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Apple Suspends Business With iPhone Supplier Pegatron for Labor Violations

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Apple has suspended its partnership with Pegatron after it discovered that the major iPhone supplier was committing labor violations at a student workers' program.

pegatron_logo.jpg

Bloomberg reports that several weeks ago Apple found Pegatron had been falsifying paperwork to cover up the violations of Apple's code of conduct for suppliers. Specifically, the Taiwanese manufacturer had misclassified student workers, which allowed some to work nights and overtime. Employees reportedly then "went to extraordinary lengths" to cover up the violations.
"Pegatron misclassified the student workers in their program and falsified paperwork to disguise violations of our Code, including allowing students to work nights and/or overtime and in some cases to perform work unrelated to their major," Apple said in a statement to Bloomberg. "The individuals at Pegatron responsible for the violations went to extraordinary lengths to evade our oversight mechanisms."
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Pegatron said the violations took place at its Shanghai and Kunshan campuses in eastern China and that students working night shifts, over-time, and in positions unrelated to their majors were "not in compliance with local rules and regulations." Pegatron has since fired the manager who oversaw the student worker program.
"Upon discovery of this non-compliant activity, we immediately took the student workers off production lines and worked with our customer and third-party experts to make appropriate arrangements for them to return to their homes or schools with proper compensation alongside all necessary support and care," Pegatron said in a statement.
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Apple has put Pegatron on probation as a result of the violations, and while supplier's current iPhone business is not expected to be affected, it could lose some iPhone 12 orders to Luxshare next year.

This isn't the first time Pegatron has been accused of worker abuse. A 2013 report by China Labor Watch found evidence of unpaid overtime and underpayment of student workers at Pegatron's Shanghai assembly plant. Other companies in Apple's Chinese-based production chain including Foxconn and Catcher Technology have also flouted local regulations in the past, forcing Apple to tighten standards and audit the companies that manufacture components for its devices.

Note: Due to the political or social nature of the discussion regarding this topic, the discussion thread is located in our Political News forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Article Link: Apple Suspends Business With iPhone Supplier Pegatron for Labor Violations
 
Article Link
https://www.macrumors.com/2020/11/09/apple-suspends-pegatron-labor-violations/
And when they say; ‘...has since fired the manager who oversaw the student worker program.’ You know they really have fired them.
 
yurc said:
Foxconn are caught up back then, Quanta is also same at 2014, now Pegatron. I guess manufacturing industries are prone of worker abuse...
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Work ethics is hard, for all types of businesses and positions. But usually things rot from the head down. Although I have high regards for Taiwanese and Japanese people, their corporate cultures do not usually reflect exemplary management. (I mentioned Japan since Taiwan tends to copy the Japanese style in management).
 
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It is crazy how we perceive Apple as a premium brand, but they are really products being manufactured by cheap Chinese labor.

I love my iPhone 12 Pro, but stories like these make me feel gross about supporting a company like Apple. It is time to invest in the country that made them rich, or get out.
 
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rjp1 said:
It is crazy how we perceive Apple as a premium brand, but they are really products being manufactured by cheap Chinese labor.

I love my iPhone 12 Pro, but stories like these make me feel gross about supporting a company like Apple. It is time to invest in the country that made them rich, or get out.
Click to expand...
Wait, isn't this actually a good thing for Apple since they actually put efforts to curtail naughty suppliers? Pegatron made a ton of other stuff, including laptops and components, yet we don't see other brands (I'm looking at you Asus) putting the same scrutiny as Apple.
 
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spyguy10709 said:
I don't see how



translates into
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It's clearer in the article. Apple is suspending "new business" with Pegatron until its clear the violations were addressed.

What happened?

"Pegatron said the violations took place at its Shanghai and Kunshan campuses in eastern China and that students working night shifts, over-time, and in positions unrelated to their majors were 'not in compliance with local rules and regulations.'"

Importantly, "Apple said it didn’t find evidence of forced or underage labor in Pegatron’s case, but discovered the supplier falsified paperwork to hide violations. Pegatron has fired the manager who oversaw the student worker program, it added." (emphasis added).

What it sounds like is students wanted to work more than they were allowed to or wanted to work overnight so they could attend school during the day (or something like that). A manager helped them do this and falsified the paperwork. This means the issue was localized and not widespread throughout Pegatron (otherwise the probation would have been more comprehensive). It was also addressed (hopefully for good) and Pegatron is at risk of not getting as many future orders from Apple until they demonstrate the violations are no longer occurring. These were not forced or other slave labor issues, these were students working in shifts they were not supposed to work in.
 
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rjp1 said:
It is crazy how we perceive Apple as a premium brand, but they are really products being manufactured by cheap Chinese labor.

I love my iPhone 12 Pro, but stories like these make me feel gross about supporting a company like Apple. It is time to invest in the country that made them rich, or get out.
Click to expand...
apple would gladly sell you a $1.5k entry level iPhone
 
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rjp1 said:
It is crazy how we perceive Apple as a premium brand, but they are really products being manufactured by cheap Chinese labor.

I love my iPhone 12 Pro, but stories like these make me feel gross about supporting a company like Apple. It is time to invest in the country that made them rich, or get out.
Click to expand...

Maybe you should instead purchase your tech products from companies not using Chinese suppliers and contract manufacturing? Or companies looking the other way when labor violations are discovered with their suppliers/contract manufacturers? And then you wouldn't need to feel gross.

Hat-tip to Apple and Mr. Cook for not looking the other way and instead taking action. I suspect many tech companies simply look the other way out of convenience.
 
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roxygal9 said:
Shocker, China abusing their workers 🤷‍♀️
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That's not what it looks like. It looks like the students wanted to work more hours or different hours than they were allowed to and a manager helped them do it and falsified paperwork: "Apple said it didn’t find evidence of forced or underage labor in Pegatron’s case".

There are plenty of worker abuses (and forced labor) in China [not to mention this is Taiwan] but this doesn't appear to be one of those cases.
 
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neuropsychguy said:
It's clearer in the article. Apple is suspending "new business" with Pegatron until its clear the violations were addressed.
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I don't think the article is clearer.

it could lose some iPhone 12 orders to Luxshare next year.
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could lose some orders. Doesn't sounds remotely like suspending to me, doesn't even mention not accepting new business. Perhaps that's discussed in the source material and MacRumors just haven't brought the detail over?
 
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Wonder how Apple "found" these violations? Why they told Bloomberg directly and how was the "manager" allowed to have this happen without any other oversight?
 
Not that this is an excuse for Pegatron, but I wonder how razor thin those margins are for Pegatron and other Apple suppliers.

Oh wait, we don't have to wonder:

www.theinformation.com

Inside Apple’s Eroding Partnership With Foxconn

When Apple’s 2018 iPad Pro was undergoing production trials at the company’s largest outside manufacturer, Foxconn Technology, the Taiwanese firm gave Apple a list of how many workers it needed to develop the new product. That was standard procedure for Foxconn, whose factories across China have ...
www.theinformation.com www.theinformation.com
 
EugW said:
Not that this is an excuse for Pegatron, but I wonder how razor thin those margins are for Pegatron and other Apple suppliers.

Oh wait, we don't have to wonder:

www.theinformation.com

Inside Apple’s Eroding Partnership With Foxconn

When Apple’s 2018 iPad Pro was undergoing production trials at the company’s largest outside manufacturer, Foxconn Technology, the Taiwanese firm gave Apple a list of how many workers it needed to develop the new product. That was standard procedure for Foxconn, whose factories across China have ...
www.theinformation.com www.theinformation.com
Click to expand...
Why link a paywall article?
 
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yurc said:
Foxconn are caught up back then, Quanta is also same at 2014, now Pegatron. I guess manufacturing industries are prone of worker abuse...
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Always has and always will be.

The meticulous way in how components are assembled in the iPhone since iPhone 4S I think it's time for Apple to start full automation of assembly. Have workers learn coding skills for CNC etc and design better industrial products to meet current and future demands.

Without a major change, this industry will not change its forms of abuse.
 
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