Chinese circuit board maker boosts wages in response to Apple's concerns
Apple's push to increase employee compensation and safety in its supply chain continues to have an effect in the Far East, where another key supplier has boosted pay and reduced overtime for its workers.
TTM Technologies, which is a supplier of printed circuit boards for devices like Apple's iPhone and iPad, recently boosted its employees' pay in China, according to analyst Brian White with Topeka Capital Markets. He said the decision was partly made because Apple, which he characterized as an "important customer" for TTM, has "clearly been concerned about labor issues in China."
The company has announced that it is raising its production wages in China to improve retention of employees. The increased wages are intended to offset a reduction in opportunities to work overtime.
Because of "global customer mandates" on employee overtime from companies like Apple, TTM's gross margin is expected to be negatively impacted. The company recently reported March quarter sales of $300.5 million, which was below investor expectations of $321 million.
Decreased overtime hours have become a concern for some workers in China, who depend on the extra hours for their income. In March, one report cited a number of employees at Foxconn who were worried that their hours would be cut following an audit of the company's facilities.
Foxconn announced in March that, like TTM, it would reduce employee working hours. Foxconn workers are now restricted to 49 hours per week, including overtime.
The changes at Foxconn were made in response to violations found by the Fair Labor Association, which audited Foxconn's facilities at Apple's request. The FLA discovered excess working times and various code violations in an audit of three Foxconn factories.
As one of Apple's largest overseas suppliers, Foxconn has taken the brunt of criticism directed toward working conditions in China's technology supply chain. But changes in wages and overtime at TTM Technologies show that the results of Apple's crackdown have already had a ripple effect beyond just Foxconn.
TTM Technologies, which is a supplier of printed circuit boards for devices like Apple's iPhone and iPad, recently boosted its employees' pay in China, according to analyst Brian White with Topeka Capital Markets. He said the decision was partly made because Apple, which he characterized as an "important customer" for TTM, has "clearly been concerned about labor issues in China."
The company has announced that it is raising its production wages in China to improve retention of employees. The increased wages are intended to offset a reduction in opportunities to work overtime.
Because of "global customer mandates" on employee overtime from companies like Apple, TTM's gross margin is expected to be negatively impacted. The company recently reported March quarter sales of $300.5 million, which was below investor expectations of $321 million.
Decreased overtime hours have become a concern for some workers in China, who depend on the extra hours for their income. In March, one report cited a number of employees at Foxconn who were worried that their hours would be cut following an audit of the company's facilities.
Foxconn announced in March that, like TTM, it would reduce employee working hours. Foxconn workers are now restricted to 49 hours per week, including overtime.
The changes at Foxconn were made in response to violations found by the Fair Labor Association, which audited Foxconn's facilities at Apple's request. The FLA discovered excess working times and various code violations in an audit of three Foxconn factories.
As one of Apple's largest overseas suppliers, Foxconn has taken the brunt of criticism directed toward working conditions in China's technology supply chain. But changes in wages and overtime at TTM Technologies show that the results of Apple's crackdown have already had a ripple effect beyond just Foxconn.
Comments
This is good news. Now if we could just get Apple to pay their fair share in taxes...
They pay their fair share based on the current US tax code. Scream at Congress who both spends your money and makes up the rules for taxation along with the many loopholes (and don't think these were oversights) created.
This will eventually have a negative impact on Apple's margins. But the more interesting thing to watch for is how these reduced margins will impact Apple's competition. I think Apple is, in a way, happy to see upwards pricing pressure in the future for what it will do to the competition.
Quote:
Originally Posted by popnfresh
Now if we could just get Apple to pay their fair share in taxes...
*rimshot*
they do (and more) ...quit believing everything you read. You need to research things before you make stupid comments.
No worries, there are plenty of other countries to take over as the low bid for human labor in the world.
Ah, the beauty of international trade: Factor Price Equalization Theorem at work!
Quote:
Originally Posted by popnfresh
This is good news. Now if we could just get Apple to pay their fair share in taxes...
They DO. Based on what the law allows.
Of course, if YOU want to pay more than you actually need to, I'm sure there's an exorbitant service fee out there somewhere that is just PERFECT for suckers.
Quote:
Because of "global customer mandates" on employee overtime from companies like Apple, TTM's gross margin is expected to be negatively impacted. The company recently reported March quarter sales of $300.5 million, which was below investor expectations of $321 million.
These two sentences make no sense in the same paragraph. In the first sentence the writer is writing about gross margin, and in the second they are writing about quarterly sales. Furthermore, future gross margins have no effect on past sales. ????
Finally, if this is one of Apple's manufacturers, how can TTM's sales be off since Apple is selling everything as fast as it can be made?
Any updates on how Samsung, Microsoft and others are faring on these issues?
- crickets -
Quote:
Originally Posted by ernstcs
No worries, there are plenty of other countries to take over as the low bid for human labor in the world.
Nokia's opening their new factory in Vietnam.
Does the US still have an embargo on Vietnam, can US manufacturers set up there?
Quote:
Originally Posted by hill60
Does the US still have an embargo on Vietnam, can US manufacturers set up there?
No, and yes.
Quote:
Originally Posted by popnfresh
This is good news. Now if we could just get Apple to pay their fair share in taxes...
Show some kind of proof that Apple hasn't paid every penny in taxes that they are legally obligated to pay. Until then your remark is totally useless BS.