Daily Lessons from Life 10 June 2010 - Foxconn stops payments to suicide workers' families

"Foxconn stops payments to suicide workers' families -Thu, Jun 10, 2010 AFP

TAIPEI, TAIWAN (AFP) - Taiwan's IT giant Foxconn said Thursday it has stopped offering condolence payments to the families of staff members who kill themselves as it tries to stem a spate of factory suicides in China.

The decision is part of a series of initiatives including raising wages, offering consoling services and installing safety nets, an official said.

Some observers had said that the workers who committed suicide could have been motivated by the payment to their families! While the company founder, Terry Gou, said that the Chinese authorities had cleared the company from any ill-treatment or sweat-shop-like working condition that supposedly contributed to these extreme behaviors by the workers!"

Foxconn is the biggest and meanest Electronics Manufacturing Services (EMS) company in the world. It has unrivalled scale and efficiency and effectiveness in the business. No one comes close to their standard of production, the highest (though still razor-thin margin vs. their principals like Apple!). Yet, it is a case of 'You can be efficient with Things but You MUST be EFFECTIVE with people'!

Lessons for me are:

1. in a purely commercial world and a cut-throat industry, there appeared to be not much room for 'people-oriented' management leadership! I don't agreed though I know it is very difficult to be people-0oriented and YET be able to show short term return when the investors are not interested in the long gestation period that may be necessary for the philosophy to show up in the financial performance of the company!;

2. the old or existing economic growth model really is broken in my opinion. The many EMS companies fought each others hard, very hard, to earn the business of their principals and YET most of them were barely surviving on razor-thin margin, with some bleeding red ink! It is like somehow someone believes that it is alright to take losses as long as you get some business going! Irrational or the force of the market?;

3. statistically speaking, the 11 or 12 suicide deaths is very low considering the Foxconn plant in Shenzhen has anything between 200-500k workers! I can appreciate the need to run the factories in a very disciplined way though I hope, like Mr. Gou said, there is no need to resort to ill-treatment and other tactics. With the increase of 120% in the wages of the workers, perhaps the economic incentive will help those mentally disturbed to cope better. Maybe for a while! Maybe doing away the Compensation for Death payment will also reduce the tendencies to take one's own life for the 'benefit' of the family!

Build more and cheaper and better and faster. It just scary!! It is not natural! May we all get by!!