Taiwanese firm Foxconn, the world's largest contract manufacturer of mobile phones, is preparing to wind up its Chennai unit due to lack of orders, especially after major client Nokia has closed its Indian operations.
It would be a sad Christmas present for employees, as reports say the company will shut down operations on 24 December. The fate of around 1,700 employees will now be uncertain.
Foxconn's Indian unit was greatly dependent on Nokia and its nearby plant for business. Foxconn had already started cutting down production, giving many employees the VRS (voluntary retirement scheme) option, like Nokia.
Foxconn came into India in 2006 following its most important client at that time, Nokia. The company had two units in Sriperumbudur HiTech SEZ and one inside Nokia SEZ.
The losing of Foxconn will be the second biggest hit to the Sriperumbudur electronics SEZ, which saw Nokia shut its operations on 1 November (See: Nokia shutters its Chennai plant; workers get Rs7.5 lakh package). It may also send shivers up the spine of the Tamil Nadu government.
The Centre for Indian Trade Union (CITU) was recently recognized as the employee union at Foxconn.
"About 70 per cent of our products were supplied to Nokia. The remaining 30 per cent, we were exporting to China and Vietnam. Now they say sales have been declining and there was no business," a union official said.
A Tamil Nadu government official said not only Foxconn but several ancillary units that have been supplying parts to Nokia had also seen an impact on their revenue.
CITU general secretary and MLA A Sounderrajan said the government should come forward and save the lives of employees.
"Already people have lost jobs after Nokia exit from Tamil Nadu - that should not happen again. The state governments should come forward and revive the facility," he said.