Echo, iPhone production moving from China to India

Bloomberg

On a steamy summer morning, dozens of buses pull up outside a cluster of low-slung, blue buildings in the south Indian state of Andhra Pradesh. Women dressed in colourful salwar kameezes disembark, their dupatta body scarves billowing as they make their way past hibiscus bushes and posters proclaiming, “Our aim, no accident.”
The night shift at Foxconn Technology Group’s mobile phone plant in Sri City is ending, and thousands of young women are punching out as others stream in to replace them. One of the arrivals is Jennifer Jayadas, a tall, slim 21-year-old who lives several miles away in a two-room hut with no running water.
After gobbling down a free breakfast of chapatti flatbreads with a potato-and-pea curry, she dons a checked white
hat, apron-shirt, static-resistant footwear and tiny finger gloves. Then Jayadas takes her place at a testing station where she will spend the next eight hours making sure the volume, vibration and other phone features work properly. “Smartphones used to be all made in China,” she says. “Now, we make them here.”
Foxconn, also known as Hon Hai Precision Industry Co, opened its first India factory four years ago. It now operates two assembly plants, with plans to expand those and open two more. India has become an important manufacturing base as the Taipei-based company looks to diversify its operations beyond China.
Succeeding in India has become all the more urgent since US President Donald Trump launched a trade war last year and announced tariffs on thousands of products manufactured in China, including the gadgetry Foxconn makes for Apple Inc, Amazon.com Inc and others.
In late August, Trump ratcheted up the rhetoric—ordering American companies to start pulling out of China and citing a national security law as justification. He backed off two days later, but many companies have resigned themselves to an inevitable and costly rethinking of their global supply chains.
“It’s a good business principle not to put all your eggs in a single basket,” says Josh Foulger, who runs Foxconn’s India operations.
“We have to find viable and reliable alternatives. Obviously the alternative location has to be competitive. We can’t put a factory in Mexico for manufacturing mobiles. It might have worked 10 years ago, it just won’t work today.”
Foulger, 48, grew up in Chennai and attended the University of Texas in Arlington, before returning to India to set up manufacturing for Nokia. He joined Foxconn four years ago to help founder Terry Gou establish assembly plants in India, now the world’s fastest-growing smartphone market.
Foxconn’s first India facility started in 2015 in Sri City, a special economic zone where goods can be imported and exported with limited red tape and foreign companies make everything from diapers to train carriages. Foxconn’s plant employs almost 15,000 workers—about 90 percent of them women—and assembles phones for various manufacturers, including local best-seller Xiaomi. In recent months, workers began testing and assembling Apple’s iPhone X, which will be sold in India first and eventually exported.
A second mobile phone factory opened in 2017 in Sriperumbudur, about two hours by road from the first facility. It employs 12,000 and is partially automated.
“By 2023,” Foulger says, “both factories will be much larger and we’ll add two more locations.”