Now, Foxconn to suspend production at Sriperambudur unit!

New Delhi: After its major client Nokia suspended productions at Sriperambudur unit, Foxconn is all set to shuttered down its operations at the plant effective from December 24.

Although negotiations are still on between Foxconn India plant's workers and the management as the union wants continuation of operations and the management is urging for a settlement package.

Foxconn, a major supplier to Nokia, has officially announced that it will suspend production on December 24 after finishing off residual inventory.

The Assistant Commissioner of Labour Dharmaseelan has said that the factory needs to comply by certain rules as per the Industrial disputes Act before closing down its operations.

The factory now employs about 1,700 employees, nearly down to a fifth of about its peak workforce over the last seven years. Media reports said quoting E Muthukumar, President of Foxconn Employees union, “the union wants Foxconn to find clients to keep the plant running. The union also did not accept the management's argument that a factory primed to manufacture feature phone does not fit in a smartphone world.  They can upgrade the machines, and keep us in employment. Considering the workforce is down to a fraction, they will not have major costs to bear."

However, Foxconn has said in a statement: "We can confirm that our India operation, FIH India Private Limited, will be suspending all operations at our manufacturing facility in Chennai effective December 24, 2014. This action is being taken due to a change in that facility's customer base and a related change in the manufacturing requirements of our customers in India."

The company added the move to shut its manufacturing facility involves a restructuring of its business in India, where it might consider investments based on how its customers’ needs change.

Experts say, with Nokia’s exit, Foxconn simply didn’t have enough orders in India and exporting wasn’t an option, as markets such as Vietnam, where smartphone assembly has taken off in a big way, are even more cost-competitive.