The following is my latest post on Digital East Asia.
Back in March we reported on the series of deaths at major OEMFoxconn (PINK: FXCNY). Well, the deaths just keep coming. On May 6 at 4:30am, Lu Xin, who joined Foxconn in August 2009, jumped from the 6th floor of the VIP hotel in Foxconn’s Long Hua site.
Chinese media are reporting (link in Chinese) that Mr. Lu had been exhibiting abnormal behavior prior to his death. On April 30th he had told his friend, Mr. Zeng Hongling that he was being followed and there were people trying to kill him. Mr. Zeng reported the situation to his supervisor; the supervisor asked Mr. Zeng and another close friend of Mr. Lu to accompany Mr. Lu. In the following days, Mr. Lu had stated he wanted to go back home to Hunan province, but when his friends offered to buy him a train ticket he changed his mind.
At the suggestion of a counsel, Foxconn contacted Mr. Lu’s parents and asked them to travel to Shenzhen to visit him. However, due to the May 1st National holiday, his parents could only get tickets for May 5. They were scheduled to arrive in Shenzhen at 9am on the 6th.
Mr. Lu knew his parents were coming. Foxconn arranged to have him and his two friends stay at the hotel. They went to sleep at around 1:30am. At around 4:30am, Mr. Lu got up and claimedthat the room was too stuffy and wanted fresh air. He got onto the balcony and jumped. His two friends had tried to stop him but failed. Mr. Lu was immediately taken to a hospital, but died around noon on May 6.
This marks the 5th death at Foxconn this year, and the 7th serious incident this year (death or severe injury). The incidents have received widespread coverage in Chinese media, but due to Foxconn’s secretive nature there has been little real insight into the cause of these incidents. What is widely believed among Chinese netizens though, is that Foxconn has very low margins on its products, and is squeezing profits out of their employees by giving them minimal pay under harsh working conditions.
I believe this is a serious labor scandal waiting to blow up in the face of Apple Inc.(NASDAQ: AAPL), Sony Corporation ((ADR) NYSE: SNE), Hewlett-Packard Company (NYSE: HPQ), Amazon.com, Inc. (NASDAQ: AMZN), Nokia Corporation ((ADR) NYSE: NOK), Motorola, Inc. (NYSE: MOT), Nintendo Co., Ltd ((ADR) OTC: NTDOY), Microsoft Corporation (NASDAQ: MSFT), Dell Inc. (NASDAQ: DELL) Cisco Systems Inc. (NASDAQ: CSCO) and any other brands that Foxconn manufactures for. These series of deaths have not been covered by western media to date, but it’s hard to believe that a story this big won’t eventually find its way on to the New York Times and other media outlets. That’s why I believe these companies should act immediately and look into the labor practices at Foxconn, otherwise they may be facing a potentially huge consumer backlash soon.