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Foxconn Technology Group, the electronics manufacturing giant, has halted recruitment at one of its key plants in Shenzhen, due to plans to further automate its production processes, and a higher-than-expected return rate of workers after Spring Festival.
Liu Kun, a spokesman for the company, which makes various kinds of Apple products including the iPhone and iPad, said it had been on a steady course for a while to replace manpower with robotic systems.
"We have canceled hiring entry-level workers after Spring Festival, a decision that is partly associated with our efforts in production automation."
The company has added just a few skilled workers, he said, and it is still looking for "a limited number" of seasoned skilled workers who have prior experience of operating mechanics.
The move reflected Foxconn's wish to move up the value chain by accelerating automation process, a commitment made by its chairman Terry Gou, Liu said.
The week following Spring Festival used to be Foxconn's prime time for hiring new workers. Last year during this time it added 30,000 to the workforce in Shenzhen and elsewhere.
But Liu said that "since 90 percent of workers have come back to work after the holidays, we now see the supply and demand sides well in balance", adding that a 160 percent surge in salaries since 2010 had also helped retain employees.
The announcement of the freeze on new staff sparked widespread speculation among media in China — including the Beijing News, quoting unidentified sources — and overseas, that it was the result of slowed orders from Apple, especially for its smartphones.
But the company said in a statement it was not linked to any single customer and that any speculation to the contrary was false and inaccurate.
Foxconn operates a network of factories across the Chinese mainland, employing 1.2 million people, that also make products for tech companies from Hewlett Packard to Dell.
In Zhengzhou, the capital of Henan province, the base salary for workers is 1,800 yuan ($288), which is more than 70 percent higher than the city's minimum wage level set by local authorities.
Gou has endorsed the growing use of robots by arguing that they can free employees from repetitive and boring work, and some are specifically designed to operate in dangerous or special environments where conditions could pose a risk to human health.
In 2011, Foxconn vowed to install up to 1 million robots in its factories over the next three years, which analysts suggested was in part to address long-time scandals such as high suicide rates among employees and exploitation of workers.
Zhu Shiqiang, a professor in the department of mechanical engineering at Zhejiang University, said that introducing robots to factories is efficient because they can work 24 hours a day, offer better output for repetitive processes, and are often more accurate.
Zhu added that more importantly, with an economic overhang from the West, there is widespread urgency among Chinese firms to move up the value chain, in a bid to transform themselves from being dependent on manpower production to becoming "intelligent" manufacturers.
Many multinational companies have already recognized the long-term tradeoffs of replacing human labor with robots.
According to a recent report in The New York Times, Dutch consumer electronics giant Royal Dutch Philips Electronics Ltd has built a factory in Drachten, the Netherlands, where 128 robots are doing the same work as hundreds of workers in its sister factory in Zhuhai, Guangdong province.
Foreign manufacturers in China are already viewing upgrades as vital to their operations in the country.
German machine tools maker Trumpf GmbH Co, for instance, has started to see faster, more precise and economical production patterns through programmed robotics.
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