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Foxconn: Apple Not Subsidizing Recent Wage Increases

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In late May, word surfaced that Apple would be providing subsidies to workers at its Taiwanese manufacturing partner Foxconn. The subsidies were reported to be in the range of 1-2% of profits from the Apple products being produced and were part of a larger effort to address low morale and increasing public scrutiny over employee suicides at the company's mammoth manufacturing complex in Longhua, China.

A brief report today from DigiTimes cites comments from a Foxconn executive made in the Chinese-language National Business Daily denying those reports.
The executive said the rumor is purely speculation and Foxconn has never received any subsidies from Apple, the report said.
In order to address the worker issues at its plant, Foxconn has instituted substantial wage increases and transferred management of the sprawling dormitory complexes for workers at its Longhua plant, which has a staff of 300,000 workers, to independent companies.

Foxconn has also announced plans to shift some of its production of Apple products away from the Longhua plant to new facilities in northern and central China.

Article Link: Foxconn: Apple Not Subsidizing Recent Wage Increases
 

jayducharme

macrumors 68040
Jun 22, 2006
3,908
3,959
The thick of it
Another difficult situation for Apple. If they subsidize the workers, then basically they might as well own the company. If they don't subsidize, then Apple is seen in the press as greedy and heartless. I'm sure Apple doesn't want to get into the manufacturing business; they've got too much else to worry about. The best they can probably do is put pressure on Foxconn to create better working conditions. Given this article, it appears that might be what's happening.
 
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Dae

macrumors regular
Apr 30, 2009
134
12
That's good, I wouldn't want to pay even higher prices.
 
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bcackerman

macrumors member
Nov 2, 2009
38
0
It's not that they own the factory but that they're partners. I'm sure if Apple doesn't contribute directly, Foxconn could raise their prices of goods by 1-2%.
 
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eponym

macrumors 6502
Jul 2, 2010
297
3
lol @ complaining that you haven't received any cut of the profits after it's only been in stores for a few weeks.

Here's a hint Foxconn: Apple is in no way obligated to make YOUR workers happier/better paid.

Did Apple say it would be a weekly thing? I'm sure their accountants don't feel like calculating the Foxconn chunk over and over.

To me it seems like Foxconn just wants that chunk of cash so that they can skim a little off the top.
 
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addicted44

macrumors 6502a
Jun 6, 2005
532
168
Apple! Move the factories to USA.

And how do you suppose they do that?

The fact is that China (and Taiwan) have accumulated far more skill/knowledge in manufacturing than exists in the US. If Apple does indeed build a manufacturing plant in the US, the following is going to happen:

1) Prices will increase. Which I am fine with, tbh....I think the effects of losing its manufacturing position completely has hurt the US far more than the slightly lower prices its provided.
2) Quality will drop (and this is the major issue. The US has not been doing such manufacturing for years (decades even). The people with the experience to do this work simply don't exist. How you bridge the gap is a much larger institutional problem which Apple cannot surmount on its own. (not when its got competitors like HTC/Motorola/Google, who basically cater to the lowest common denominator). That being said, if anyone can do it, Apple can.

In the 70's and 80's the US decided it did not really want to be in manufacturing (services were all the rage). We are seeing the results of those decisions now.
 
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the-oz-man

macrumors 6502
Jun 24, 2009
402
153
And how do you suppose they do that?

The fact is that China (and Taiwan) have accumulated far more skill/knowledge in manufacturing than exists in the US. If Apple does indeed build a manufacturing plant in the US, the following is going to happen:

1) Prices will increase. Which I am fine with, tbh....I think the effects of losing its manufacturing position completely has hurt the US far more than the slightly lower prices its provided.
2) Quality will drop (and this is the major issue. The US has not been doing such manufacturing for years (decades even). The people with the experience to do this work simply don't exist. How you bridge the gap is a much larger institutional problem which Apple cannot surmount on its own. (not when its got competitors like HTC/Motorola/Google, who basically cater to the lowest common denominator). That being said, if anyone can do it, Apple can.

In the 70's and 80's the US decided it did not really want to be in manufacturing (services were all the rage). We are seeing the results of those decisions now.

I agree and would add that Organized Labor help with a gigantic push and ultimately pushed themselves into irrelevance.
 
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BruiserBear

macrumors 6502a
Jul 24, 2008
565
463
I'm sure Apple is the reason these Foxcon employees are killing themselves. I'm sure it has nothing to do with the fact that they've grown up under a repressive communist government that gives them almost no hope of living a good life.
 
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addicted44

macrumors 6502a
Jun 6, 2005
532
168
Unionized USA workers would never make Apple products. They would demand far too much money and too much time off.

Thats just propaganda with very little basis in fact.

The highest unionization rates the US has ever had is a little more than 30% (non-agriculture industrial). The US has lost far more manufacturing jobs than that.

Additionally, amongst labor-intensive industries, those with the highest unionization have been able to best retain manufacturing in the US (e.g. Auto industry, but that is also being eroded).

Finally, the amount of unionization in the US even at its peak is not even close to the unionization in other advanced countries, like Germany. How is it that Germany depends on its manufacturing industry if unions are such a big problem?

Look at Table 1 at:

http://eh.net/encyclopedia/article/friedman.unions.us

The idea that private unions in the US have any power (not including public sector unions, which still have a modicum of power) is not supported by facts. Additionally, if Apple were to move manufacturing here, I promise you their plants will not be unionized.
 
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Atkins

macrumors 6502
May 14, 2010
291
0
Tokyo
Comment

realeric

macrumors 65816
Jun 19, 2009
1,087
1,343
United States
And how do you suppose they do that?

The fact is that China (and Taiwan) have accumulated far more skill/knowledge in manufacturing than exists in the US. If Apple does indeed build a manufacturing plant in the US, the following is going to happen:

1) Prices will increase. Which I am fine with, tbh....I think the effects of losing its manufacturing position completely has hurt the US far more than the slightly lower prices its provided.
2) Quality will drop (and this is the major issue. The US has not been doing such manufacturing for years (decades even). The people with the experience to do this work simply don't exist. How you bridge the gap is a much larger institutional problem which Apple cannot surmount on its own. (not when its got competitors like HTC/Motorola/Google, who basically cater to the lowest common denominator). That being said, if anyone can do it, Apple can.

In the 70's and 80's the US decided it did not really want to be in manufacturing (services were all the rage). We are seeing the results of those decisions now.

There are still many EMS companies in the USA. The machines in Foxconn are made in Japan, Germany, USA(god... Universal Instruments moved their factory to China), S Korea.
 
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heavy2healthy

macrumors regular
Oct 19, 2009
139
0
The unions helped raise wages in this country. Read your history about how workers were treated before unions. Wanna know why nonunion factories pay decent because they have to compete with union ones. Iphone's are made overseas because they can be made by people that work for peanuts and working there is so great how many of them killed themselves? But hey when your worth over 5 billion you need to cut costs whenever possible. lol
 
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Virtualball

macrumors 6502
Jun 5, 2006
399
8
One thing I've never understood is why Apple should help Foxconn. Fun fact, every 360 built is from Foxconn. My Acer Nettop is from Foxconn. Why don't Microsoft and Acer help out?
 
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HLdan

macrumors 603
Aug 22, 2007
6,383
0
Apple! Move the factories to USA.

Thank you!!! I'm sick of getting my products built and shipped from China. They can't friggin' build a damn thing over there without it coming to the states defective. I've ordered multiple products from Apple including my latest Core i5 MBP and it shipped to me with a dent on the bottom and scrapes on the casing, yes that's right, scrapes. Just about everything I've purchased from them in the last 3 years has come from China and has come in poor condition. Apple better not subsidize them, it'll just end up coming out of my pocket and I'll get the same poor conditioned products.
 
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darrenbeige

macrumors regular
Jun 21, 2010
168
0
It's alright. "They are all over it" apparently so there can't be a problem can there? :p

The best thing for everybody (including Apple) would be for Apple to buy Foxconn. Apple can pay more to Foxconn's workers as they don't have to pay Foxconn's margins.

It won't happen though. It's antitrust again. Apple would be seen as a monopoly figure.
 
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PinkyMacGodess

macrumors 603
Mar 7, 2007
5,453
2,222
Midwest America.
So if there was a subsidy, management took it?

Transferring management to a third party has its benefits: You get to deny the torture that the 'management' is exacting on 'their' employees...

It's an American style shell game. They are fast learners, those Chinese...
 
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