Tata wants to make iPhones in South India by copying China's dorm labour model. Here's why it won't work
Dec 9, 2024
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Discover the secrets behind iPhone City's massive workforce and the challenging conditions they endure. Explore India's ambition to replicate this model, but face the hurdles of regional unemployment and local political tensions. Unpack labor dynamics in tech manufacturing and the demand for skilled young talent. Delve into Tata's struggles with adopting labor models from China, the complications of relying on migrant workers, and the pressing need for sustainable employment solutions amidst automation challenges.
The efficacy of iPhone City's manufacturing model in China relies on a massive workforce of migrants and students, which poses challenges in India due to local labor dynamics.
Tata's attempt to replicate China's labor model in India faces significant pushback from regional leaders concerned about high local unemployment.
Deep dives
The Rise of iPhone City and Its Labor Model
iPhone City, a massive manufacturing plant in East China, produces over half of the world’s iPhones annually, demonstrating the scale and efficiency of Foxconn's labor model. This facility employs around 200,000 workers, primarily migrants and college students, to maintain its operations, especially during peak production seasons. The model highlights how significant manufacturing hubs, like those in China, utilize dense dormitory housing and long work hours to maximize output. However, this model is now being replicated in India, particularly in regions like the Narasapura industrial area, where Tata Electronics is setting up similar facilities, raising implications for local labor markets.
Challenges and Controversies of Labor Migration in India
As India gears up to meet its burgeoning tech manufacturing demands, significant challenges arise from the increased reliance on migrant labor, sparking political controversy. Regional leaders, such as S. Ramados in Tamil Nadu, argue against the hiring of migrant workers due to high local unemployment rates, even though companies like Tata claim local talent is often underqualified. Furthermore, the dynamic of hiring practices leans towards younger workers and a push for female employees due to their dexterity, complicating labor market structures. This situation creates a fragile balance, as companies risk backlash from local communities while trying to meet ambitious staffing goals amid growing automation trends.
What put iPhone city on the map is that it produces more than half of the world’s iPhone’s every single year. The global demand for the Apple iPhone has only increased over the years. To keep up with that demand Foxconn hires up to 200,000 workers – a mix of migrants and college students – to make sure that the assembly lines keep running. Especially during the peak season which happens to begin right around now, from September to February.
Iphone city is the perfect example of the China manufacturing playbook. It is what propelled China to emerge as the world’s manufacturing hub. It’s pretty simple – Foxconn and companies like it build these large facilities, pack millions of migrant laborers into dorms near their facilities, and get them to work long hours, in often tough conditions.
But now things are changing. More and more global companies are adopting a China-plus-one strategy. And India is becoming a favoured alternative.
And as the focus shifts our way, manufacturers in India are pretty much replicating the same China labour model. But this model has an indigenous problem.
Tune in
**This episode was first published on September 26, 2024.
Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.Listen to the latest episode of Two by Two here
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