“As workers in the U.S. and elsewhere commanded ever higher wages, manufacturers shifted operations elsewhere, including such places as Mexico and Japan, and later Taiwan and China. Many companies, Apple among them, get outside companies to handle the manufacturing entirely, often in places where labor costs are low and workplace regulations differ from those in the U.S. and Europe,” Arik Hesseldahl reports for BusinessWeek.
Hesseldahl reports, “Given this economic backdrop, I wasn’t terribly surprised to read allegations in the British newspaper The Mail on June 25 that Apple Computer’s iPod portable media players are made in what the paper portrayed as sweatshop conditions.”
“The plant in question is operated in Longhua, China by an outfit called Foxconn, the trade name given to Hon Hai Precision Industry. Known as a contract electronics manufacturer—a company whose sole purpose is to manufacture products for other companies—Hon Hai is by all accounts successful. It turned a $1.2 billion profit on $28.4 billion in sales in 2005,” Hesseldahl reports.
Hesseldahl reports, “Apple, clearly wanting to avoid unpleasant appearances, has sent a team to investigate. Some reports have suggested the investigation is complete, but as of June 28, it was not. ‘We are still investigating the working conditions at Foxconn’s manufacturing plant in Longhua,’ says Apple spokesman Steve Dowling. ‘This is a thorough audit, which includes employee working and living conditions, interviews of employees and managers, compliance with overtime and wage regulations, and other areas as necessary to insure adherence to Apple’s supplier code of conduct. Apple’s supplier code of conduct sets the bar higher than accepted industry standards and we take allegations of noncompliance very seriously.'”
“Clearly, much about this situation is not yet known, and Apple is to be commended for springing into action when the allegations surfaced. Steve Jobs is a socially conscious person, and he associates with people of the same ilk,” Hesseldahl reports.
Hessledahl asks, “Rather than hire a Chinese company to build iPods, why couldn’t Apple build them in China in its own factory?”
Full article here.
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Related articles:
iPod maker admits breaking Chinese labor laws; says Apple approved sweatshop labor – June 26, 2006
Apple begins ‘thorough audit’ of Foxconn iPod factory – June 20, 2006
Apple iPod manufacturer Foxconn sternly denies iPod sweatshop claims – June 19, 2006
Apple iPod ‘sweatshop’ story a ‘poorly researched sensationalist article’ – June 19, 2006
Apple rebuts Chinese iPod factory claims – June 13, 2006
iPods made in Chinese sweatshops? – June 13, 2006
I would imagine that the time and effort it would take to plan and build your own factory from scratch (along with tooling up, recruitment, and general operations) would be a major league distraction to a company that is just trying to feed the MP3 player market as quickly as possible.
Apple is doing the right thing by closely scrutinising its sub contractors but it needs to be careful of these guys trying to pull a fast one i.e. just how thorough can a ‘thorough audit’ be when they know you’re coming and have time to create an appearance?
Many countries, and I would expect China to be in this group, have restrictive, protectionist laws as to who can “own” property or employ people within their borders – among other things. Some foreign activities are banned outright while others are simply made difficult. Sometimes this is governmental policy, sometimes not. Unions, or their like, are known to take advantage of outsiders.
China, as a country, gained $1.2B in profit in 2005 – plus the wages paid to the workers, and the shippers, etc. Apple builds their own plant, hires their own workers,
– they will need to hire more workers just to comply with the law
– they will have to pay a higher wage to each worker
– they can expect to pay more for shipping
– they can expect higher ‘internal losses’
The cost of iPods jumps, several influential locals have a lot less money to pass around to party officials, a few thousand impoverished locals discover the concept of “disposable income” – and taxation – and nobody is particularly happy.
People this is all wrong.
When Al Gore is finished saving the world from all us SUV’s owners, Al needs to rush home and help setup a iPod factory some where around University of Stanford for the legal people of California. This may raise the cost of a iPod but will save on all the fuel that is burned by flying iPods from China to the U.S. via Alaska. Also think of the people in China that can get back to growing rice.
Come on Al we need you!
WMD
Yeah yeah.
Apple building its own factory in China will make a difference. What are they going to staff it with, white American children? Gotta be little white children because if it ain’t, even rich white leftists won’t really care that much.
Then they can have “It’s A Small Word” playing all day while the children dance in the halls with their synchronized heads tilting back and forth.
Give me a break.
Build a factory where the labor is the BEST, not the cheapest and maybe some of these quality control issues might subside.
Why? Those chinese kids are doing a great job!
Unions have priced their members out of the job market.
Don’t worry, they’ll wake up before all the manufacturing jobs have gone offshore.
Maybe, maybe not.
No, on second thought, they won’t. No strike has ever recovered the wages lost during the strike. They never seem to learn from repeated lessons. They keep making the same mistakes expecting different results.
We all know what that is a sign off.
Apple needn’t build its own factory. There are a handful of companies worldwide – the so-called contract manufacturers – that do this for a living, and they probably have a better record where labor and environmental standards are concerned. Among these are Solectron, Celestica, Flextronics International, SCI Systems, Jabil Circuit, and Sanmina. You may not know the names, but the majors (HP, Dell, IBM, Sun) certainly do, as these OEMs do more of their manufacturing than most realize.
What’s distressing is that even though labor accounts for less than 10% of the cost of these goods, there’s an ongoing, competitive race to migrate manufacturing to someplace a shade cheaper. It’s disruptive, and affects not only the time to market, but quality control as well.
On this day before America’s Independence Day, we should also ask if we should be encouraging the transfer of technology and manufacturing skills to a non-democratic country that remains a strategic rival.
Outsourcing has other reasons than unions pricing members out of the job market. It is about saving costs so profits stay up. If there are countries with even lower wages thank China, production will move to these countries, even though unions are illegal in most of the current sweatshop-states. Money allways looks for the lowest point.
And the age-old argument of “wages are lower in China, they are used to working more hours”…That may be true, but it’s a global economy. So iPods in Asia are about as expensive as here. Funny, that you have to save up 6 months of wages to buy the stuff you manufacture yourself. How about a little solidarity. I’d gladly pay more if I was guaranteed workers would get normal treatment. Hell, Apple could be very generous and take 1 dollar off it’s profit of every iPod and these workers would have a normal wage.
In time, people worldwide will have to compete with each other just to survive, fighting over jobs, while being at the mercy of corporations that manufacture their homes, means of production and their food (genetic modified seeds, anyone?) It will take maybe 10-20 years, but this is the direction the economy is taking. Call me an idealist or a commie, but this is just wrong. And the strange thing is that this system is set up by both the Communist and the Capitalist countries together.
phew! glad i got that off my chest
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Apple should build a factory in the U.S. or Mexico.
Screw Mexico.
All the U.S. does is find ways to give that useless country money.
California is nothing but an organized welfare program for Mexico.
We don’t need anything more to do with Mexico.
Apple should build iPods in the USA. There are plenty of impoverished states/cities of the USA that would jump on the chance to give local workers another option besides joining the military.
hourly wages are cheap in China, but iPods don’t take long to build on an assembly line. I’ll bet each one takes no more than 30 minutes of labor, which would be about $4 per iPod to have an American do the work.
Those Ipods maybe built with subhuman third world wages, but when those Ipods show up in the first world the price is a first world price. For the price of 40 workers here in America you can hire 600 workers in China, NO AMOUNT KISSING UP TO MANAGEMENT HERE IS GOING CHANGE THAT DIFFERENCE IN WAGES!
I agree–“Unions have priced their members out of the job market.”
CAR ASSEMBLY LINE DRONES, thanks to the UAW make as much yearly as many with a college degree. Thanks to the UAW, wages don’t reflect a skill level anymore. Any job that’s learned in roughly a day should not pay $30,000 a year or more.
These and other low level jobs with wages dictated by the UAW is how USA has priced itself out of the manufacturing sector, and lost jobs for the sector of the population it sought to benefit. Now the main job options for these uneducated, former typical factory workers, are Big Box or mall store jobs.
I’m not anti union. Many unions are legitimage: I don’t mind the higher wages set by unions of plumbers, electricians and other skilled labor trades because what they do takes years to learn to do safely and properly. Again it’s skill level.
However, someone screwing in the same 2 bolts all day on an assembly line does not deserve high wages. They should start at minimum wage. This has become America’s problem. I know, I once WAS a low wage assembly line factory worker (not UAW run). It inspired me to seek an education.
why does this site look like a micrasoft site?
sorry for the spelling errors & type-os in my previous post, was typing too fast with many interruptions! No after post edit capabilities on this “forum.”