Hon Hai Downplays Wage Increases

Amid rising concerns about profitability and a tumbling stock price, Hon Hai Precision Industry Co. Chairman Terry Gou downplayed Tuesday the impact of recent wage increases and said it is accelerating automation to reduce its reliance on labor.

Separately, the chairman of its Foxconn International Holdings Ltd. handset manufacturing unit, which assembles handsets for Motorola Inc. (MOT) and Nokia Corp. (NOK), told shareholders in Hong Kong Tuesday it plans to conclude price negotiations for its products with clients in the third quarter to mitigate the impact from recent wage increases, suggesting price increases may be in store.

The wage-increase phenomenon “is negative to [Hon Hai’s profit margin] in the short term, but we believe it is positive in the long term,” Mr. Gou said Tuesday at the company’s annual shareholders meeting.

Hon Hai, which employs some 800,000 workers in China, is now accelerating automation to reduce its reliance on labor.

“In the long term, the number of our employee might decrease,” he said, declining to be specific about how the company might want to adjust its work force.

Read the rest of this post on the original site

Must-Reads from other Websites

Panos Mourdoukoutas

Why Apple Should Buy China’s Xiaomi

Paul Graham

What I Didn’t Say

Benjamin Bratton

We Need to Talk About TED

Mat Honan

I, Glasshole: My Year With Google Glass

Chris Ware

All Together Now

Corey S. Powell and Laurie Gwen Shapiro

The Sculpture on the Moon

About Voices

Along with original content and posts from across the Dow Jones network, this section of AllThingsD includes Must-Reads From Other Websites — pieces we’ve read, discussions we’ve followed, stuff we like. Six posts from external sites are included here each weekday, but we only run the headlines. We link to the original sites for the rest. These posts are explicitly labeled, so it’s clear that the content comes from other websites, and for clarity’s sake, all outside posts run against a pink background.

We also solicit original full-length posts and accept some unsolicited submissions.

Read more »