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The most complicated and potentially lucrative market, however, is in Europe, where Flextronics employs 25,000 workers in 15 very different countries. Some, like Germany and France, are heavily unionized, and workers in some parts of Eastern Europe retain the slothful habits they developed at communist state-owned factories. Still, wages for low-skilled factory workers in Hungary are about $2 an hour, versus $15 in neighboring Austria. And wages are even lower in Ukraine, where Flextronics began experimenting with a pilot project early this year. In a corner of what was a dingy Soviet domestic-appliance works in Beregovo, workers now assemble circuit boards for as little as 40[cents] an hour.
Low-cost factories in Eastern Europe allow Flextronics to deliver products to wealthier consumers in Western Europe weeks faster than do factories in Asia or Latin America. "About 70% of world electronics are sold in the Christmas season," says Roger Moore, executive director at the Flextronics industrial park in Zalaegerszeg, Hungary. "If you've launched a new product in August, you really don't know whether it will take off until the season gets moving around the end of October. If you discover it's a real hit, and it is being shipped from China, it won't reach you until it's too late." That's why most of Flextronics' Xbox production is in Guadalajara, near its primary market in the U.S.
--With reporting by Daren Fonda/New York, Luis Miguel Gonzalez/Guadalajara, Jane Lanhee Lee/Xixiang, Laura Locke/San Francisco and Jan Stojaspal/Sarvar