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 articles detail 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.