brand challenges

Foxconn Takes a Big Bite Out of Apple Reputation

Posted by Sheila Shayon on January 23, 2012 01:39 PM

Charles Duhigg and Keith Bradsher’s comprehensive article in Sunday's New York Times is a tour de force on Apple, the expediency of business and a fundamental shift from American shores to global manufacture.

Why does Apple now outsource production of iPhones and iPads to China? Bottom line, Chinese factories are more nimble, way cheaper, and treat employees in ways unimaginable and illegal in the US or Western Europe — even if they ultimately produce vastly more product, more quickly. 

“It isn’t just that workers are cheaper abroad. Rather, Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that 'Made in the U.S.A.' is no longer a viable option for most Apple products,” says the Times

Apple’s relationship with the now controversial company Foxconn began in 2007, one month prior to Apple’s first iPhone release, when Steve Jobs complained of scratches on the prototype he’d been carrying in his pocket and demanded a new iPhone screen, demanding "I want it perfect in six weeks.”

When consensus was reached that this could only be accomplished in China, Jobs flew to Shenzhen, and in 15 days, Foxconn hired 8,700 mid-level engineers to meet his timetable, a task it would have taken US factories 9 months to accomplish. 

Today, Gizmodo notes, Foxconn employs a staggering “one million employees at their mega-factories/city/ghettos, where they manufacture 40 percent of the gadgets people have in the world, including iPhones, iPads, Xboxes and Sony whatevers.”

Foxconn Technology has factories in Asia, Eastern Europe, Mexico and Brazil, and assembling electronics for Amazon, Dell, Hewlett-Packard, Motorola, Nintendo, Nokia, Samsung and Sony. 

As we noted in 2010, “allegations that Foxconn, headquartered in China with production in southern China, is a tech sweatshop and a human rights flouter, are having such an effect on Apple's brand that CEO Steve Jobs was forced to address the situation at last week's D8 conference in Silicon Valley.”

Following pressure by China Labor Watch and other labor and human rights watchdogs, Foxconn was forced by the court of public opinion to resolve a pay dispute that prompted 300 workers to threaten mass suicide.

Foxconn president and chairman Terry Gou reportedly stated: “Working at Foxconn is a great honor, we make gadgets the entire world adores. For those 300 workers to slap us, and China, in the face like that was unforgivable. Instead of caving in to those pigs, we lead them into a special room down in the basement. Then, we presented them with some tools and some coaxing. A few cowards took the easy way out via cyanide, others had a little bit more fun. We had metal tubs full of battery acid, a Russian roulette booth where the 6 shooter had 6 bullets, there was a long line for the tree mulching machine, and it seemed some really enjoyed the drowning tank. In a few hours the dispute was over, factory back to work.” Gou's comments were taken out of context, according to Foxconn.

“Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice,” said Betsey Stevenson, the former chief economist at the Labor Department, to the New York Times. “That’s disappeared. Profits and efficiency have trumped generosity.” 

With 43,000 US employees, 20,000 overseas and 700,000 additional contractors working for foreign companies in Asia, Europe and elsewhere, “Apple’s an example of why it’s so hard to create middle-class jobs in the U.S. now,” aded Jared Bernstein, former economic adviser to the White House. “If it’s the pinnacle of capitalism, we should be worried.” 

Has the iconic brand embraced and used by millions of Americans and global citizens become the model for a future where humanity is outweighed by profit and technological exigency trumps compassionate business practices? 

[Image at top via Change.org's Apple/Foxconn petition]

Comments

MONICA BALMELLI United States says:

Hi,
I just want to thank you for the link to the petition. We still need much more signatures.
Thank you very much,
Monica

January 23, 2012 07:17 PM #

Comments are closed

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