Former Apple Executives Address Working Conditions in Suppliers' Factories

[Kaibelf]

It is obvious that many of the posters here are not business people or economists. Riddle me this. How does Apple moving operations to the US help Foxconn employees? It doesn't. In fact it would devastate their economy and force thousands back into the fields to earn enough to make a living. The same goes for robotics. How does an automated factory help workers? By giving them unlimited free time to pursue intellectual interests?

Fact: China has a population problem and a labor over-supply. The labor rate is set by the labor supply and the cost of living among other things. Foxconn employees are paid a fair rate based on how many people want those jobs the skills required and what goods cost in that area. People who say foreign companies should pay higher wages are clueless about how economies work.

Imagine a foreign company came to your home town and set-up a business that virtually everyone in your city was capable of doing. They then offered thousands of jobs that pay one million dollars a year. What do you think would happen? People would be literally killing each other to get these jobs. And what would happen to the price of goods in your town? With thousands of millionaires inflation would sky-rocket and soon anyone who didn't work for this company would be priced out of being able to survive.

Sound unrealistic? Well it happened with maquiladoras across the border in Mexico. Dealing with operations in foreign countries is a very complex and problematic situation and one that I would venture to say no one here is likely to have the experience or understanding to appreciate.

Certainly, Apple should be (and is) working to keep from having vulnerable populations (like children) exploited, but paying willing workers the going rate for their economy is actually the responsible thing to do.

I'm sorry but the childish view of "Apple has a bunch of money and so they should save the world" simply shows that you have a limited conceptual ability to understand the complexities of economies, capital markets and strategic planning. And I would venture to say that the people here complaining that Apple should do something are the same people that buy stuff from Walmart and quickly switch the channel when a "Save the Children" ad comes on TV. Anyone here has the means to literally save dozens of lives every month. Are you doing that?

This is THE best post I've ever read on this or any other tech site, period.

 

[Rodimus Prime]

Dell, HP, Samsung, etc. have plenty of money and power to do the same. This isn't Apple's fault nor their responsibility.

Foxconn's major customers:

Acer Inc. (Taiwan)
Amazon.com (United States)
Amazon (United States)
ASRock (Taiwan)
Asus (Taiwan)
Barnes & Noble (United States)
Cisco (United States)
Dell (United States)
EVGA Corporation (United States)
Hewlett-Packard (United States)
Intel (United States)
IBM (United States)
Lenovo (China)
Logitech (Switzerland)
Microsoft (United States)
MSI (Taiwan)
Motorola (United States)
Netgear (United States)
Nintendo (Japan)
Nokia (Finland)
Panasonic (Japan)
Philips (Netherlands)
Samsung (South Korea)
Sharp (Japan)
Sony Ericsson (Japan/Sweden)
Toshiba (Japan)
Vizio (United States)

Where do you see the press mentioning Toshiba, Sharp, Panasonic, Microsoft?

Apple is in the spotlight, so they get all the heat. You want a story to FLY?? Just write "Apple" into the headline.

Turning this into an Apple problem as opposed to an international human rights problem is SLANDER. Period. But hey, I'm sure Apple's cool with taking the hits on behalf of the rest of the industry, right?

And of that list which company has the most power to do something. Oh wait it is Apple by a very healthy margin.

MS while it would be nice they have lot less power to do anything because look at what they manufacture. They have their keyboards and 360 stuff but that is chump change compared to just the iPhone manufacturing of Apple much less everything else.

Apple is by far the most powerful company on that list in effecting any real change.
So rightfully so Apple should be getting the most heat. The other should get some but Apple by far should be getting the lions share.

 

[*LTD*]

This is THE best post I've ever read on this or any other tech site, period.

Already saved to Evernote for future reference.

 

[toddybody]

No. They don't. Apple doesn't have the "money and power" to do anything about Chinese labour, in China, that is under the mandate of the Chinese government.

Apple can pull out of China, of course. And there goes the neighbourhood.

Right, but Apple wouldnt be saying "China, change your labor laws else we wont play here".

What they could do is say "FOXCON, up YOUR standards or were moving"

It's like a private company in the US telling its partners that it wont do business with anyone who pays their people minimum wage. Its legal, but the powerful company has the clout to "motivate".

Peace by with ya!

 

[uknowimright]

hahahaha I like how now LTD is saying Apple isn't that powerful

 

[samcraig]

Foxconn's major customers:

Acer Inc. (Taiwan)
Amazon.com (United States)
Amazon (United States)
ASRock (Taiwan)
Asus (Taiwan)
Barnes & Noble (United States)
Cisco (United States)
Dell (United States)
EVGA Corporation (United States)
Hewlett-Packard (United States)
Intel (United States)
IBM (United States)
Lenovo (China)
Logitech (Switzerland)
Microsoft (United States)
MSI (Taiwan)
Motorola (United States)
Netgear (United States)
Nintendo (Japan)
Nokia (Finland)
Panasonic (Japan)
Philips (Netherlands)
Samsung (South Korea)
Sharp (Japan)
Sony Ericsson (Japan/Sweden)
Toshiba (Japan)
Vizio (United States)

Where do you see the press mentioning Toshiba, Sharp, Panasonic, Microsoft?

Apple is in the spotlight, so they get all the heat. You want a story to FLY?? Just write "Apple" into the headline.

Turning this into an Apple problem as opposed to an international human rights problem is SLANDER. Period. But hey, I'm sure Apple's cool with taking the hits on behalf of the rest of the industry, right?

I see you didn't read the article. If you had - you'd note that they do mention some of the companies above. Not a lot - but a few.

Turning this into an Apple problem is the furthest thing from Slander. Do you know what Slander is?

P.S. You can't have it both ways LTD - you can't say Apple can do anything they put their minds to and they are always innovating, etc and then say they "can't" do anything about this. You know they can. You know they don't (enough apparently). I agree it's not solely Apple's problem. It's everyone's problem. As a human being. From the person choosing to buy products that come from such working conditions to the big corporations who employ them to the governments of countries where these conditions continue and/or allowed.

No - Apple isn't the only company. But seeing as they are one of the largest if not largest companies in the US (a fact you love to tout) means they have a better chance of making change than any other by doing something.

 

[Kaibelf]

Who is to say investors wont be happy if they move operations to the USA? Apple can either take a hit on their 40% profit margins or raise prices to maintain their profit margins.

I assume they would do the latter, but then people would also raise an eyebrow! I for one, would pay 10% more for apple product built in the USA.

That's fine, pay as much as you want, but keep your damned hands off MY wallet and don't volunteer ME into paying higher prices just because YOU have a naive view of the world.

 

[dgree03]

It is obvious that many of the posters here are not business people or economists. Riddle me this. How does Apple moving operations to the US help Foxconn employees? It doesn't. In fact it would devastate their economy and force thousands back into the fields to earn enough to make a living. The same goes for robotics. How does an automated factory help workers? By giving them unlimited free time to pursue intellectual interests?

Fact: China has a population problem and a labor over-supply. The labor rate is set by the labor supply and the cost of living among other things. Foxconn employees are paid a fair rate based on how many people want those jobs the skills required and what goods cost in that area. People who say foreign companies should pay higher wages are clueless about how economies work.

Imagine a foreign company came to your home town and set-up a business that virtually everyone in your city was capable of doing. They then offered thousands of jobs that pay one million dollars a year. What do you think would happen? People would be literally killing each other to get these jobs. And what would happen to the price of goods in your town? With thousands of millionaires inflation would sky-rocket and soon anyone who didn't work for this company would be priced out of being able to survive.

Sound unrealistic? Well it happened with maquiladoras across the border in Mexico. Dealing with operations in foreign countries is a very complex and problematic situation and one that I would venture to say no one here is likely to have the experience or understanding to appreciate.

Certainly, Apple should be (and is) working to keep from having vulnerable populations (like children) exploited, but paying willing workers the going rate for their economy is actually the responsible thing to do.

I'm sorry but the childish view of "Apple has a bunch of money and so they should save the world" simply shows that you have a limited conceptual ability to understand the complexities of economies, capital markets and strategic planning. And I would venture to say that the people here complaining that Apple should do something are the same people that buy stuff from Walmart and quickly switch the channel when a "Save the Children" ad comes on TV. Anyone here has the means to literally save dozens of lives every month. Are you doing that?

If apple left, someone else would fill it. Come on, you act as if Foxconn would just shut down! You are trying to act like apple cares that a million people in china would lose jobs? According to some people in this thread, apple should only care about its bottom line.

If apple threatened to move out of China, if China cared that the jobs they provided are important enough, they would change there ways, period.

If China said, ok bye bye, then that just tell us and everyone else what CHINA thinks about its people(Even more so than we already know).

 

[samcraig]

The NYT should be ashamed of themselves for this hit-whoring piece of yellow journalism. ...... I'm surpised by the general reaction I'm reading here - another sign of our declining educations system. People need to question authority, and these days, so-called journalism, scarce examples of which exist anywhere, especially in the Delusional States of America.

dmz

I agree. We should question authority. Just as you suggest - we should question the media. We should ALSO question Apple and other organizations. Right? Or do you mean we should only question the media?

 

[*LTD*]

I see you didn't read the article. If you had - you'd note that they do mention some of the companies above. Not a lot - but a few.

Turning this into an Apple problem is the furthest thing from Slander. Do you know what Slander is?

P.S. You can't have it both ways LTD - you can't say Apple can do anything they put their minds to and they are always innovating, etc and then say they "can't" do anything about this. You know they can. You know they don't (enough apparently). I agree it's not solely Apple's problem. It's everyone's problem. As a human being. From the person choosing to buy products that come from such working conditions to the big corporations who employ them to the governments of countries where these conditions continue and/or allowed.

No - Apple isn't the only company. But seeing as they are one of the largest if not largest companies in the US (a fact you love to tout) means they have a better chance of making change than any other by doing something.

hahahaha I like how now LTD is saying Apple isn't that powerful

Tech innovation vs. international sociocultural (and possibly political) change.

One is nothing like the other.

 

[wonderspark]

Yeah, they can try to tell China how to run their country, and China can tell them to go to he**, and then welcome Samsung with open arms.

It's not about telling China anything. It's about moving the production elsewhere. Let Samsung have it. If Apple's products are truly superior, they will still sell at a higher price. What was the estimation, $65 more? Isn't that worth it?

 

[samcraig]

That's fine, pay as much as you want, but keep your damned hands off MY wallet and don't volunteer ME into paying higher prices just because YOU have a naive view of the world.

Apple, with it's tremendous profits could still keep prices the same and pay out more. Would they accumulate wealth as fast? No. But at the same time - they would be actually living their rhetoric about fair treatment, working conditions, etc.

If apple left, someone else would fill it. Come on, you act as if Foxconn would just shut down! You are trying to act like apple cares that a million people in china would lose jobs? According to some people in this thread, apple should only care about its bottom line.

If apple threatened to move out of China, if China cared that the jobs they provided are important enough, they would change there ways, period.

If China said, ok bye bye, then that just tell us and everyone else what CHINA thinks about its people(Even more so than we already know).

You missed the point of the article too it seems. The point being is Apple isn't threatening to pull out. They have set standards and are NOT enforcing them. They aren't cracking down on their suppliers based on their standards.

Whether the article is accurate or not can be argued. But that point can't. Bottom line is - Apple has the power (more than most) to make changes and they are (seemingly) not.

 

[CapnJackGig]

Translation: Apple is doing nothing about it.

 

[samcraig]

Tech innovation vs. international sociocultural (and possibly political) change.

One is nothing like the other.

Are you suggesting that Apple can't influence change? That if they actually held to their standards (http://www.apple.com/supplierresponsibility/) instead of letting things "go" that things couldn't be better?

 

[*LTD*]

Apple, with it's tremendous profits could still keep prices the same and pay out more. Would they accumulate wealth as fast? No. But at the same time - they would be actually living their rhetoric about fair treatment, working conditions, etc.

No corporate board of directors would approve this. Not just at Apple but at any of the companies that are Foxconn's customers, unless government regulation requires them to do so, OR consumers stop buying their gear as a sign of protest.

Neither will happen anytime soon. Especially while we're all waiting on the edge of our seats for, say, a retina-disaply iPad, or the next Mac Pro refresh.

 

[dgree03]

Apple, with it's tremendous profits could still keep prices the same and pay out more. Would they accumulate wealth as fast? No. But at the same time - they would be actually living their rhetoric about fair treatment, working conditions, etc.



You missed the point of the article too it seems. The point being is Apple isn't threatening to pull out. They have set standards and are NOT enforcing them. They aren't cracking down on their suppliers based on their standards.

Whether the article is accurate or not can be argued. But that point can't. Bottom line is - Apple has the power (more than most) to make changes and they are (seemingly) not.

I am not saying they are threatening to pullout, I am just saying that would be a way to exert power that seemingly they feel they don't have or they are not enforcing.

 

[Slovak]

What they could do is say "FOXCON, up YOUR standards or were moving"

Ahem... moving where?

 

[Slovak]

Indentured servitude, forced overtime, 20 workers living together in a small apartment, and especially etc. etc. etc.

You see anyone FORCING these people to take the jobs? Don't like it? Vote with your feet. Put on your shoes, pack up your bag, and go in search of a better job... wait... wait... Foxconn IS the best (only?) job around there!

 

[samcraig]

No corporate board of directors would approve this. Not just at Apple but at any of the companies that are Foxconn's customers, unless government regulation requires them to do so, OR consumers stop buying their gear as a sign of protest.

Neither will happen anytime soon. Especially while we're all waiting on the edge of our seats for, say, a retina-disaply iPad, or the next Mac Pro refresh.

Overall Compliance
74%

http://images.apple.com/supplierresponsibility/pdf/Apple_SR_2012_Progress_Report.pdf

74%. That's a C. I think Apple should aim higher. That's all I'm saying...

 

[Nunyabinez]

If apple left, someone else would fill it. Come on, you act as if Foxconn would just shut down! You are trying to act like apple cares that a million people in china would lose jobs? According to some people in this thread, apple should only care about its bottom line.

If apple threatened to move out of China, if China cared that the jobs they provided are important enough, they would change there ways, period.

If China said, ok bye bye, then that just tell us and everyone else what CHINA thinks about its people(Even more so than we already know).

Apple does care about keeping a cheap, reliable, flexible resource available to run their business. That is the beauty of markets. As Adam Smith proposed, by each person seeking their rational interests wealth is created. Granted, people can be evil and abusive, but after a while no one will do business with them. Apple is looking at their bottom line, Foxconn is looking at their bottom line and the Foxconn employees are looking at their bottom line. The only people who seem pissed off are the bystanders.

Do you really think that China would bow to pressure from an American company? And what good would it do to the people of China for everyone to know what they really think? To pull out of China and harm hundreds of thousands of people just to point out how corrupt their government is? Is that a moral choice?

And I promise you if Apple pulled out of China there would be dozens of stories about how Tim Cook was killing Chinese people.

 

[Rodimus Prime]

No corporate board of directors would approve this. Not just at Apple but at any of the companies that are Foxconn's customers, unless government regulation requires them to do so, OR consumers stop buying their gear as a sign of protest.

Neither will happen anytime soon. Especially while we're all waiting on the edge of our seats for, say, a retina-disaply iPad, or the next Mac Pro refresh.

by that argument then no corporate board would approve charity work. Apple of the big companies is one of the WORSE companies when it comes to charity and helping others. Their current offering is still below piss poor levels but then again there DNA contains SJ who was a very greedy greedy man.

 

[uknowimright]

yeah I'm sure Apple doesn't have the power to add some stipulation to their contracts like, hey here is this money, you better use it to improve conditions and we want a report on how that money was used

 

[samcraig]

You see anyone FORCING these people to take the jobs? Don't like it? Vote with your feet. Put on your shoes, pack up your bag, and go in search of a better job... wait... wait... Foxconn IS the best (only?) job around there!

True. Let's blame the workers who agree to work in such bad conditions. Let's also blame them for wanting to make a living wage.

Something tells me that if you were in the situation and had little to no options for a job you'd be first in line to cry foul. Or maybe you'd "shut up" and just enjoy the fact you have a job. Right?

----------

yeah I'm sure Apple doesn't have the power to add some stipulation to their contracts like, hey here is this money, you better use it to improve conditions and we want a report on how that money was used

It was mentioned in the article that a couple of other tech companies do exactly that. They give more money under the strict stipulation that x amount goes to x,y and z for the workers.

It can be done. Anyone that says it can't or that Apple can't/doesn't have to worry about it/etc is just so off base it's shameful.

 

[*LTD*]

Apple does care about keeping a cheap, reliable, flexible resource available to run their business. That is the beauty of markets. As Adam Smith proposed, by each person seeking their rational interests wealth is created. Granted, people can be evil and abusive, but after a while no one will do business with them. Apple is looking at their bottom line, Foxconn is looking at their bottom line and the Foxconn employees are looking at their bottom line. The only people who seem pissed off are the bystanders.

Do you really think that China would bow to pressure from an American company? And what good would it do to the people of China for everyone to know what they really think? To pull out of China and harm hundreds of thousands of people just to point out how corrupt their government is? Is that a moral choice?

And I promise you if Apple pulled out of China there would be dozens of stories about how Tim Cook was killing Chinese people.

People envision a mass Exodus of American companies leaving China, with Apple bravely, doggedly at their head, like Moses or something.

lmao, destabilizing the Chinese manufacturing sector when Washington is run from Beijing.

http://www.guardian.co.uk/business/2011/nov/12/chins-threatens-us-with-new-debt-downgrade?CMP=twt_gu

Chinese ratings agency threatens US with new debt downgrade
• Head of ratings agency issues warning in TV interview
• Fears of renewed budget deadlock in Washington

The head of China's biggest ratings agency, Dagong Global Credit Rating, is warning that it may downgrade the US's sovereign debt rating again because of Washington's failure to tackle the federal budget deficit.

The remarks by Dagong's chairman, Guan Jianzhong, to be broadcast in an interview with al-Jazeera on Saturday morning, come at the end of another week of deep turmoil for the world economy.

Any further downgrading of the US credit rating, while making more US borrowing more expensive, would also be a matter of concern to Beijing.

China is the largest foreign buyer of US government debt – accounting for around third of all foreign-held US securities – despite the fact it has gradually reduced its holdings since the S&P downgrade and has also lost heavily on its large holdings of US currency.

Since the summer – and the debt-ceiling crisis – China has become ever more vocal about what it describes as the US "addiction" to debt, warning in August that more "devastating credit rating cuts" and global economic turmoil were around the corner unless Washington learned to live within its means.

 

[uknowimright]

It was mentioned in the article that a couple of other tech companies do exactly that. They give more money under the strict stipulation that x amount goes to x,y and z for the workers.

It can be done. Anyone that says it can't or that Apple can't/doesn't have to worry about it/etc is just so off base it's shameful.

very doable, I know we have something similar with our business partners in India