1. Which of the following is FALSE concerning the Taiwanese company HonHai (also known as Foxconn)?
a) Foxconn is the world’s largest contract manufacturer, producing millions of electronics products such as Apple iPhones.
b) Foxconn has a huge manufacturing complex in Shenzhen which employs 240,000 people.
c) Due to increasing wage costs on the coast, Foxconn has built new facilities in Henan province, which employs more people than in Shenzhen.
d) Foxconn has begun expanding in Mexico and Brazil.
e) Foxconn is considering opening a factory in the US, in response to pressures on Apple for reshoring.
f) While Foxconn’s sales are growing by over 15% per year, its profit margins are relatively weak.
g) Working conditions in Foxconn’s China factories are worse than in Bangladesh, and the number of worker suicides has continued to increase every year.
h) Foxconn has started outsourcing worker services, such as the dorms, catering, and security.
i) Automation of electronics production is difficult, due to frequent model changes, but Foxconn is reportedly close to developing robots that will meet its needs for flexibility.
j) Foxconn has started vertically integrating backward by buying a share in Sharp, which makes glass display screens.
k) Foxconn has started vertically integrating forward into retail chains in China.
2. Which of the following is NOT a factor influencing Japanese airlines’ decision to remain steadfast Boeing customers, despite problems with the batteries of the Dreamliner?
a) The batteries were manufactured by Japanese companies.
b) Japanese airlines were given a significant say in the Dreamliner’s design.
c) The Japanese airlines have a long, close relationship with Boeing, in part because they were urged by Japan’s trade and finance ministries during the 1970s and 1980s to buy planes from Boeing to offset the huge US-Japan trade imbalance.
d) Even though Japan does not have its own commercial airplane manufacturer, the Japanese take pride in the fact that 35% of the Dreamliner is Japanese made. The textile manufacturer Toray Industries, for example, has provided light-weight materials for the body of Boeing planes since the 1980s.
e) Airbus alienated the Japanese by including them in a trade dispute with Boeing in 2005.
3. Which of the following is true concerning auto production in Mexico?
a) In 2012, Mexico was the fourth largest exporter of cars, after Germany, Japan, and South Korea.
b) Brazil and Argentina are encouraging the continued expansion of car imports from Mexico into their countries.
c) Mexico benefits the most when US auto buyers switch to larger vehicles with higher profit margins, such as SUVs and light trucks.
d) Drug wars in Mexico have not had an impact on foreign companies’ plant location decisions in Mexico.
e) Foreign auto parts companies have so far resisted locating in Mexico, and thus an auto cluster with supporting industries has been slow to form.
f) Most of Mexico’s car exports are Mexican brands, rather than Japanese, US, or European brands.
g) Mexico has not yet exported any cars to China.
h) All of the above are true.
4. Which of the following in FALSE concerning the Chinese Internet company, Alibaba?
a) Alibaba started in 1999 as an online listings service, connecting small Chinese manufacturers to foreign customers. It has expanded to include Tmall, where companies sell to the public, and Taobao, where members of the public sell to each other.
b) Alibaba is a private company located in Hangzhou with 24,000 employees.
c) Alibaba has bought back some of Yahoo’s former 40% ownership in the company, and it plans an IPO to complete repurchase of Yahoo’s shares.
d) Alibaba has successfully eliminated counterfeit products from its site in order to expand successfully in markets outside China.
e) Because Chinese are very price-sensitive, Taobao does not charge fees to buyers or sellers: Alibaba makes its money from advertising and services such as website design for fancy storefronts.
f) Due to low levels of trust among strangers in China, Alipay works differently from PayPal by taking money up front and putting it in an escrow account.
g) Due to limited credit available in China for small businesses, Alibaba has used the information it obtains from vendors to screen for good credit risks and offer small loans.