Finnish personnel management, Taiwanese style

NOTES AND QUERIES

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By Antti Blåfield
     
      "I’m in a meeting. Ask Harju", said Samuel Chin, CEO of the Taiwanese Hon Hai concern, who lives in China. Calling him was Ilkka Sinervä, a journalist working for the Finnish financial daily Kauppalehti.
      The journalist wanted to know to what an extent Foxconn, which is part of the Hon Hai concern, still wants to continue its operations in Finland.
     
Timo Harju is the deputy CEO of Foxconn Oy. It was his job on Monday to make the announcement that the Taiwanese company was terminating 200 - 300 employees with permanent contracts, and probably another 400 with fixed-term contracts sometime later. The company is to shut down one of the two factories it has in the Lahti region.
      The announcement of impending discussions with personnel leading to job cuts was made in the form of a flyer that was left on the table of the cafeteria of the Lahti factory, where the deputy head shop steward found it. The head shop steward was on holiday, and he learned about the upcoming redundancies from a journalist who called him to ask for a comment.
      Foxconn’s behaviour was quite icy.
      Life can be hard in a subsidiary culture. The owners of the company are not committed in any way to their distant employees, and that can be seen in how those employees are treated. Nor does an absentee owner ever have to face the pain caused by terminations. It probably came as a surprise to Samuel Chin that a persistent Finnish journalist managed to reach him by telephone, interrupting an important meeting in such an unpleasant manner.
     
Foxconn used to be called Eimo.
      Owned by a local entrepreneur Jalo Paananen, Eimo manufactured mobile telephone housings for Nokia, but the operation became too big for Paananen, and two years ago he sold his enterprise to the Taiwanese Foxconn.
      Paananen cashed in twice - once when his company was listed on the stock exchange in 1999 and later when he sold it.
      On Monday Jalo Paananen gave an interview to the Lahti newspaper Etelä Suomen Sanomat, saying that a "damn tough game" was underway. "This is not greed on the part of entrepreneurs, or short-term quarterly business thinking. Rationalisation of operations has to continue for the sake of survival."
      "If anyone is jealous of entrepreneurs, or wants to become one, then go ahead. I’ll pay the registration fee", he said.
      After that, Paananen offhandedly took a jibe at [Paperworkers’ Union leader] Jouko Ahonen, [President] Tarja Halonen, and [Finance Minister] Antti Kalliomäki, saying that they were "showing the way" as the whole EU moves in the wrong direction.
     
Jalo Paananen’s interview is only one point of view in the whole sad story. The Foxconn disaster also involves corporate greed.
      Eimo prospered by pressing plastic covers for mobile telephones, but the company did not manage to keep up with developments, as fashions and demands changed.
      Although mobile phone housings were increasingly being manufactured out of various metallic alloys, Eimo stuck to plastic. Mobile phone manufacturers expected greater readiness on the part of their subcontractors to take part in the product design of the devices, but Eimo was not able to do that. The company took full advantage of the surge in popularity of mobile telephones, but the owners would not make enough investments into research and development.
      Consequently, the company weakened, and finally ended up owned by the Taiwanese, who wanted to become subcontractors of Nokia in Nokia’s home market.
      Apparently the Taiwanese learned only after the deal how far from the forefront of the industry Eimo was, and the consequences became apparent on Monday. If Eimo had invested in know-how early enough, the jobs might have been saved.
     
Paananen was right when he said that the reputation of Finnish employees was not enhanced in the eyes of the Chinese by the strike that was held in winter, which was sparked by the unwillingness of employees who were members of the Chemical Workers’ Union to switch to the terms of a contract negotiated with the Metalworkers’ Union.
      That kind of bickering is undoubtedly hard to understand from a Chinese perspective. But Finnish concerns do not seem to be of much interest to Mr. Chin anyway.
     
Helsingin Sanomat / First published in print 16.6.2005


Previously in HS International Edition:
  Mobile phone components manufacturer Foxconn eliminating 200-300 jobs (14.6.2005)

ANTTI BLÅFIELD / Helsingin Sanomat
antti.blafield@hs.fi