Foxconn Terry Gou counterattacks! What is your intention to announce the cancellation of all overtime after clarifying the rumors?

Foxconn was previously exposed to investigation by two major departments. Firstly, the tax department conducted tax inspections on its enterprises in Guangdong and Jiangsu; Secondly, the Ministry of Natural Resources conducted on-site investigations on Foxconn's land use in Henan, Hubei, and other areas

Foxconn was previously exposed to investigation by two major departments. Firstly, the tax department conducted tax inspections on its enterprises in Guangdong and Jiangsu; Secondly, the Ministry of Natural Resources conducted on-site investigations on Foxconn's land use in Henan, Hubei, and other areas.

Afterwards, there were rumors in the market that the investigation and punishment results had been released, and Foxconn was required to pay up to 180 billion yuan in taxes. About 20000 land the size of a football field would be confiscated.

However, Foxconn subsequently refuted the rumor and responded positively,Not only does it deny the issue of paying 180 billion yuan in taxes and land confiscation, but it also states thatWe will actively cooperate with relevant departments to carry out regulatory work in the future.

Does this mean Foxconn will obediently comply? I'm afraid not. Gou Taiming, who is busy campaigning on the island, has never been a good stubbornness. He is known for his sophistication in both business and politics. He may have already figured out a coping strategy and played his first card.

Recently, it has been rumored that Foxconn will cancel all overtime work in mainland factories and fully implement a 5-day 8-hour working system. This move seems to comply with the provisions of China's Labor Law, but it actually leaves the problem to society and also contributes significantly to saving additional expenses caused by layoffs. To clarify the underlying logic, one must first understand why Foxconn is popular among domestic workers.

To be honest, working at Foxconn may be dull and boring, but it does earn money, especially for young people who lack much education and cannot find good jobs. HoweverThis money is actually earned through extra labor, but it's not that Gou Taiming is kind enough to take money out of his own pockets to subsidize workers,Otherwise, Foxconn would not have become the world's largest manufacturing company in just a few decades and become one of the Fortune 500 companies year after year.

According to the relevant laws and regulations of the Labor Law of China, enterprises need to pay overtime pay for arranging employees to work overtime. The calculation method is to calculate 1.5 times the working hours on time for overtime exceeding 8 hours on weekdays, 2 times the working hours on weekends, and 3 times the working hours on statutory holidays.

Assuming a worker works overtime for one day every Saturday, calculated as 10 hours, it is 20 working hours. On working days, they work overtime for 2 hours (3 working hours) per day, totaling 15 working hours for five working days. As a result, the weekly overtime hours become 35 working hours.The normal working hours of a week are 40 working hours, which means that workers receive almost twice the base salary per week. If they encounter holidays or peak seasons, they can receive 2.5 or even 3 times the base salary.

High salary is the most important reason why workers are willing to work for Foxconn, and "high salary" is based on long-term overtime. Once overtime income is completely eliminated, it will be greatly discounted. Going to the factory to work is to earn more money, and workers would rather work overtime than have no work, resulting in a sharp decrease in income.

As Apple shifted some of its production capacity to India, Foxconn, as Apple's main contractor, naturally followed Apple's footsteps in investing in and building factories in India and other places. Domestic production capacity decreased, resulting in fewer jobs and the need for workers to work overtime frequently, or even fewer workers.

At this time and in this context, Foxconn's announcement of a 5-day and 8-hour work schedule is clearly a sign of drunkenness, seemingly complying with the Labor Law, but actually reducing the wages of 100000 workers nationwide. In addition,Workers who voluntarily resign due to a sharp decrease in income do not need to pay termination compensation,Guo Taiming's move is indeed powerful.

Some people are still defending Foxconn and insisting on promoting the domestic legal process. I can't help but ask why Foxconn never raised the 5-day 8-hour working schedule when orders were full before, but instead raised it at a critical moment after some production capacity was transferred? There are not so many coincidences in the world, only careful planning for profit.

In addition to bypassing regulations and reducing layoff costs, Foxconn's move may have deeper implications.

As mentioned earlier, Foxconn is currently being investigated by two major departments in China. Once tax or land issues are identified, Foxconn will suffer significant losses, ranging from paying taxes, late fees, and reclaiming land. In severe cases, relevant personnel will face administrative or even criminal penalties.

Some speculate that the announcement of a 5-day 8-hour working week or the pressure exerted by Gou Taiming on the mainland, using a large number of factory workers to lose their jobs, may force regulatory authorities to open the door for them.

Such speculation has a trail to follow. Guo Taiming has repeatedly made arrogant remarks, such as "China's economy cannot do without Foxconn", "giving food to the mainland", and "using 80000 robots to confront the People's Liberation Army".

Unfortunately, Foxconn and Terry Gou may have miscalculated. We are no longer what China used to be. Except for a few areas where short-term economic and employment impacts may occur, China's overall economy is not dependent on Foxconn.

In the field of OEM, there are already many well-known enterprises in China, such as BYD, that can absorb the market after Foxconn leaves and provide job opportunities for the workforce. It is Foxconn's "gold medalist" Apple that cannot do without the Chinese market. According to Apple's 2023 third quarter financial report, sales in the Greater China region for July September this year were $15 billion, lower than the market's expected $17.01 billion. Once the financial report was released, Apple's stock price plummeted.

The Chinese market is extremely important to Apple, and Apple is the main source of revenue for Foxconn. Who do you think is indispensable?

Foxconn's ability to become a world-renowned enterprise is not only related to Gou Taiming's personal business ability, but also to the many preferential policies provided by China, including land, taxation, and employment, which are inseparable. It can even be considered the key to Foxconn's success.

A suggestion for Mr. Guo Taiming is not to use crooked ways to resist regulation, take on the responsibility of well-known entrepreneurs, and promptly rectify any problems. China has always provided the most favorable treatment to friendly Taiwanese enterprises, and the policy of favoring Taiwan will not change from outside. On the contrary, the behavior of eating, smashing the pot, and pleasing both sides will not only be despised but also severely punished.

The above is purely my personal opinion. Welcome to follow and like @ Wang Wu. Your support is the best encouragement for originality!

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