Apple Factory Conditions

[MacRumors]

Over the past week, a firestorm has brewed over a report in Britain's Mail on Sunday which claimed extremely harsh working conditions at iPod factories. The original story is not available online, but Arstechnica has posted a good summary of the article.

In brief, two factories were visited by Mail on Sunday reporters. The first factory was found to be forcing its staff to work 15 hour days for $50 USD per month. The second facility benefited from being in closer proximity to Shanghai, and workdays were shortened to 12 hours/day and workers were paid almost $100 USD per month. Security guards were paid up to $150 USD per month, although much of that had to be paid back to the company for housing and food. In addition to long hours, work days were said to often be accompanied by military-style drills.

Today, Apple officially responded to the allegations with a statement (repored at Playlist/MacCentral):

"We are currently investigating the allegations regarding working conditions in the iPod manufacturing plant in China," said Apple in a statement provided to Macworld. "We do not tolerate any violations of our supplier code of conduct."

Raw Data: Apple Supplier Code of Conduct (pdf)

 

[iGary]

It wil be interesting to see what comes of this.

Glad they have an agreement in place like that.

 

[mduser63]

I was impressed reading through Apple's Supplier Code of Conduct, but I sure hope they really enforce it.

 

[longofest]

Please be sure to keep the discussion civil

This story is bound to ruffle some feathers. However, please remember that the news threads are not places to vent frustration, but rather to civily discuss topics. We encourage user insight on this issue, but please keep the discussion civil, no matter what viewpoint is presented. On that note, please also refrain from issuing a dissenting viewpoint just to be a dissenter (aka troll).

 

[DavidLeblond]

Move those factories to the US! $1000 isn't too much to pay for an iPod Nano!

 

[zap2]

hope Apple can fix it, perhap add a little extra for the worker they all ready have to try and make things right.

 

[blitzkrieg79]

I guess Apple is just another greedy company, can't really blame them, all major players outsource factories to cheap labor countries. The price of an iPod wouldn't increase by that much if it was manufactured in USA, these are not some hand made custom jobs, this is a production line, couple of thousands of iPods per hour I assume. Modern world is all about greed. Companies move to cheap labor countries to generate more profit as they never decrease MSRP prices anyway. Plus it always helps that in countries such as China there is no labor laws like in USA or Western Europe so the employer can do whatever he feels like doing and taking more advantage of already low paid workers.

I had a discussion with one of the forum goers ( https://forums.macrumors.com/threads/206312/ ) and how he defended globalization and how he wrote that by US opening factories in countries such as China or India it actually helps our economy and I ask how is the $50-$100 per month salary going to help us (which I mentioned in those posts)? They can barely afford basic life necessities let alone "high end American" products. This is all just corporate greed, nothing else.

 

[jelloshotsrule]

my brother emailed steve jobs's public email address last night, with concerns about these allegations. he got a response this morning with basically the following.

"that article is bs. not true"

for what it's worth...

 

[commonpeople]

Disturbing news. I don't think I could continue to support Apple until these problems are fixed.

 

[macgeek2005]

Over the past week, a firestorm has brewed over a report in Britain's Mail on Sunday which claimed extremely harsh working conditions at iPod factories. The original story is not available online, but Arstechnica has posted a good summary of the article.

In brief, two factories were visited by Mail on Sunday reporters. The first factory was found to be forcing its staff to work 15 hour days for $50 USD per month. The second facility benefited from being in closer proximity to Shanghai, and workdays were shortened to 12 hours/day and workers were paid almost $100 USD per month. Security guards were paid up to $150 USD per month, although much of that had to be paid back to the company for housing and food. In addition to long hours, work days were said to often be accompanied by military-style drills.

Today, Apple officially responded to the allegations with a statement (repored at Playlist/MacCentral):



Raw Data: Apple Supplier Code of Conduct (pdf)

$50USD PER MONTH???? What??????? Is that what people usually get paid in china??????

 

[Kace]

my brother emailed steve jobs's public email address last night, with concerns about these allegations. he got a response this morning with basically the following.

"that article is bs. not true"

for what it's worth...

sounds interesting, but apparently apple is investigating the claim..
lets see what does come out of this

btw is it steve@mac.com ??

 

[dornoforpyros]

it'll be interesting to see how this plays out. On the hand it's very easy for a news organization to sensationalize a headline (which they often do), and "iPods made in sweatshops!" is certainly a headline.

But on the other hand Apple is a western company outsourcing it's manufacturing to China, this is how multinational corporations make their money.

This story certainly isn't good for Apple's cute and cuddly image.

 

[topgunn]

I guess Apple is just another greedy company, can't really blame them, all major players outsource factories to cheap labor countries.

I don't think greed is the right word. Publicly held corporations have an obligation to their shareholders to maximize the value of the company's stock. It is their fiduciary duty. Not finding the best labor deal on Apple's part could constitute a breach of this duty and invite lawsuit from its shareholders.

 

[adroit]

I guess Apple is just another greedy company, can't really blame them, all major players outsource factories to cheap labor countries. The price of an iPod wouldn't increase by that much if it was manufactured in USA, these are not some hand made custom jobs, this is a production line, couple of thousands of iPods per hour I assume. Modern world is all about greed. Companies move to cheap labor countries to generate more profit as they never decrease MSRP prices anyway. Plus it always helps that in countries such as China there is no labor laws like in USA or Western Europe so the employer can do whatever he feels like doing and taking more advantage of already low paid workers.

Not quite. It would be much much more expensive to assemble all the products in the US.

Electrical component assembly is very labour intensive. The machine in the production line only build major components, and pick and place machine can only be use with very very small chips and components. Most bigger components still have to be hand placed and soldered by putting it in a wave solder machine. Assembling an LCD screen into the iPods also takes a very long time, and is very easy to break. Not to mention that most of the steps still need human to monitor and there is also inspection and testing period that is very labour intensive. You would be surpirse how long it would take to just put a battery in an iPod, assemble the case, or even putting the warning stickers on.

I don't really care if the stuff are made in China or not, but I really hope that Apple would enforce all the things in the contract agreeement.

 

[TimDaddy]

Move those factories to the US! $1000 isn't too much to pay for an iPod Nano!

Toyota told its suppiers to get within 10% of China's prices or they would have to start buying parts from China. Guess what? Toyota's U.S. suppliers are selling Toyota parts within 10% of China's prices, and still making a profit. The U.S. and other developed nations where people actually make a living wage (ok, some of the U.S. makes a living wage) can compete with China. It's just easier for the greedy corporations to open up sweatshops in China.
And I don't think that every product on Earth should be "Made in the U.S.A.". I just wish more companies would follow Toyota's example and build them where they sell them. Or, build the higher priced products in higher wage countries, and build Shuffles and Nanos in lower wage countries. Even then, there is still no excuse for treating those workers like slaves. If a company can't make money without moving production to China, I'm still trying to figure out how the Ragu plant near Bowling Green, KY can pay its production workers $18.00 per hour, but still sell the product for less than $3.00 per jar.

 

[Peace]

I'm pretty sure $50-100 USD is typical for any outsourced work done in Chinese mass production factories.Probably the prevailing wage for factory workers of this sort..
Keep in mind these workers don't sit around glueing iPods together by hand.
As for the living conditions.Yes they seem pretty bad for USA standards but that just might be the way Foxconn was doing it without Apple even knowing about it since Apple contracted to them.And I say "was" because I'm sure by now stuff is starting to hit the fan due to the bad publicity..

 

[081440]

Disturbing news. I don't think I could continue to support Apple until these problems are fixed.

Are you serious?! They have not even been exposed by another party yet! and Apple probably wouldn't have known about these things!!

I bet most of you clothing was made in worse conditions than this and yet you still will buy that won't you. (not saying these conditions, of true, are excusable just that you can't just abandon a company if something goes wrong and they didn't know about it)

 

[SilentPanda]

Quick! Somebody try to get "Sweatshop" engraved on their iPod!

I'm kidding... I'm sure they'll get everything worked out if it needs to be.

 

[blitzkrieg79]

Not quite. It would be much much more expensive to assemble all the products in the US.

Electrical component assembly is very labour intensive. The machine in the production line only build major components, and pick and place machine can only be use with very very small chips and components. Most bigger components still have to be hand placed and soldered by putting it in a wave solder machine. Assembling an LCD screen into the iPods also takes a very long time, and is very easy to break. Not to mention that most of the steps still need human to monitor and there is also inspection and testing period that is very labour intensive. You would be surpirse how long it would take to just put a battery in an iPod, assemble the case, or even putting the warning stickers on.

I don't really care if the stuff are made in China or not, but I really hope that Apple would enforce all the things in the contract agreeement.

Average salary in US is around $29000 which gives you about $13.90 per hour, even if it would take an hour to assemble one iPod (which somehow I know it takes a lot less time) the final cost of the iPod would be slightly higher than it is now. So again, it's just corporate greed, look at car manufacturers especially US moving some of the plants to Mexico, not only is labor cheaper there and not only are they starting to use cheaper materials but the final cost of the cars actually is increasing.

 

[topgunn]

$50USD PER MONTH???? What??????? Is that what people usually get paid in china??????

According to this BBC News article, the average wage for a "production worker" in China is £1,214. That is about $2,200 US and about $185 a month. Apparently, according to the article mentioned in the first post, this varies based on where you are in the country. That someone could be making $50 a month doesn't seem to far off especially since it seems to include room and board.

For reference, the same position in India makes on average $150 a month.

 

[blitzkrieg79]

Toyota told its suppiers to get within 10% of China's prices or they would have to start buying parts from China. Guess what? Toyota's U.S. suppliers are selling Toyota parts within 10% of China's prices, and still making a profit. The U.S. and other developed nations where people actually make a living wage (ok, some of the U.S. makes a living wage) can compete with China. It's just easier for the greedy corporations to open up sweatshops in China.
And I don't think that every product on Earth should be "Made in the U.S.A.". I just wish more companies would follow Toyota's example and build them where they sell them. Or, build the higher priced products in higher wage countries, and build Shuffles and Nanos in lower wage countries. Even then, there is still no excuse for treating those workers like slaves. If a company can't make money without moving production to China, I'm still trying to figure out how the Ragu plant near Bowling Green, KY can pay its production workers $18.00 per hour, but still sell the product for less than $3.00 per jar.

Good post and I definately agree with you, I work in a car manufacturing business here in USA and all the parts and materials are from USA and you have no idea how much profit per each product sold my company generates, even if they would drop their prices by 100% they still would make over 100% profit per product sold, labor costs, especially in high volume manufacturing really don't account for a whole lot to the final cost of a given product.

 

[Yamson]

$50USD PER MONTH???? What??????? Is that what people usually get paid in china??????

Pretty much, yes.

Look, first of all, these aren't Apple-owned factories. As a previous post alluded, Apple outsources their manufacturing to a quality low-bidder to maximize the return on their investment -- this is sound business practice. It's pretty hard for an American corporation to keep tabs on what's going on with their contract manufacturer 8,000 miles away except for numbers on how many iPods are getting shipped out.

Second, this is the way work is in China. This isn't abnormal. East-Asian culture values hard work very much, above all else. These people WANT to work 15 hours a day and probably would work more if given the chance. And you have to realize that most of China is poor and rural -- $50 per month is the going rate for this kind of labor! And this money goes pretty far in their economy. You also have to realize that they are also getting paid in food and housing (apparently that money isn't automatically deducted for security guards, per the story). In Chinese culture, the father of the family may go off for a year to work at a factory, send home his entire $50 per month to support his wife and child, and then return home afterwards to find more work. This is what life is like there!

I'm not saying it's pleasant, but it's what people accept and live with. And, honestly, they're okay with it for the most part.

 

[blitzkrieg79]

I don't think greed is the right word. Publicly held corporations have an obligation to their shareholders to maximize the value of the company's stock. It is their fiduciary duty. Not finding the best labor deal on Apple's part could constitute a breach of this duty and invite lawsuit from its shareholders.

And don't you think that all those American corporations owe something to the average American citizen who fought for the country that America is today only to see his job disappear to a continent with whom he fought 25-30 years ago? So again, corporate greed is the right word. If Apple wants to build factories in China let them be but all those products manufactured there should be only to areas which offer comparable hourly wages. Otherwise people in western world will starting making less and people in 3rd world countries instead of $40 per month now make $50 which isn't a big improvement either, they were poor and still are poor as I suspect that cost of living even in 3rd world countries is going up.

 

[cervaro]

If the story is true, and Macs are built under similar conditions in the Far East, makes a mockery of how Apple prices their machines way above the cost of an equivalent PC, even though the Mac is far better than a PC of course.

 

[codo]

It's absolutely not acceptable for Apple to exploit people. I don’t care what the Chinese average income is - Apple is making billions of dollars of profit, some of this should be passed on to the people that make their products. Its good ethics.

I'm glad this is in the spotlight because it puts pressure on Apple.