Foxconn 5 million iphones was apple’s return

due to the labor cost of each mobile phone “heavy” it is as high as 200 yuan, not including other change parts cost, rich taihua extra pay will be at least 1 billion ~ 1.6 billion yuan.

although first-quarter revenues fell 19.21% is not good news, but gou also faces more bad news. Is terry gou, hon hai precision industry co., LTD. (2317. TW, commonly known as “company”) in mainland, chairman and CEO.

“on March 15, 2013, the company back to the 5 million mobile phones, the reason is that the appearance does not conform to standards or is dysfunctional problems.” Foxconn, a person not to be named told China business news reporter, substandard apple mobile phones and even up to 8 million units.

in order to promote “yield”, terry gou, on April 16, 12 PM to mission hills shenzhen hon view science and technology park C03 floor 3 layer inspection. He put forward “improve yield, professional training, agglomerate morale” 12 words, and said he set up office in mission hills, yield can not meet the requirements he won’t go.

according to the iPhone “heavy” (which is produced again, still with the original machine part of the original) of about 200 yuan each, artificial cost accounting, the only 5 million ~ 8 million of unqualified iPhone once again processing, hon hai will need to pay the additional cost in 1 billion ~ 1.6 billion yuan. This means that, in 2012, hon hai is responsible for the generation of labor internal iDPBG (digital products business group) two-thirds of the profits will suffer.

executives “earthquake”

a clock in China have realized the two management problems of iDPBG, defective rate is too high, the product quality control are leaky.

on April 1, China business newspaper scoop foxconn iDPBG original clock in China at the end of 2012, general manager of “leave” for a long time, a successor Zhong Cheng yulin oddly again in the short term has been replaced. On March 27, 2013, Ken Chen has begun at the helm of hon hai, the group attracts the most attention. On April 1, (see “foxconn suspected” systemic crisis “now” C1 version).

according to the people familiar with the clock in China is actually iDPBG general manager, only by foxconn (supplier of executives receive bribes) “bribery, due to the companies to investigate what happened, he needed to avert suspicion. Until at least 2013 in January, the clock in China also attend iDPBG enterprise group of year-end mobilization meeting.

in the mobilization meeting, the clock in accordance with China’s speech spirit is “deep reflection, motivate the future”. “Deep reflection” of this kind of words, that clock in China have realized the two management problems of iDPBG, defective rate is too high, the product quality control are leaky.

the parts of speech published in February 2013, 28 issue of the journal hong bridge. Hong bridge is foxconn technology group’s internal publication. As iDPBG former deputy general manager, clock ChengYu for enterprise group of the major issues in the same difficult to take off the hook. Is in with the apple on the problem of the subsequent processing of 5 million ~ 8 million mobile phones, Zhong Cheng yulin clashed with apple head.

revealed that iDPBG Zhong Cheng yulin staff said: “CY (namely Zhong Cheng yulin, this newspaper) on March 25 to meet customers negotiations, I don’t know why to quarrel with the client. Later, terry gou, call him, but he argue with guo. Then afternoon CY didn’t come… “

is also in this case, gou chose to hon hai’s internal core executive junior and office resumes lack of production management experience Ken Chen head iDPBG.

secondary accident

due to the labor cost of each mobile phone “heavy” it is as high as 200 yuan, not including other change parts cost, rich taihua extra pay will be at least 1 billion ~ 1.6 billion yuan.

although iDPBG is internal cause of child foxconn group, but also a separate legal entity, company registration, rich taihua industrial (shenzhen) co., LTD. (hereinafter referred to as “rich taihua”).

rich taihua founded in April 2002, originally mainly OEM desktop computer, MP3, computer motherboard products, but with the rise of apple, focus on OEM and apple products. Like apple stereo, iMac by DSD department is responsible for, apple notebook computer in shenzhen longhua plant production in the D building area, the iPhone by the rich taihua at mission hills shenzhen park, zhengzhou park, also have taiyuan park D1 ~ D4 building department contract.

due to business needs, foxconn is not with hon hai in taiyuan, but registered at taiyuan industrial co., LTD. (hereinafter referred to as the “at”). Based on this, the rich taihua taiyuan subsidiary to hangs at its name as well.

“it is not really rich taihua encounter bad product for the first time.” , the person said on August 27, 2010, foxconn has for shipments of product yield are not up to the standard of the apple and compensation of 800 million yuan to the latter: “the number is not clear, should be many, specific how many can’t statistics.”

this time, after Zhong Cheng margin “quarrel” and negotiate with apple, apple did not March 15 of “return” for compensation. But due to the labor cost of each mobile phone “heavy” it is as high as 200 yuan, not including other change parts cost, rich taihua will therefore additional spending at least 1 billion ~ 1.6 billion yuan.

so, what is the reason caused by vertical integration, foxconn, famous for its fast mass shipment again after two years for shipments of product yield are not up to the standard of the apple and “heavy”?

in the person’s view, the rich taihua development too fast, management can’t keep up with is the key. In the face of apple products sell like hot cakes, rich taihua also started the “great leap forward”.

around 2010, responsible for the generation of labor in the production of tablet computer iDSBG (innovation digital systems business group) from iDPBG separation. That time, the iPhone, such as the apple products is being global consumers. As the contract at the core of production line, the iDSBG, iDPBG vigorously expanding production line and staff.

“when the promotion is very easy, but the problem is the turnip fast not to wash mud, for these cadres growing up from the production line, production line of rapid expansion of the management level is the” young people “test.” The insider said.

but crucially, before June 2010, foxconn, internal audit and QC (quality control) department, power is great. That time, the audit department as long as found that production line employees do not conform to the operation process and even speak at work, have tremendous power to influence the production line of performance appraisal, finally reflected in income.

it is these a little unkind to the “strict management, lead to foxconn has often been named” sweatshop “. The outbreak of the first half of 2010 a series of employees “fall” event, let the management system has a “hole”.

“audit and QC department power is great, but that was before, now it is different. Since 2010, when employees jumped to his company to bear all kinds of pressure, began to less strict audit work.” The insider said, foxconn’s quality process is not a full inspection, but checking. But in the process of rapidly expanding company, all kinds of management issues emerge in endlessly.

our reporter on a variety of call foxconn. But before the deadline, the other has not yet comment. Another middle and its internal core people confirmed to the reporter, low yield is, indeed, at present the gou headache, “compared with the investment robot, photovoltaic power is’ cloud ‘.”

can be confirmed that after the ching Ming festival, rich taihua shenzhen, zhengzhou, taiyuan three factory full stop line reorganization; And then also sent inquiry into apple. On April 15, rich taihua began in small batch production, the production is very small, each production line 1000 ~ 2000 iphones a day, and only 95% of yield.