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Original poster
Apr 12, 2001
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Reuters reports on comments from Foxconn chief Terry Gou, who claims that Apple and Foxconn will be splitting the initial costs to improve working conditions at Foxconn's facilities in China.
"We've discovered that this (improving factory conditions) is not a cost. It is a competitive strength," Gou told reporters on Thursday after the ground-breaking ceremony for a new China headquarters in Shanghai.

"I believe Apple sees this as a competitive strength along with us, and so we will split the initial costs."

It was unclear if the split would be 50/50 or in some other ratio.
ipad_assembly_foxconn-500x278.jpg



Foxconn workers assembling iPads (Source: Rob Schmitz/Marketplace)
Foxconn has raised wages several times over the past couple of years as it has faced scrutiny over the treatment of its employees. And following a series of audits, Foxconn and the Fair Labor Association reached an agreement in late March to reduce overtime while boosting compensation packages to compensate for the reduction in hours.

It is unclear how much the actions are costing Apple and Foxconn and how the costs are being split, but with Foxconn operating on a very slim profit margin it has limited ability to finance such improvements without raising costs for its customers or receiving direct support from Apple to assist with the changes.

Article Link: Apple to Contribute Toward Costs of Improving Working Conditions at Foxconn Facilities
 

kavika411

macrumors 6502a
Jan 8, 2006
617
3
Alabama
Non-rhetorical question: Why does Apple not just buy Foxconn? Apple could buy Foxconn, strengthen its supply chain, stop paying the Foxconn profit margin, and prevent Foxconn from being a manufacturer for rivals. Maybe I'm overlooking something obvious.
 

SeattleMoose

macrumors 68000
Jul 17, 2009
1,960
1,669
Der Wald
With Steve Gone...

Apple seems to have grown more of a "heart".

Whether or not this is true....it at least appears that way.
 

Small White Car

macrumors G4
Aug 29, 2006
10,934
1,263
Washington DC
Non-rhetorical question: Why does Apple not just buy Foxconn? Apple could buy Foxconn, strengthen its supply chain, stop paying the Foxconn profit margin, and prevent Foxconn from being a manufacturer for rivals. Maybe I'm overlooking something obvious.

Foxconn is huge and has many other clients.

It would be like someone buying the entire McDonalds corporation just to make and sell the french fries.
 

rei101

macrumors 6502a
Dec 24, 2011
976
1
Non-rhetorical question: Why does Apple not just buy Foxconn? Apple could buy Foxconn, strengthen its supply chain, stop paying the Foxconn profit margin, and prevent Foxconn from being a manufacturer for rivals. Maybe I'm overlooking something obvious.

Probably their price is so low because they have other income other than Apple. And be sure... Apple wont like to buy that sort of foreign labor.
 

gregwyattjr

macrumors regular
Oct 17, 2008
198
1
I still don't understand why people are spitting venom at Apple in regards to their factories when there are other factories far far worse.
 

whooleytoo

macrumors 604
Aug 2, 2002
6,599
695
Cork, Ireland.
Nice touch, considering Apple didn't HAVE to do this.

Seems like Apple's influence (even if it is being 'forced' by negative press) is having a positive effect on the local workforce & working conditions. I guess that shows the real benefit of being there; rather than avoiding countries with - to Western viewers - negative, oppressive work practices.
 

Rocketman

macrumors 603
I wonder how the media and the public would respond to a $50 price increase on iPads and iPhones to cover higher commodity, labor, and labor workplace safety costs?

This, given China labor rates are increasing at 15% per year and commodities (in Dollar terms) are increasing in cost at 7% per year, and Apple is co-investing in factory capital costs to improve workplace safety and reduce overtime.

It would be interesting to see of those constituencies, media and public who so often ask companies to do exactly these things, will also be willing to take on, and publicly support, the actual costs of those endeavors.

Rocketman

Q: Why doesn't Apple just buy Foxconn?
A: China does not allow foreign companies to own more than 33% of companies. That is increasing to 49% this year.
A: Apple share holders require a certain operating margin. Foxconn has a much lower operating margin than Apple and its acquisition would tank Apple stock.

Q: Why venom at Apple when so many other factories are far, far worse.
A: By proactively working to improve worker conditions in a country where that is a cultural abnormality, it gets the attention of the media. Once focused on, the media being simple folk, compare the conditions against some local observations they have at their workplace, or some fictional hopeful future workplace, rather than the alternative real people have in their real lives, because it is very disturbing to see. The media generally does a poor job of reporting business stories in the language and standards of business itself. Simply compare MSNBC and CNBC for hard evidence. One might think reporters and especially commentators have no business training or experience. :)
 
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Takeo

macrumors 6502a
Nov 10, 2004
696
283
Canada
I still don't understand why people are spitting venom at Apple in regards to their factories when there are other factories far far worse.

Because they are one of the biggest brands in the world. Same deal with Nike. Everyone makes shoes with cheap chinese labour... everyone aside from maybe a handful of obscure artisans... but Nike is the one that everyone complains about. It's a big target.
 

blow45

macrumors 68000
Jan 18, 2011
1,576
0
Because they are one of the biggest brands in the world. Same deal with Nike. Everyone makes shoes with cheap chinese labour... everyone aside from maybe a handful of obscure artisans... but Nike is the one that everyone complains about. It's a big target.

yeah it's the target that's big not the sweatshops that are inhuman...:rolleyes:
 

Small White Car

macrumors G4
Aug 29, 2006
10,934
1,263
Washington DC
Because they are one of the biggest brands in the world. Same deal with Nike.

Uhm, not really. Nike actually DID have big problems. Stuff like children working 16 hour days without days off. That's nothing at all like what goes on at Foxconn.

Nike really did deserve the criticism they got.
 

Abazigal

Contributor
Jul 18, 2011
14,835
14,028
Singapore
Non-rhetorical question: Why does Apple not just buy Foxconn? Apple could buy Foxconn, strengthen its supply chain, stop paying the Foxconn profit margin, and prevent Foxconn from being a manufacturer for rivals. Maybe I'm overlooking something obvious.

They probably don't want to have to deal with the hassle of having to manage all those employees. Better to just spend a little extra and pay someone else better suited to do this.

Plus, if one day, China does end up being too expensive, they can easily shift to a cheaper country without worry about how to divest itself of its investment, or face the backlash of suddenly laying off a million workers. :p

They likely feel any savings is just not worth it.
 

fernan

macrumors newbie
Apr 30, 2012
16
0
Sweden
Foxconn?

No , dont buy foxconn .

Apple is the best company , cares about their customers.
Best design, expensive but it's high quality.

Haters out there are just jelous.

There are thousands of companies that treats the employees 100 times worse.

Working for foxconn is not so bad. The thing is that they choose to work overtime.

Whats the prob about that?
 

kavika411

macrumors 6502a
Jan 8, 2006
617
3
Alabama
They probably don't want to have to deal with the hassle of having to manage all those employees. Better to just spend a little extra and pay someone else better suited to do this.

Plus, if one day, China does end up being too expensive, they can easily shift to a cheaper country without worry about how to divest itself of its investment, or face the backlash of suddenly laying off a million workers. :p

They likely feel any savings is just not worth it.

Excellent points. Hadn't considered those.
 

linuxcooldude

macrumors 68020
Mar 1, 2010
2,480
7,232
Working for foxconn is not so bad. The thing is that they choose to work overtime.

A lot of workers are complaining about less working hours. Many want the overtime, means more money for them.
 

ardy8888

macrumors newbie
Mar 3, 2011
27
0
I still don't understand why people are spitting venom at Apple in regards to their factories when there are other factories far far worse.

Why should that have any influence on this topic. Just because there are worse factories out there, does that mean that everyone else should get a pass until the worst ones are fixed?
 
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