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.
@Ariella: That's exactly what my point was as well. There are people who have enough ethics to look beyond the price of the products they are purchasing. If Apple doesn't pay attention to these social issues being linked to it via Foxconn, it may face opposition from a large number of consumers at some point in time.
I agree that Foxconn may be manufacturing for other brands as well but Apple is, by far, it's biggest client. And more importantly, it's Apple whose image gets connected with Foxconn directly whenever something about working conditions at Foxconn is mentioned. Hence, if Apple has to rectify it's social image, it has to fix issues with Foxconn even if it's not the only client.
Given that Apple has a whole pool of surplus cash, it wouldn't hurt if they spend it on improving the working conditions within Foxconn. Rather than taking it as a vendor, Apple can consider Foxconn as it's business partner and look for mutual growth.
"We are least bothered about how well or how poorly their staff is paid or treated."
Most of the people not, but we should care about that also. Furthermore, your example cannot be compared with the situation in Foxconn because we are talking about deaths and not just a mistreating on the workers. So what you suggest to say a big bravo and to continue buying their products?
When we visit a reputed restaurant we go by the quality standards of its food and customer service. We are least bothered about how well or how poorly their staff is paid or treated.
In a professional scenario, one cannot poke his nose deeper or try to see something beyound the scope.
So why should a contractor like Foxconn's way of treating their workforce affect the reputation of Apple ?
@clairvoyant: Yes, that is very appropriate thing to do. Apple is quite innovative in this aspect and will find very suitable solution without loosing edge over other vendors.
That is true, hm. We shouldn't forget that this issue is related to many companies. However, with Apple being a large company in this marketplace, they could set an example for other companies and have good headlines in the media.
Yes exactly it will spread like a virus if no one bothers to clear the bad image which was there on the past. Evey possibility is there for Apple also to get hurt if it happens becasue Apple is kind of a part of it right now. True that customers wont forget easily on what happened in the past but atleast by clearing the present will take off some dirt from foxconn.
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.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
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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