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Apple: Too Cool to Boycott?

Of the many things that are hard to understand about Friday's fatal explosion at a {complink 2125|Foxconn Electronics Inc.} workshop in Chengdu, China, perhaps the most perplexing is why {complink 379|Apple Inc.} isn't hurting more.

If we think back ten years, international companies receiving negative publicity about unsafe working conditions had to take significant measures to protect their corporate images. Companies had to improve labor conditions (or at least convince everyone they had done so). Otherwise, there was the real risk of losing customers and investors, who wouldn't want to associate with businesses that repeatedly made supply chain deals with abusive factory operators.

This is particularly the case in the clothing industry. In the 1980s and 90s, products like Nike Air Jordan sneakers had the cultural value of today's iPads and smartphones. In 1996, reports of poor working conditions at a Nike plant in Vietnam caused an international furor over treatment of workers along Nike's Asian supply chain. In 2002, the American clothing retailer Gap faced potential boycotts over allegations of sweatshop conditions in its Asian and African factories.

The latest Foxconn incident suggests that electronics companies do not have to take sweatshop accusations as seriously as other industries have in the past. Why is Apple — and other silicon valley OEMs — different?

Part of the answer lies in the reporting. The explosions, which reports say killed three, occurred at a “Foxconn plant,” not an “Apple plant.” Just a decade ago, problems occurred not along Nike's supply chain, but at a “Nike factory.” Was it really a Nike factory? Of course not; it was a subcontractor, one just like Foxconn. But Apple and other companies have, apparently, done a much better job of distancing themselves in press coverage from their supply chain partners.

This may not last for long, however. Last week, three days before the Friday disaster, a group of labor advocates had shown up at Foxconn's shareholder meeting to decry the state of the factory. The group demanded the wage hikes that were promised and occupational safety improvements at the troubled Shenzhen factory.

The group had been protesting on and off for a year; little had come of its efforts, and international attention had waned. Instead of picketing last week's meeting in the usual way, the protesters decided to plank — lie face down on the floor, rigidly, like planks of wood. Planking has been a worldwide fad ever since a man in Australia fell off a balcony and died while engaging in the curious activity a few weeks ago.

The protesters cleverly realized that if reporters described them as “planking,” rather than “protesting,” they would get more attention and probably show up in more web searches. Voila: Wall Street Journal, New York Magazine, and various technology publications followed the story of Chinese electronics assemblers planking over poor working conditions.

It's been three days since the Chengdu plant explosion, and we'll soon find out if Apple manages to blame Foxconn for the disaster. We'll have to wait and see whether, with time, even an iPhone isn't cool enough to disguise the fact that the electronics supply chain is behaving as badly as clothing manufacturers of the past.

22 comments on “Apple: Too Cool to Boycott?

  1. AnalyzeThis
    May 23, 2011

    Marc, you're dead-on regarding the difference between the Nike situation and the Apple situation: when Nike was having all those issues, the reporting referred to the plants as being “Nike plants.” But Foxconn seems to be treated in the media differently and is never referred to as an “Apple manufacturer.” Perhaps Apple just has a better PR department? Maybe news organizations are just scared of pissing off Apple?

    That being said, the situation is different than the Nike situation in that I believe those Nike factories solely (hate to use a slight pun) made Nike products, while Foxconn does have deals with many other companies. For example, Foxconn also makes the Amazon Kindle. The company employs around 1 million people. I think things would be different if Foxconn was Apple's exclusive manufacturer. But they're not.

    Anyhow, it's not as if this is some new issue either. I mean Wired had a COVER STORY about Foxconn in March. Still, there doesn't seem to be a whole lot of outrage.

    Perhaps I'm cynical, but I don't expect Apple to catch additional heat for this recent incident. If so, they'll just promise to improve working conditions again, like they did last time with the mandatory pay increases and such. Although who knows if all (or any) of those promised changes have actually occurred.

  2. Nemos
    May 23, 2011

    “the electronics supply chain is behaving as badly as clothing manufacturers of the past.”

    It is very pity to read and hear this kind of behavior specially from companies that are in the top. It is very pity because we don't have learned from the mistakes of the past and after two decades, we are seeing the same concept:  “earning as much as we can with the minimum cost” .

    And It is very pity also for the consumers because with their behavior (continuing to buy products from particular companies) reward and contribute to this behavior.

  3. mario8a
    May 23, 2011

    Wow, Very sad to read there was an accident on that Factory.

    This article makes a very interesting point, is foxconn who has the accident and killed people, not Apple, however for the investors it will always be apple even when the customers will only heard it in local news.

    definitely the board of directors is looking to take care of their brand promise, which every body saw in Steves presentations.

    Regards 

  4. Parser
    May 24, 2011

    Boycott of Apple product is ongoing, but maybe it is not organized or quantified. I personally know two of my co-workers who would never buy Apple products and the list of reason involves poor labor practices, monopoly and several other. Every major company involved in mass market is going to have similar problems. Apple is reacting and trying to correct. The art of Apple's designs from engineering to industrial style is still more important to most potential customers. 

     

  5. FLYINGSCOT
    May 24, 2011

    I did a quick informal survey of friends and coworkers.  Almost everyone knew the model name of the latest Ipad and its selling price to within $20 but nobody had heard of the Foxconn explosion.  I reckon the brand image is so strong for Apple and the general knowledge of its logistical operation so lacking that there will be little fallout from this incident.  For such a change to occur it will take a concerted effort from pressure groups to raise public awareness of Apple's (and others') work practises.

  6. Marc Herman
    May 24, 2011

    I suspect it's a media issue as much as anything, in part because the technology press is enormous, and the labor and, surprisingly, environmental beats are virtually dead. It's hard to find a news organization with a reporter assigned to the labor beat; it's easy to find one with a reporter assigned to the technology beat. Your co-workers know the specs on the new iPad because that information is easy to get. In fact hard to avoid. The facts of that product's production by comparison — and I can tell you this from firsthand experience — require some effort to learn. In theory that's our job, the reporters, but there's a resources issue. It's not easy to convince media organizations to devote the resources necessary to investigate this sort of thing. Fifteen years ago, you could conceivably pitch a magazine a story in which you flew to vietnam, tried to enter a factory, and took a photo. Now, pitch that, and for the most part, you'll get told there just isn't the institutional will or the cash. In a lot of cases you could always read the local press for that. But in China, that's somewhat of a non-starter. Though there has been some coverage from the region. It helps if you can read Chinese or know someone who can. The Virginia Quarterly Review, a somewhat obscure but award-winning American magazine, just did an interesting story comparing the environmental and labor costs of producing an e-book, to the costs of producing a traditional paper book. It won't surprise anyone here that e-books are at least as messy a process as paper ones are. But that's not widely reported outside niche press like the VQR.

     

     

  7. Jay_Bond
    May 24, 2011

    It is very interesting to continue to see how the media affects the general population even when they fail to report certain items or things get exaggerated. It is like a large amount of the population are the mice following the pied piper. There is no difference between the Nike and Gap situations, and Apples current situation. The biggest issue is how the media puts a spin on it. Right now Apple has such a large global following that if news media was to report anything negative, the media outlet would feel the effects. Pure and simple Apple is using contractors to do a majority of the work in sub standard conditions. This all translates to more profits for Apple. If Apple and other large electronics companies made sure these factories were brought up to western OSHA standards, their profits would shrink drastically and they would have no financial reason to be overseas.

  8. Taimoor Zubar
    May 24, 2011

    I suspect that human rights activists and labor organization will be able to publicize the link between Foxconn and Apple and ultimately accuse Apple publicly for the harsh labor conditions. I think what they should do is take some ownership of the situation and take things in their hands. They should collaborate with Foxconn to revamp the production facility and improve to make it conform to the standards. While this may mean spending a large sum of money, it's definitely worthwhile and will ensure that Apple's brand reputation is not harmed in anyway because of similar incidents in future.

  9. Anna Young
    May 24, 2011

    You're absolutely right Jay_ Bond, In addition to your point, if “Apple and other companies have managed to distance themselves in press coverage from their supply chain partners” as a result of clever media spins,

     I suppose consumers should rethink their loyalty to Apple's products. It is imperative for Apple and Foxconn to improve the treatments of their workforce, I really can't see how long Apple and others can continue to distance themselves in this circumstances.

     

     

  10. SunitaT
    May 24, 2011

    It's been three days since the Chengdu plant explosion, and we'll soon find out if Apple manages to blame Foxconn for the disaster.

    If Apple thinks it can escape the responsibility by passing on the blame to Foxconn then its wrong. I think everyone understands that Apple is as guilty as FoxConn in committing human rights violations. It would be in the interest of APPLE to address the problem rather than shifting the blame.

  11. mario8a
    May 24, 2011

    Hi

    I think this will be the same case not too long ago with the massive suicides at Foxconn factories, noboy read on the News Apple employees are killing themselves.

     

    Regards

  12. eemom
    May 24, 2011

    Tirlapur – I totally agree with you, the question remains – why hasn't Apple done anything about the working conditions at their subcontractors.  Apple is enjoying great press right now as a market leader and innovator.  Bad press about conditions at a subcontractor, do not fall directly on Apple so they feel that they are immuned.  The more articles that mention apple, the more the company will feel pressured into improving conditions.  It is a shame that companies care about working conditions only to avoid bad press (or don't care if they don't get any bad press) rather than doing the right thing to begin with.  It's all about the almighty dollar, sad statement on the world today.

  13. garyk
    May 24, 2011

    All the talk is about Apple and Foxconn, Apple only cares about the profit they don't care about what happens at Foxconn. Yes they should care! The funny thing is CHINA doesn,t care how Foxconn runs there business, they just want the assembly CHINA. The USA should care how Apples controls there assembly at Foxconn. What about all the conterfeit product?

  14. Hardcore
    May 25, 2011

    It is actually makes interesting  reading, to see how many uninformed one sided views are being expressed against Apple.

    There are a number of factors to consider:

     

    1. Foxconn also assembles product for other suppliers ,including HP as well as some other well known US brands, and yet we very rarely see this information in such posts.

    2. Chinese factory safety laws are in some respects tighter than western countries, if any liability for the death of staff can be placed at the door of the factory owner or management, then generally such matters are handled by the more than efficient legal systems in China, in some cases this can result in life imprisonment or death sentence as well as the mandatory compensation to workers families.

     

    Apple and other companies using Foxconn  do have a role to play in this , and that would be ensuring that Foxconn is following all reasonable precautions regarding safety, but again Apple is pushing technology to such an extent that currently no one really knows what triggered the explosion, maybe it was the Aluminum powder, or perhaps an Iron tool made contact with a grind wheel, or there is the possibility of solvents.

    But Until the exact cause of the explosion has been discovered, it is a bit premature to lay this at Apples door. If they or Foxconn are guilty  then they both deserve to be taken to the cleaners, that said it is notoriously difficult to run a production facility in China and ensure that all the staff/mangers are doing what they are supposed to do.

    As regards 'boycotting' Apple, any slack in their sales will gladly be taken up by Chinese consumers, so ultimately such actions will be totally ineffective, but if it makes you feel like you are contributing to the cause, knock yourself out.

     

    HC

  15. Daniel
    May 25, 2011

         We are bothered only about the wide popular brands. Most of the companies are outsourced the components manufacturing and they are just assembling the components under some popular brands. I know in china many of the popular cloth brands are coming from small scale industrial units. They supply raw materials to these peoples and they will do the work on behalf of them, finally they will collect the finished products and put branded labels.

        For companies, they can have the products at a cheaper cost without any extra infrastructure or investments. Most of such products are medium to average in quality.

  16. FLYINGSCOT
    May 25, 2011

    Sorry for posting material from other sites but I saw this on Newelectronics…….

    The explosion at Foxconn is just the latest in a long list of problems for the company. It recently endured a spate of suicides which many blamed on poor working conditions. A total of 16 people leapt from the company's high buildings, resulting in 12 deaths. Another 20 people were stopped by the company before they could make similar attempts. Further controversy arose when the company's chairman, Terry Gou, hired Buddhist monks to pray for the workers and announced plans to build nets around the dormitories to catch any jumping employees.”

  17. Marc Herman
    May 25, 2011

    Hardcore, whomever that is, has usefully provided the standard rebuttal, and it's good to see that finally arriving to the discussion; even cliches have their uses. In this case, what interested me most about Apple specifically isn't that it's chiefly culpable. Rather, of all the companies doing business with Foxconn, it's by far the most valuable, and arguably, the one with the most success marketing its products by associating them not with quality or price or the usual selling points, but with a particular Apple culture. So when something bad happens at an assembly facility Apple contracts, it's interesting to me that bad news doesn't specifically stick to Apple. Because the kind of marketing they do would seem to make them more vulnerable to a backlash. More so than HP, say, who never put billboards of Gandhi up to sell their products (“Think Different,” etc). That's not to say Apple is being hypocritical. I don't much care if they are. But I do wonder why Apple's client base, who are exactly the sort of people who tend to care about this sort of thing, don't. The predictable answer is HC's — that this is egocentric hippie feel-good nonesense. But I'm not trying to ask whether or not boycotting is the right response. Rather, I'm asking why it hasn't happened, since the kind of people who buy apple products have, for better or worse, used this tactic before, in their responses to similar cases outside the electronics industry. I don't think it's because they think the Chinese courts will take care of it. I think it's because conditions are not well reported, because there's little funding to do so. And thus, they are not well understood. But it could be, as HC appears to believe, just knee-jerk silliness. I'm not sure there's evidence for that. Or at least, there's evidence that other explanations are more likely.

     

    As far as uniformed and one-sided, I agree. We are uninformed because we are not able to inform ourselves about these sorts of cases as easily as we are other things, like the specs of an iPad. And we are one-sided insofar as we believe something went drastically wrong last year, and appears to have yet to reach a remedy. So the little news we have is all somewhat discouraging. It's possible that something fabulous is happening under the radar, of course, and if so, do us the favor and tell us what it is, in detail.

  18. Mr. Roques
    May 28, 2011

    the more than efficient legal systems in China, in some cases this can result in life imprisonment or death sentence” … haha! it's truly more than efficient, not very democratic but lets say it works.

    This can't be blamed on Apple but the stress it puts on their contrators really has something to do with it.

  19. Tim Votapka
    May 28, 2011

    This situation – and all similar ones before it – bring up the concept of ethics and group dynamics. Responsibility and accountability aren't necessarily dependent on zip codes.

  20. Kunmi
    May 29, 2011

    Ringing at the bottom of every investor is the profit and this is not dependent on the current or future. If you know the answer to this question please let know: Is outsourcing of job reversible? If Apples engaged in working with Foxconn, it is all about profit.

  21. Hardcore
    May 30, 2011

     

    Hi Mark,

    yes… I would prefer not to write under a pseudonym, but it is more a requirement for personal protection, I'm proud to say I have had a number of credible death threats, one of which was made by 'directors' of a Chinese company and in front of other whitenesses (which would tend to indicate I'm successful in my job 😉 ).

    I deal with these sorts of 'issues' regularly and in the past have done so for some large companies, in many cases a manufacturing facility may have numerous rules and regulations in place, but unfortunately mainland Chinese excel at rule breaking, possibly as a result of the environment/government controls which ensure that the only way to accomplish anything is to break any number of rules. 

    All over China you will see government 'standard' slogans that state:

    “People have a responsibility to……”, (… equates to what you should/should not do) this is a set Chinese expression.

    This tends to have a knock on effect as regards health and safety(H&S) thoughts of the general public, in that they generally ignore such statements.

    We could say it is the responsibility of managers & supervisors to control workers, but such a statement generally indicate a lack of understanding of Chinese factories, their size, number and educational background of workers.

    As an example: I once berated a Chinese worker for crossing a main road with her eyes closed, her reply was not unexpected, she simply stated that she had as much right on the road as the vehicles(under Chinese law she is correct), but that since she was afraid of the vehicles, she would close her eyes … and run. Unfortunately this had a knock on effect for the other workers, since they would observe it was generally a successful way to cross the road and would follow suit, I on the other hand had seen this technique employed less successfully on more than one occasion. This sort of negative learning occurs continually in a production environment making it very difficult to stamp out.

    Personally I feel that if Foxconn or its customers were in anyway at fault, that they should be well and truly shafted, but having been involved in the investigation of a couple of factory fires, I understand that getting to the bottom of the cause can be problematic (rules were clearly in place , but workers deliberately ignored them),in both cases whilst the investigations were (by western standards) chaotic, the local police/fire staff did an exceptional job of locating the causes, one of which was an 'impromptu' rewiring of the staff dormitories power supply by one of the factory engineers so that they(a group of staff) could get 'free' power.

    Fortunately, neither case resulted in deaths, furthermore no information was to be found in any local paper or other report, compensation was paid to the workers who lost belongings in the fire, and a couple of staff 'disappeared'.

    In the case of Foxconn I do not think there is a deliberate policy to flout  H&S, because it would be far too unprofitable and disruptive, but I do suspect that perhaps some of Foxconn's customers do not the right 'mix' of expertise for identifying potential issues, certainly if this explosion turns out to have been caused by Aluminum dust, it is a fairly common problem in other businesses that inject mold and be-burr aluminum parts.

    As regards  “Terry Gou, hired Buddhist monks to pray for the workers “,

     It is easy for westerners to think this is 'funny', having been brought up to believe in a single god, but asians take this sort of thing VERY seriously, specifically because of issues related to dead people & unhappy Ghosts/Spirits. If Terry had not done this, then he would have received far more criticism from asians, for being uncaring and disrespectful to the dead, and it may very well have sparked further panic in the factory with some of the workers thinking that the ghosts of the dead were pulling more workers with them to the underworld, dealing with the dead in Asia is a highly complex area, especially if the persons death was un-natural.

     

    HC

     

     

     

  22. Marc Herman
    May 31, 2011

    Thanks for the reply, HC. Points all well-taken. To me it seems we're talking about two issues, which are the legal ones regarding labor and environmental standards required of imported goods, and the cultural ones regarding a US-based company's ability to carry on a relationship with an Asian manufacturer, at least to the extent that they can adhere to the legal standards. To take it out of the Apple/Foxconn case for a moment, we know, pretty conclusively, that lots of agricultural goods on the international market are the result of child labor. Importing goods produced by child labor is illegal in the US. However, I would bet that any chocolate bar you buy in any store in the US is, if not directly produced by a child's labor, reflects a market greatly influenced by the amount of child labor in, to use one example, the cocoa market. So how does one do business in chocolate bars? Very carefully, or with an air of blissful ignorance, seem to be the two most common solutions.

    In electronics, as with clothing decades ago, we know that standards are different in different parts of the world, and those differences in standards are in part what makes it useful for companies to outsource parts or all of their production process. Why are there gold mines in Indonesia and Romania and Guyana, but not in California? Because the former have lower environmental standards, and lower liabilities for accidents, than the latter.

    I'm not telling you anything you don't know. What I'm getting at is, in the case of Apple/Foxconn, the solution would seem to be a greater degree of transparency. I suspect, though can't prove, that articulating the reasons behind the accident — including the cultural challenges you describe so well — would help all involved. At some point, Apple or whomever is working with Foxconn will catch the attention of regulators. This could come, as it did in the case of clothing manufacturers, as a result of public outcry. It could come because some member of Congress decides to hold hearings on whether US companies are adhering to US import law. It could happen because a Chinese story gets so garish — last year's suicides, for example — that international press stay on the story a few cycles longer than usual. Or it could not happen at all, sure. But in that case, then we have to wonder why we have the import laws in the first place. And, indeed, why we bother telling these stories at all.

    Thanks again for the insights.

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