Is Apple Inc. (Nasdaq: AAPL) building its roaring success on the back of poorly paid Chinese workers assembling the company's products in conditions that don't meet international labor standards?
This question has dogged Apple for some years, but a recent series of articles in The New York Times paints a powerful picture that casts the world's most valuable consumer electronics company in a highly unflattering light. The articlesdetail conditions at factories operated in China by Foxconn Electronics Inc. , the main contract manufacturer for Apple and many of the world's leading high-tech companies.
Supported with anecdotal evidence as well as reports from human rights organizations and interviews with unnamed current and former Apple executives, the articles essentially hold Apple indirectly responsible for some of the labor violations at Foxconn facilities. The violations include "involuntary labor, under-age workers, record falsifications, improper disposal of hazardous waste and over a hundred workers injured by toxic chemical exposures," according to the NYT.
Like many of its peers, Apple makes most of its products, including the Macintosh computers, iPhones, iPods, and iPads, in China, and therefore is open to criticisms. Some of the criticisms are valid. However, it's also clear that the company has taken steps in the last years to improve conditions at the facilities that make its products.
Despite its prior actions, though, the NYT articles clearly indicate Apple has a problem that won't go away easily. Let's not mince words: Foxconn makes Apple products in China because it can do so cheaply and faster than in Western plants. The contract manufacturer has endured many negative publications in recent years, including the suicide of some employees.
Foxconn has an image problem. So does Apple. The problem has been associated with Foxconn, while Apple has managed to avoid many of the negative implications. Until now. In a follow up blog, I will be focusing on how this is a bigger problem for the entire electronics industry.
How Foxconn is able to provide this service is not Apple's concern. It may be unethical, unfair and may have labour violations. The body who needs to be concerned with such matters is the regulatory bodies in China controlled by the government. The Chinese government needs to care about its people first so that they are not exploited. If the government of a country does not care about the welfare of its citizens, how can a private company bringing business in be blamed for the unethical practices in that country? Objectively speaking, I think this is unfair.
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It underlies the core of the argument and thinking that there is only so much Private entities can(& should do).When it comes to issues of National importance(like this issue of Supposed Labor violations or otherwise) the State has to step in and clear things up decisively.
What has not escaped anyone's understanding is that Chinese workers needs and aspirations have grown in the last decade or so(not to mention their cost of living as well).They expect much-much more from their companies than before[Wage inflation means most Western manufacturers think twice before investing in China today].
The Chinese state also has failed to take care of their own people today.Thats what happens when the Chinese State has a vested interest(through their personal investments) in maintaining the status quo.
Anna and others,
My experience of using CMs overseas, includes the placement of employees of my company being placed in key positions watching over the various aspects of production and Quality Control. This cuts down on communication problems and allows for a program management that is immediately kept up-to-date on critical developments. If Apple had these key people on site at Foxconn, then they would have been acutely aware of any abuses and certainly able to have some impact on the employee conditions and treatment. If they turned a deaf ear and a blind eye, then they should be questioned and held accountable for not insisting on better working conditions. I think Foxconn execs would rather make a few quality of life changes for workers rather than lose Apple's business. Apple is in a major leverage position and can assure the needed changes without being charged more from Foxconn.
Apple's management should have taken steps to rectify the unacceptable conditions and safety standards the workers at Foxconn factory were subjected I agree. I resonated this by stating that Apple's "conflicts of interest" obscured it's moral obligations.
Apple works with a company called PowerON to safely recycle used Apple products
More details here
http://www.apple.com/recycling/gift-card/faq.html
How about using the end-material/output[Especially Metals like Gold,Silver,Copper and other Heavy metals] from the recycling back in the Apple Manufacturing process???
I am sure it would require some money spent on re-integrating these things together,but for sure,its do-able.
This will instantly(by getting reflected in the bottomline) put pressure on Apple to re-use as much metal as is possible from their old products.
Also,it will mean a dramatic drop in unsafe recycling practices done in Countries like China,Nigeria and other parts of Africa.
This is a typical problem most Western consumers face.
Lack of personal responsibility.
You have the tools right in front of you-Facebook,Twitter,etc;WHich are more than enough to run a sustained campaign to put pressure on Apple to change their business habits.Obviously,the best way to do it is through the market-Stop buying their products.
But as you point out very clearly,thats beyond you.
So you have to find other ways to get your points (as a Apple Fan) across to the people at Cupertino.
Sorry, Ashish, but I think you miss the point(s). Mr. Ojo asked a bold question - "Does Apple have a Foxconn problem?", and I presented you with a hypothetical to challenge the boundaries...e.g., is it ok for a company (not just Apple) to do whatever they want as long as they "Deliver the best quality products at the best prices and also generating record profits for shareholders" as you state?
I don't expect Chinese workers to enjoy the same benefits, salary, and living conditions that we enjoy here (USA), but there must also be an agreeable baseline (aka "playing field") from which all countries build. In our mad rush to manufacture products in low cost regions, we ought to remind ourselves that this has ramifications - both positive and negative.
You're right that the consumer decides, and that I am a weak person for buying Apple and other products without demanding a higher standard. But then again, I'm addicted....and the herion addict doesn't really care where the poppy is grown.
Last year Samsung was neck to neck with Apple in the sales of Smartphones & Tablets. Where does Samsung assemble their widgets ? So. Korea or some LCMR like China ?
Would it still be ok to earn an almighty dollar (or $400,000 per employee as the case may be)?
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I just want to say that The reverse argument equally applies-If you are not happy with Apple's Business practices,Don't buy their products,Its as simple as that
[Many years back,The World's Greatest Empire -The British Empire was brought down by a simple man-
Mr Gandhi by simply focussing on a total boycott of British products;I am sure it won't be too hard to do the same with Apple??? After all,you have Twitter and Facebook now which he never did have...]
I don't think that I ever heard (or saw) Steve Jobs jumping up and down and claiming his products are revered gifts to humanity[AS you point out].
Its only deluded Apple fanboys who believe in the Hype and bubble originating out of Cupertino who have themselves to blame for this situation.
And finally,once again here
"That's the same motivation that drives so many other US and European companies to turn their heads while their distributors are breaking every rule to sell products in China.
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What consumer protection or market rules did Apple break to sell their products in China???
You want a level playing field for whom???
As I said at the very beggining not very clear and coherent.
By moving to the core of the industry and offerings services that keep the system humming, a group within the electronics market has rendered irrelevant the question of ownership and control of the supply chain.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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