This transcript is automatically generated
Unionization vote on the other side of the world could have a big effect on the prices you pay for some of your favorite electronic gizmos.
From Smartphones to tablets to big screen TV is.
Foxconn the much maligned Chinese manufacturer of ipads and iphones and other consumer electronics.
Is letting their employees elect their own union leaders for the first time.
A move that could make the next -- when you buy a lot more expensive not to mention have a profound.
Meeting here at home.
More on this is Gordon Chang author of the coming collapse of China.
Let's start with foxman itself from what it's really like because you hear who predicts stories.
About the working conditions there you know you've been to -- you talk to these workers what is really like.
Was very regimented.
Foxconn runs the most -- factors on earth what does that mean basically you have six hours with -- a break twelve hour shifts.
You know you have students being forced to work in these factories they close their schools -- that Terry -- who is the owner of Foxconn can get some more cheap labor.
The problem here is -- Lebanese does our dorms where there -- packed into really small rooms -- -- -- -- An and we talked to a number of workers who who you know could get free housing from Foxconn but they wanted to live on their own outside.
Where they'd have to pay for it because -- are Coach infected there too crowded you know all the rest of it.
Yeah so now we're hearing that they may be able to unionize but.
Is that really the case well they will be able to elect their own representatives to unions but these unions are under the thumb of the all China Federation of Trade Unions.
Which is a state instrumentality which has really been used by the Communist Party do you keep workers under control not represented them.
And -- -- is really looking to the Communist Party.
And the union to keep workers in mind because the real story here is -- workers the first thing they're gonna do is they're not gonna bargain over wages yes of course they want more money.
But they're gonna bargain over working conditions because the system is so regimented that people just can't stand the system.
Yeah we did an amazing to me that -- companies here in the US who are.
So worried about their image com unity seems a progressive and liberal in their policies companies like apple then go in and buying products from a place where.
It seems like can you know better than -- but from all these reports that people are really working in sub human condition.
Yeah I mean basically what you have all these suicides three years yeah there were about 25 of them at one plant but when we went to -- and Jan.
And that's why I'm Foxconn is going to automate.
In 2011 they had 101000 robots next year they're going to have a million robots in China because people just don't want to do this work.
And and really the problem here if you have a system which although it's extremely efficient turns out products really really fast which is important for apple.
-- but nonetheless it's unsustainable because Chinese workers will not put up with -- so how.
Robots changed the equation and I mean does it how how does it change how many workers are involved -- -- -- -- has to build the robots and what does that -- to the cost of products here in the last well.
The cost of products is definitely gonna go up that seems to me to be pretty clear -- -- in December apple announced that that was bringing back one of -- product lines into the US which everyone said was the iMac.
And the part of the problem is because in China.
You've got now the worker militancy and you've got a number of other problems -- Chinese manufacturing.
You know low end manufacturing has started to leave China but also the -- telling.
Going to Bangladesh Vietnam Indonesia old wal mart's house brands are now made in Bangladesh where you know ten years ago they were all made in China.
And and it's not just low and you know Lenovo the Chinese laptop manufacture is bringing production to North Carolina.
I'm so you know clearly what we've got is a situation where Chinese manufacturing is becoming unsustainable.
So outlook the logical extension of this you see prices go up although if they can move it to Bangladesh and why are prices going up.
Well if it takes a lot at Terry gal moved Foxconn from Taiwan when prices wages got to like to China.
He will move it again.
But he's got a lot of sunk costs and -- -- so it's going to be taking a lot to move it outside so if they are not the low cost manufacturing base anymore are they also the go to guy for US debt.
And -- how does that relationship chain what what's gonna happen will be will buy a lot less products from China.
And and clearly -- -- relation.
-- is kind of degrade to a little bit because.
It just the manufacturers will not find China to be as hospitable as they have in the past it's it's wage rates its supply of workers which is really the most important thing.
Because a number of workers in China is declining -- that way since 2010.
Environmental rules also.
Bison population declining -- -- -- -- population is just that the -- population trends.
And they they started to decline in 20106.
Years before China's official demographers said that it would this is really very important and this gives workers a lot of bargaining power of and which means that Foxconn plans -- gonna slow down production because they know that they've got more power than they did five years ago -- great insight -- coming on thank you can't --