Posts tagged ‘Hewlett-Packard’


India Makes It Easier for Local Airlines to Fly Overseas – India Real Time – WSJ

India’s federal government on Wednesday relaxed the criteria for domestic airlines to fly overseas as part of a new civil-aviation policy aimed at driving growth in the sector.

Local carriers will no longer be restricted by the number of years they have operated domestically to fly abroad, Civil Aviation Minister Ashok Gajapathi Raju said.

Until now, they were required to complete five years of domestic service and have at least 20 planes in operation before being permitted to fly overseas. The government scrapped the time requirement but carriers must still reach the same criterion for planes or deploy 20% of their fleet on domestic routes.

Newer carriers such AirAsia India Pvt.—the local joint venture of Malaysia-based AirAsia Bhd.—and Vistara—the Indian airline venture of Singapore Airlines Ltd., have been pushing for a relaxation of the rules.

The new National Civil Aviation Policy was welcomed by Amar Abrol, CEO of AirAsia India, which started operating in India in June 2014. “The NCAP gives us clear direction to ramp up our operations in India and grow our business in the domestic segment before we scale our operations to fly international,” he said in a statement.

Both AirAsia and Vistara will need to increase their fleets significantly to qualify for starting international flights. AirAsia now has six planes and Vistara has 11.

Source: India Makes It Easier for Local Airlines to Fly Overseas – India Real Time – WSJ


Apple Manufacturer Foxconn Goes Green in China’s Guizhou – Businessweek

Guizhou may be one of China’s poorest and least developed provinces. But the flip side is an environment so pristine that President Xi Jinping recently joked its air should be bottled.

Terraced fields of rice paddies are farmed on June 4, 2013, in Jinping county, Guizhou province, China

Now, Taiwan’s Foxconn Technology Group (2317:TT), the world’s largest consumer electronics producer, with more than a million employees working in 30-some industrial parks across China, has set its sights on backward but beautiful Guizhou.

The maker of Apple’s (AAPL) iPad and iPhone and Hewlett-Packard (HPQ) servers is building an industrial park in China’s southwest, seemingly worlds away from its massive and gritty Shenzhen manufacturing base, that aims to be state of the art in energy efficiency and environmental friendliness. Set among karst hills on the outskirts of Guiyang, the provincial capital, the 500-acre park will keep about 70 percent of the natural vegetation undisturbed.

via Apple Manufacturer Foxconn Goes Green in China’s Guizhou – Businessweek.


Hauling New Treasure Along the Silk Road

NY Times: “AZAMAT KULYENOV, a 26-year-old train driver, slid the black-knobbed throttle forward, and the 1,800-ton express freight train, nearly a half-mile long, began rolling west across the vast, deserted grasslands of eastern Kazakhstan, leaving the Chinese border behind.

Dispatchers in the Kazakh border town of Dostyk gave this train priority over all other traffic, including passenger trains. Specially trained guards rode on board. Later in the trip, as the train traveled across desolate Eurasian steppes, guards toting AK-47 military assault rifles boarded the locomotive to keep watch for bandits who might try to drive alongside and rob the train. Sometimes, the guards would even sit on top of the steel shipping containers.

The train roughly follows the fabled Silk Road, the ancient route linking China and Europe that was used to transport spices, gems and, of course, silks before falling into disuse six centuries ago. Now the overland route is being resurrected for a new precious cargo: several million laptop computers and accessories made each year in China and bound for customers in European cities like London, Paris, Berlin and Rome.

Hewlett-Packard, the Silicon Valley electronics company, has pioneered the revival of a route famous in the West since the Roman Empire. For the last two years, the company has shipped laptops and accessories to stores in Europe with increasing frequency aboard express trains that cross Central Asia at a clip of 50 miles an hour. Initially an experiment run in summer months, H.P. is now dispatching trains on the nearly 7,000-mile route at least once a week, and up to three times a week when demand warrants. H.P. plans to ship by rail throughout the coming winter, having taken elaborate measures to protect the cargo from temperatures that can drop to 40 degrees below zero.

Though the route still accounts for just a small fraction of manufacturers’ overall shipments from China to Europe, other companies are starting to follow H.P.’s example. Chinese authorities announced on Wednesday the first of six long freight trains this year from Zhengzhou, a manufacturing center in central China, to Hamburg, Germany, following much the same route across western China, Kazakhstan, Russia, Belarus and Poland as the H.P. trains. The authorities said they planned 50 trains on the route next year, hauling $1 billion worth of goods; the first train this month is carrying $1.5 million worth of tires, shoes and clothes, while the trains are to bring back German electronics, construction machinery, vehicles, auto parts and medical equipment.

DHL announced on June 20 that it had begun weekly express freight train service from Chengdu in western China across Kazakhstan and ultimately to Poland. Some of H.P.’s rivals in the electronics industry are in various stages of starting to use the route for exports from China, freight executives said.

The Silk Road was never a single route, but a web of paths taken by caravans of camels and horses that began around 120 B.C., when Xi’an in west-central China — best known for its terra cotta warriors — was China’s capital. The caravans started across the deserts of western China, traveled through the mountain ranges along China’s western borders with what are now Kazakhstan and Kyrgyzstan and then journeyed across the sparsely populated steppes of Central Asia to the Caspian Sea and beyond.

These routes flourished through the Dark Ages and the early medieval period in Europe. But as maritime navigation expanded in the 1300s and 1400s, and as China’s political center shifted east to Beijing, China’s economic activity also moved toward the coast.

Today, the economic geography is changing again. Labor costs in China’s eastern cities have surged in the last decade, so manufacturers are trying to reduce costs by moving production west to the nation’s interior. Trucking products from the new inland factories to coastal ports is costly and slow. High oil prices have made airfreight exorbitantly expensive and prompted the world’s container shipping lines to reduce sharply the speed of their vessels.

Slow steaming cuts oil consumption, but the resulting delays have infuriated shippers of high-value electronics goods like H.P’s. Such delays drive up their costs and make it harder to respond quickly to changes in consumer demand in distant markets.”

via Hauling New Treasure Along the Silk Road –

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China’s Manufacturers Seek Ways to Cut Costs

Wage inflation and shortage of skilled labour is making outsourcing less easy to justify.

BusinessWeek: “In the southern Chinese city of Zhuhai, two hours by ferry and car from Hong Kong, there’s something new on the rooftop of the large factory complex owned by outsourcing specialist Flextronics International (FLEX): solar panels.

A worker on a communications equipment assembly line in Shenzhen, China

Flextronics first opened shop in Zhuhai in 1999, when the area was a backwater compared with Shenzhen and other industrial hot spots closer to Hong Kong. Today the company’s 50,000 Zhuhai workers produce Microsoft (MSFT) Xbox game consoles, Hewlett-Packard (HPQ) printers, Nike+ (NKE) FuelBands and other electronics. With wages rising quickly throughout Guangdong province along the coast, Flextronics managers must save money wherever they can. “Instead of paying the electric company, I’m able to generate my own electricity,” says Melinda Chong, general manager in charge of infrastructure operations.

A little savings here, a little there—that’s the new focus for multinationals that manufacture in the Pearl River Delta and other coastal export hubs. The country’s one-child policy is taking its toll. The number of working-age Chinese in 2012 fell by 3.45 million, to 937.27 million, according to the National Bureau of Statistics. While that’s just a small drop, it’s the first decline since record-keeping began and marks “the start of a trend expected to accelerate in the next two decades,” the Hong Kong-based China Labour Bulletin wrote in a June 11 report. “China no longer has an inexhaustible supply of young workers.”

China’s government is also mandating big raises: In 2012, 25 provinces increased the minimum wage by an average of 20.2 percent. The current five-year plan ending in 2015 calls for base wages to increase by an average 13 percent a year, part of a policy to address growing income inequality. Coping with mandated wage increases is “very tough,” says Carmen Lau, Asia vice president of human resources for Flextronics. Even when companies offer higher wages, they still find it difficult to hire workers since fewer young people are interested in toiling on factory floors. “We have a smaller and smaller pool” of potential recruits, Lau says.

Some of the biggest electronics manufacturers have relocated to other parts of China where workers are more plentiful and there’s space to grow. “They can’t get land in the Shenzhen area, so they have to be somewhere else,” says Cynthia Meng, an analyst in Hong Kong with Jefferies (JEF). Foxconn Technology (2354), the Taiwan-based maker of iPads and iPhones for Apple (AAPL), has expanded away from the coastal regions. There are 250,000 to 300,000 workers at a Foxconn plant in Zhengzhou in the central province of Henan, according to the company and Bloomberg Industries. Hiring in the interior has helped the manufacturer boost its workforce in China by 50 percent in two years, to 1.2 million.

Wages are going up in the interior, too. “The cost differential is merging very, very fast,” says Jitendra Waral, a Bloomberg Industries analyst in Hong Kong. “If you move inland, it’s not really saving you costs any which way.””

via China’s Manufacturers Seek Ways to Cut Costs – Businessweek.

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* Signs of Changes Taking Hold in Electronics Factories in China

Labour reforms, urged by major western firms whose products are outsourced to China are beginning to be felt.  However, one aspect, that of reduced overtime, is not welcome by many workers who would rather earn more even at the cost of leisure and health.

NY Times: “One day last summer, Pu Xiaolan was halfway through a shift inspecting iPad cases when she received a beige wooden chair with white stripes and a high, sturdy back.

At first, Ms. Pu wondered if someone had made a mistake. But when her bosses walked by, they just nodded curtly. So Ms. Pu gently sat down and leaned back. Her body relaxed.

The rumors were true.

When Ms. Pu was hired at this Foxconn plant a year earlier, she received a short, green plastic stool that left her unsupported back so sore that she could barely sleep at night. Eventually, she was promoted to a wooden chair, but the backrest was much too small to lean against. The managers of this 164,000-employee factory, she surmised, believed that comfort encouraged sloth.

But in March, unbeknown to Ms. Pu, a critical meeting had occurred between Foxconn’s top executives and a high-ranking Apple official. The companies had committed themselves to a series of wide-ranging reforms. Foxconn, China’s largest private employer, pledged to sharply curtail workers’ hours and significantly increase wages — reforms that, if fully carried out next year as planned, could create a ripple effect that benefits tens of millions of workers across the electronics industry, employment experts say.

Other reforms were more personal. Protective foam sprouted on low stairwell ceilings inside factories. Automatic shut-off devices appeared on whirring machines. Ms. Pu got her chair. This autumn, she even heard that some workers had received cushioned seats.

The changes also extend to California, where Apple is based. Apple, the electronics industry’s behemoth, in the last year has tripled its corporate social responsibility staff, has re-evaluated how it works with manufacturers, has asked competitors to help curb excessive overtime in China and has reached out to advocacy groups it once rebuffed.

Executives at companies like Hewlett-Packard and Intel say those shifts have convinced many electronics companies that they must also overhaul how they interact with foreign plants and workers — often at a cost to their bottom lines, though, analysts say, probably not so much as to affect consumer prices. As Apple and Foxconn became fodder for “Saturday Night Live” and questions during presidential debates, device designers and manufacturers concluded the industry’s reputation was at risk.

“The days of easy globalization are done,” said an Apple executive who, like many people interviewed for this article, requested anonymity because of confidentiality agreements. “We know that we have to get into the muck now.”

Even with these reforms, chronic problems remain. Many laborers still work illegal overtime and some employees’ safety remains at risk, according to interviews and reports published by advocacy organizations.

But the shifts under way in China may prove as transformative to global manufacturing as the iPhone was to consumer technology, say officials at over a dozen electronics companies, worker advocates and even longtime factory critics.

“This is on the front burner for everyone now,” said Gary Niekerk, a director of corporate social responsibility at Intel, which manufactures semiconductors in China. No one inside Intel “wants to end up in a factory that treats people badly, that ends up on the front page.”

The durability of many transformations, however, depends on where Apple, Foxconn and overseas workers go from here. Interviews with more than 70 Foxconn employees in multiple cities indicate a shift among the people on iPad and iPhone assembly lines. The once-anonymous millions assembling the world’s devices are drawing lessons from the changes occurring around them.

As summer turned to autumn and then winter, Ms. Pu began to sign up for Foxconn’s newly offered courses in knitting and sketching. At 25 and unmarried, she already felt old. But she decided that she should view her high-backed chair as a sign. China’s migrant workers are, in a sense, the nation’s boldest risk-takers, transforming entire industries by leaving their villages for far-off factories to power a manufacturing engine that spans the globe.

Ms. Pu had always felt brave, and as this year progressed and conditions inside her factory improved, she became convinced that a better life was within reach. Her parents had told her that she was free to choose any husband, as long as he was from Sichuan. Then she found someone who seemed ideal, except that he came from another province.

Reclining in her new seat, she decided to ignore her family’s demands, she said. The couple are seeing each other.

“There was a change this year,” she said. “I’m realizing my value.””

via Signs of Changes Taking Hold in Electronics Factories in China –

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