’s heyday, and the work on the assembly line was intensive and monotonous. Foxconn soon found it difficult to retain Czech workers, a problem aggravated by Foxconn's management style, imported from its Chinese factories.
Foxconn initially hired 200 Czech workers at the Pardubice facility. But in September 2000, within just weeks of the start of production tensions boiled over and protests began. In September 2000, the Czech daily newspaper Právo ran a story with the headline, "Taiwanese Shock Czech Workers.” The story quoted one assembly line worker as saying: "No matter who leaves the assembly line, to go to the toilet or whatever, it has to be reported to the director. When they come back, they can't go straight back to their place, but instead have to wait until the next worker requests a bathroom break, so that they can take their place on the assembly line. If you're caught waiting to get back to work, your salary goes down."
The article also included a colourful detail from a company driver for Foxconn that revealed the gap in management cultures: “I have been a company driver for 25 years, but now I have to get used to opening the door for the boss every time we reach a destination. My previous bosses, even the ones three times as old as this one, never made requests like that.”
Looking back, Foxconn gained a lot of convenience in buying Tesla, but there is one “inconvenience”: while it inherited Tesla’s factories and workers, it also inherited Tesla’s work union.
Pardubice is a place of austerity, without the delicacy and prosperity of Prague. Foxconn’s factory is not far away from the city center, and people are still used to calling the section “Tesla.” The work union is located near a parking lot outside the factory, with a Tesla board: Pardubice Tesla Grass-root Work Union.
The union’s chairman is Tomáš Formánek. He is also the only full-time member of the trade union; He started to work at Foxconn’s production line since 2003, and joined the trade union in 2006. Becoming the chairman in 2009, Formánek is familiar with Foxconn’s changes in Czech throughout the years.
“At first, the trade union was in a difficult spot,” Formánek recalls.
In a 2016 report detailing the process of Foxconn’s introduction into the labor environment in the Czech Republic, Marek Čaněk, director of the non-profit organisation Multicultural Center Prague (MKC), wrote that Foxconn had in the beginning refused to communicate at all with the trade union.
In September 2000, not long after production began, the workers issued two formal complaints touching on a range of problems, according to a report by Czech newspaper Lidové noviny. They reported that there was no drinking water available in the workplace, that they were not properly compensated for overtime, and that work conditions were unsafe and unsanitary.
The first of these complaints, delivered to the Ministry of Labor and Social Affairs and the mayor’s office in Pardubice, was signed by around 100 workers, half of the workforce at the Foxconn facility at the time. The chairman of the workers’ union voiced his concern to local media – saying that the working conditions at Foxconn’s Czech factory risked becoming “similar to those in China.”
At that time, the chairman of the workers union voiced his deepest concern to local media -- that the working conditions at Foxconn’s Czech factory might “become similar to those in China.”
These worst fears have not come to pass.
Following the complaints, the city government in Pardubice called for a process of arbitration. Facing this outside pressure, Foxconn acknowledged the workers’ union and recognized a new process of collective bargaining. As a result, the highly intensive assembly line work at the facility was challenged, and Foxconn’s plans to establish a dormitory system like that used in China were stopped in their tracks.
Foxconn had planned to build a dormitory near the factory in 2001, accommodating 1,800 workers. Opposed by residents in Pardubice, the plan was finally abandoned.
Foxconn, meanwhile, also worked to change the management culture and structure at the Pardubice facility. Rutvica Andrijasevic, senior lecturer at the University of Bristol, and Devi Sacchetto, a professor of sociology at Italy’s University of Padua, have studied the Foxconn factory in the Czech Republic consistently since 2012. They told Initium that from 2000 to 2004, managers from the Czech Republic and Scotland began replacing middle-level and senior-level management from mainland China and Taiwan.
Foxconn sent Czech management trainees for three-month training stints at the Longhua factory in Shenzhen, one of the company’s main global facilities. The trainees would then return to Pardubice to work as middle-level managers. Scottish managers, meanwhile, were brought over from the production facility of Compaq Computer Corporation in Erskine, Scotland, following Compaq’s buyout by Hewlett Packard (HP) in 2002 – HP being Foxconn’s chief client in the Czech Republic.
Under the new management structure, says Formánek, the work union has been preserved, but the company remains suspicious of its role. “Foxconn does not wholeheartedly support the work union,” Formánek says. “The existence of the work union is beneficial to the factory, but their hope is that the union remains weak.”
Maintaining the union was the result not just of public pressure. According to Czech law, on an annual basis employers must either speak one-on-one with each employee, or have dialogue with the work union. Speaking with union representatives, says Formánek, is a far more efficient way to engage from the company’s perspective. Foxconn clients may also demand unions be present in factories producing their equipment.
At their peak, Foxconn’s two factories in the Czech Republic employed nearly 10,000 workers. That number has fallen to 5,500. Of these, less than 10 percent, around 350 employees, are union members. Low membership is partly a result of union fees, which require members to contribute 1 percent of their monthly salaries to the union. But another reason, Formánek says, is that workers are sometimes cautioned by company managers that joining the union could reflect poorly on them.
Formánek emphasizes that the union’s existence is most important, regardless of the rate of participation. In 2017, he says, the union was able to secure additional benefits for Foxconn workers after five years of negotiations. They are now entitled to five weeks of paid holiday time instead of the previous four weeks.
When the union made its initial request to Foxconn, and this was transmitted to the Asian headquarters, the response was shock. “ In Czech factories, five weeks of holiday is normal for workers,” Formánek says, his face cracking into a smile. “They said that workers in China only received two weeks of holiday, and that many would only request one week. Why would you need a fifth week of holiday, they asked us, if you already have four?”
“We just said, look, we are in Europe,” he says, “We just want five weeks of holiday.”
An International Factory Floor
But Formánek says the most noticeable change at Foxconn in the Czech Republic in recent years has been the makeup of the workforce. Gradually, Czech workers, seen by the company as being more difficult to deal with, have been passed over as the main source of labor for Foxconn.
Around 2006, the company started hiring workers from Mongolia for the Pardubice factory. They included the parents of 19-year-old Anujin, a high school student in Pardubice who now does work in the evenings as a translator and interpreter from Mongolian to Czech. In 2010, when she was just 10 years old, Anujin flew on her own from Ulaanbaatar, the Mongolian capital, to the Czech Republic. In Pardubice she was reunited with her parents, who by that point had already worked at the Foxconn factory in the town for almost four years.
After several months of Czech language classes, Anujin entered a local school. “At that time, there were already several Mongolian kids in my class,” Anujin says. “But they couldn’t even speak Mongolian, because they had moved to the Czech Republic when they were much younger.”
Anujin’s fluency in both Mongolian and Czech eventually put her in the rare position of being one of the only Mongolian translators in town. After school on Mondays and Wednesdays, she now spends 1.5 hours at the municipal immigration office assisting with interpreting and translation. After class on Tuesdays and Thursdays, she helps out with translation at Most Pro, a local non-profit organization that offers language courses and counseling for foreigners.
“Most” in Czech means “bridge,” and the goal of Most Pro is to build a bridge for foreigners in the Czech Republic, helping them integrate with Czech society. Established in 2006, over 90 percent of the organization’s clients today are from Mongolia, and most of them work at the Foxconn facility. Currently, there are around 900 Mongolian workers at Foxconn, according to Most Pro.
Currently, there are around 900 Mongolian workers at Foxconn, according to Most Pro.
“Foxconn is fond of Mongolian workers,” says Katerina Kotrla, the director of Most Pro. “They are hardworking, and can work nonstop for 12-hour shifts. Working with such intensity for the salaries they offer isn’t attractive enough for Czech workers.”
In 2016, the average monthly salary on Foxconn’s assembly lines in the Czech Republic, amounting to 19,217 Czech Koruna, or around 750 Euro, was below the average salary for workers in the Czech Republic’s electronics industry, which stood at 23,409 Czech Koruna (920 Euro).
Mongolian workers are just one part of Foxconn’s efforts to diversify its labor pool in the Czech Republic.
As it became clear that the intensive nature of Foxconn’s assembly line work made it unattractive to local Czech workers, Foxconn looked farther afield, recruiting workers not just from Mongolia but from Slovakia and Vietnam. Up until 2008, North Korea had also been a source of guest workers in the Czech Republic, what one scholar called an “invisible minority,” but this practice was highly controversial, given the extreme restrictions placed on these laborers, and the control of their income by North Korean authorities, and the practice was ended in 2008.
The flow of labor was further facilitated by the Czech Republic’s accession to the European Union in 2004, which opened up its labor market with the establishment of temporary work agencies, or TWAs. These agencies attracted workers from Poland, Romania and Bulgaria, who could then be used at the Foxconn plants without the need for Foxconn to hire them on temporary contracts.
According to Formánek, data from Foxconn’s human resource department shows that workers in the two Foxconn facilities in the Czech Republic come from 29 countries.
Foxconn’s Czech factories are truly transnational spaces. The official languages are Czech and English. Employees are divided into “core workers,” those hired directly hired by Foxconn, and “temporary workers,” those hired through agencies.
Scholars Rutvica Andrijasevic and Devi Sacchetto observed in their research of Foxconn that the factories have multiple layers. Foxconn management comprises mostly men from the Czech Republic, Scotland and China, from 40 to 50 years old. They are transnational elites with English fluency. Meanwhile, those working in administration and human resources are generally from the Czech Republic (though a small number are foreign workers), have high school or college degrees, and are from 30 to 50 years old. They are English-speaking and on permanent contracts.
On the assembly line, most supervisors are Czech and Slovakian and range in age from 30 and 40. Most have technical backgrounds and they are predominantly male, with families living in the Czech Republic. In some cases, these positions can also be held by workers from other EU countries, either through permanent contracts with Foxconn or hired by TWAs for supervisory roles.
The vast majority of assembly line workers come from Slovakia, Poland, Romania, and Bulgaria, and are hired by TWAs. They tend to be younger, between the ages of 20 and 35, and are mostly unmarried. Assembly line workers from non-EU countries such as Vietnam, Mongolia, and Ukraine are generally hired by Foxconn directly. In many cases, they have specific skill sets and training, and are used for repairs or other technical jobs.
Oleksii Parilov, the young worker from Ukraine, is one in this last group.
The vast majority of assembly line workers come from Slovakia, Poland, Romania, and Bulgaria, and are hired by TWAs.
New Labor Structures, New Inequalities
Three years ago, Parilov graduated from university in the Ukrainian capital Kiev. Not long after, he decided to leave the Ukraine and seek work in the Czech Republic. He found his present job through a distant relative who also works at Foxconn. Parilov’s mother still lives in southern Ukraine. Although he often complains, he says, that Kutna Hora is too small and provincial, he values his job and hasn’t considered a change. .
Life in the Czech Republic is mostly without difficulty, Parilov says. He spends roughly half of his salary on daily expenses such as rent and food, and is able to save the rest. He gets extra pay if he works on a holiday, but he can also choose not to work. His English is sufficient, and learning Czech, he says, has not been a problem, given its similarity to Ukrainian. When it comes to dealing with work visas and other such matters, there are organizations that can help sort things out.
The same can hardly be said for workers from Mongolia, who find it a constant challenge to communicate and understand Czech society. The interpreting services of high school student Anujin are in constant need because most Mongolian workers are unable to communicate. Kotrla, the director of Most Pro, says that plenty of Mongolian workers are still unable to speak Czech even more than a decade after arriving here.
“This is the case,” says Kotrla, “partly because life at the factory is simple and doesn’t require integration.”