Drawing on support from permissive governments, multinational manufacturer Foxconn has set up shop in Central Europe. Yet the transitory nature of the many migrant workers employed in these factories will have serious consequences for the future of labour in Europe.
The best dormitory in town bears the evocative name of Hotel Harmony and houses several hundred migrant workers recruited almost exclusively by Xawax, one of the country’s 1,300 or so recruitment agencies. The Express People agency, on the other hand, puts its workers up in a third-rate bed and breakfast, the Veselka, a stone’s throw from the railway station.
In both dormitories there are four beds in each room, but while the people staying in the Hotel Harmony have a kitchenette and an en-suite bathroom per room, the others have to make do with a run-down kitchen, two foul-smelling bathrooms and a dozen showers for almost 80 people. In the Veselka the toilets are often blocked and there are no locks on the doors. Somebody has written a couple of things on the walls here. The first is an ironic exchange – Fuck Foxconn – I’m looking for a job with Foxconn, while the second is less inventive – Fuck Express People.
Both groups work 12-hour shifts in the Foxconn factory. We’re not in China but in Pardubice, 100 kilometres from Prague, where the company bought a factory at the beginning of the 21st century. The city of Kutna Hora, a few dozen kilometres further away, has been home to another factory for about five years and, if you carry on as far south as Nitra, across the border with Slovakia, you will find Foxconn’s third and final base in the European Union. Foxconn manufactures computers, laptops, servers and printer cartridges in Pardubice and Kutna Hora for Hewlett-Packard, while Sony’s orders for flat-screen TVs keep the production lines busy in the Nitra factory.
There is, of course, no comparison in numerical terms with the Chinese factories: fewer than 10,000 people are either directly or indirectly employed here. Nevertheless, the practices employed in the two Czech factories owned by the Taiwanese multinational, the largest electronic manufacturing firm in the world, reveal new frontiers in labour organisation and management for the European employment system. The Czech Republic is a kind of “special export zone” within which multinationals can experiment with various ways of managing a workforce with average European salaries. A proper state machine implemented by various Eastern European countries in order to attract foreign investment supports the efforts of the manufacturing industry.
Transnational labour flows
In the two factories the workforce, two-thirds male, operates within departments strictly subdivided according to the product and, when necessary, the brand. This system of separation responds to various needs: until a few years ago the Kutna Hora factory made products for Apple, but when the workers started getting together to demand better working conditions, the division was closed. “They laid off 29 people every ten months - if the number reached 30, the dismissals had to be authorised by the trade union and the local authorities. Those who agreed to leave the union carried on working,” explains Gabriel, one of the 300 or so people that were sacked.
In the Czech factories, alongside the local workers and their Slovakian counterparts, who usually perform supervisory and management roles in the factories, we find migrants from various countries: Bulgaria, Mongolia, Romania, Poland, Ukraine, Vietnam. The historic links between these former socialist countries form a foundation for these migratory flows, which are often managed by recruitment agencies with international branches. For the European migrants, including the Ukrainians, mobility is usually cheap, as it is for the Mongolians, who emigrate via networks of friends and relatives.
English and Chinese managers are in charge of this multinational workforce, which is usually employed to perform repetitive tasks lasting 40-60 seconds. It is generic work, easily replaceable. “They only want people aged between 20 and 35 because the work is very fast,” explains Madalena, a young Romanian who had already worked in Slovakia and Spain before coming here. Madalena comes from Tulcea in the Danube Delta, where she used to work for an Italian textile firm. “I’m better off with Foxconn than back in Romania. I earn 400-500 euros per month and I sleep in this room, which is paid for by the agency, with my husband.”
Madalena, like many others, is part of the large pool of workers experiencing a new freedom of labor movement within Europe. For the moment this experience does not seem to be making workers see themselves as all belonging to the same social class; instead a belief is growing that you need to seize opportunities to work in different countries. Petre, a 30-year-old Romanian, alternates between jobs abroad and in his native country. “I’ve worked in Hungary as a bricklayer, in Slovakia in the TPCA factory (a joint venture between Toyota, Peugeot and Citroen), I’ve done agricultural work in Italy and now I’ve come here. When I arrived in Imola in September 2011, the hourly wage was 6 euros. By March 2012 it had gone down to 3.50 euros, so I decided to go back to Romania. Then I heard that an agency was looking for people to work for Foxconn, so I came here.”
The nationalities of the immigrants working for Foxconn reflect the general situation in the Czech Republic, where in 2011 they made up 5.4 percent of the employed population, around 310,000 people. The biggest groups are Slovakians (114,000), Ukrainians (70,000), Vietnamese (34,000), Poles (21,000), Bulgarians (8,000) and Romanians (7,000). There were over 13,000 Mongolians in 2008, but this figure has dropped to 3,300. The number of Ukrainians and Vietnamese has also fallen because of the new migration policy aimed at citizens of non-EU countries and Bulgaria and Romania’s joining the EU.
It is no coincidence that Romania and Bulgaria have both experienced a net increase in emigration to the Czech Republic since 2008. In the areas around both Pardubice and Kutna Hora the number of residence permits increased steadily between 2001 and 2008 and has subsequently decreased at a similar rate. In 2001 there were 621 non-EU immigrants in the two cities, rising to 9,457 in 2008 but falling to just 1,937 in 2011. Workers from within the EU can now circulate without any specific restrictions, but those from outside the EU need to renew their residence permits every six months at a cost of 100 euros. In addition, a regulation which came into force in January 2012 prevents companies from hiring non-EU workers through recruitment agencies. In order to circumvent this regulation, Foxconn subcontracts certain departments directly to the agencies, which find themselves with new responsibilities as employers, especially when a labour inspector turns up at the factory.
By relying on recruitment agencies, Foxconn is guaranteed considerable flexibility. During peak periods, in the run-up to Christmas when shops in the west are full of customers looking for the latest technological gadget, around 4,500 people are usually working in Pardubice and 2,500 in Kutna Hora. In both cases, 40 percent of these are temporary workers, mostly migrants, some of whom will soon be going back home or having to look for another job. The workers who have a contract with an agency cannot, apart from exceptional cases, be hired by Foxconn straightaway, but they need to wait at least six months before starting work. Some agencies do defraud their workers, but these are an exception to the rule.
A workforce united?
And so there is a multinational workforce in the factories which, for the moment, doesn’t seem to have bonded, and often remains divided along ethnic lines. On the other hand, the company’s focus on the idea of a community seems crucial, both for facilitating the cooperation of a workforce that often cannot speak the local language and, especially, for monitoring and managing behaviour in the workplace through a chain of intermediaries: production line leaders, department heads, interpreters and agency employees. Direct and indirect workers coexist, therefore, without interacting much because of both linguistic problems and mutual false perceptions by each group about the other. Both temporary and direct workers complain that the members of the other group are allowed to work overtime and therefore earn more.
Working hours vary according to the daily needs of the company. Direct workers usually work eight-hour shifts for around 40 hours per week, but temporary workers always work 12-hour shifts, despite rarely working five days per week. “I work on average 165 hours per month. I usually work three days a week, sometimes four, for twelve hours a day. That’s not many hours per week, I’d like to work more,” says a Bulgarian worker. One of the key aspects of the Foxconn system is its unquestionable power in managing a workforce in a constant state of flux, as a Polish worker explains. “Last month I only worked 51 hours and I made 3,000 Koruna (120 euros). I went to the factory every morning to see if there was work, but they said that there was nothing for me. There were a few hundred of us, but the boss only called about ten people so the rest of us just went back to our dormitory.”
As well as this distinction in terms of working hours there’s also a distinction in terms of wages: Foxconn employees are paid about 3.50 euros per hour and earn 600-700 euros per month, but the temporary workers have to make do with 2.50 Euros per hour and a monthly pay packet of 400-500 euros. It’s true that Foxconn pays out 6 or so euros per hour to the recruitment agencies, but, as well as paying the workers, the agencies have to cover their transport and accommodation. The recruitment agencies are in fact an essential element in managing both the productive and the reproductive aspects of the system.
Migrants with a good understanding of the Czech language work for the agencies to monitor employee performance within the factories, while others focus on the dynamics of everyday life, right down to the dormitories. “At least once a month somebody comes to check that no extra people are sleeping here. They have keys to the rooms and they go in when we’re not there,” Alina tells us. These dormitories, often distinguished by nationality, house temporary migrant workers at the expense of the agency, which deducts around 150 euros from their wage packets. The few workers who choose to look for independent accommodation can use the 150 euros, but rents in town are usually three times higher.
The long shifts and frenzied production activity that the factory sometimes experiences leads to a high turnover of workers. A trade union representative explains, “The main problem for the union is the turnover of both migrant and Czech workers because the work is very repetitive and quick. The annual turnover is around 20 percent, with at least 30 people being hired every month.” In actual fact the turnover is difficult to calculate: the number of workers is closely linked to the company’s manufacturing needs and so temporary workers can be sent home when the amount of work drops. “In mid-August they sent 300 Romanians home because there was no more work,” Marius tells us.
The role of the union remains marginal, not only because of the low levels of membership – 250-300 in Pardubice and fewer than 100 in Kutna Hora – but particularly because it is only concerned with core employees. “We don’t have access to the migrant workers, not least because they don’t speak Czech... we don’t deal with residence permits because one of Foxconn’s workers is in charge of these bureaucratic procedures.” And yet the union’s office, on the ground floor of one of Foxconn’s buildings, is next door to the major recruitment agency, Xawax. It’s no coincidence, perhaps, that the temporary workers’ complaints are dealt with almost exclusively by NGOs set up to support the migrants. This exclusion of temporary migrant workers from union representation makes the future role of the unions uncertain since, as a recently sacked ex-employee explains to us, “In the end there were only temporary workers on the production line.” The vulnerability of migrant workers as they replace organized labour is symptomatic of a trend all of Europe must watch out for.