Nightline's Look into Apple's Foxconn Factories

[mijail]

You know how they will get that? Leave them alone. When countries develop, wages increase -- there are no known exceptions. The only thing that will stop it are naive do-gooders who would just as soon shut them down.

Agreed. And I'd guess it's even worse if the naive do-gooders are in fact 'doing the good' out of some agenda, or misunderstanding, or twisted idea of good and bad, of their own.

 

[TMay]

for those wondering about the 5 days

I'd surmise that JIT (Just In Time) only goes so far. Better to have buffers in place on the manufacturing line so that glitches/shortages won't stop the line immediately.

A bit more material handling and more floor space needed for intermediate storage, but overall, the line probably runs smoother.

Think of it as having a lot of shorter lines with storage rather than one continuous line.

 

[mijail]

I would happily pay a surcharge on apple products I buy to have karma free. Workers treated properly, paid better, better conditions etc.

Ever thought of calculating the surcharge and paying it to some human rights NGO, for example?

Even if you calculate a too small surcharge, I'll bet it'd help. At least, help more than just complaining and doing nothing.

And if you don't believe in NGOs, I'd recommend something like givewell.org, or any other "effective giving" organization.

 

[Michael Scrip]

I think when they recently raised wages, people with technical skills started with higher wages, I think taking a test was mentioned.

That's great!

I guess the big take-away from all of this is:

Foxconn employees are NOT being taken advantage of when compared to other jobs in China.

 

[tjxism]

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The entire process takes five days from start to finish. It won't be costing anything like all that time and money to build each one.

How much do you figure, then? I was just roughing it out, but I believe there are things I'm not considering.

Any other estimates out there?

Seems you don't know much about modern mass production. I tried to explain it in reply but failed. May you please go find 'mass production' in wiki.

It takes 5days to turn resistors, chips, PCB, rams, aluminum plates and tiny screwers into an iPad. But each day there are tons of them off production line.

 

[linuxcooldude]

Now I just saw another video from ABC where Diane Sawyer said to Bill Wier: Didn't Apple recently raise salaries? Lol, these reports don't really seem to know much do they.

http://www.youtube.com/watch?v=Jk-xqPKOxl4 forward to 3:30 Minutes

 

[di1in]

I'm getting my head around the labor cost of making an iPad. Five days to make one = 120 hours (roughly) at a cost of $1.78/hr = $213.60 in labor only. I figure since each of the 325 hands that build the iPad are probably only handling it for a fraction of an hour, and that there is most likely minimal time an iPad is sitting around waiting for the next bit of work to be done, it's safe to say it's built fairly continuously for $1.78/hr.

If the pay for workers was $12/hr, and the iPads were being assembled continuously as estimated above, the labor cost would be $1440 per iPad. Wow. I guess that's why they send them to China.

Even if my math is way off, it's clear that they'll never build them in America, unless robots do most of the assembly.

This is probably why Steve told Obama that those jobs aren't coming back.

 

[LagunaSol]

Oh my gosh, Foxconn workers pay for their own meals and rent???

HEY, JUST LIKE ME!

And if you manufacture something in Tennessee rather than in San Francisco because it's cheaper, is that somehow unfair and exploitative?

 

[BobbyRond]

I do factory sheet metal work, and it is monotonous at times. Foxconn work looked very similar to what we do, albeit not at the same scale and quick pace they do there.

Don't feel obligated to answer, but just out of curiosity, what do you earn an hour? This would allow us to make somewhat of a comparison if Apple products were to be manufactured in the US.

I'm getting my head around the labor cost of making an iPad. Five days to make one = 120 hours (roughly) at a cost of $1.78/hr = $213.60 in labor only.

How much do you figure, then? I was just roughing it out, but I believe there are things I'm not considering.

Any other estimates out there?

http://www.isuppli.com/PublishingImages/Press Releases/2011-03-12_iPad2_BOM.png

I guess it's only $10 so with that same multiplication factor you used earlier, that would make the manufacturing cost $62. So still, quite an increase...

Explain to me why the media needs Apple's permission to go into another companys factories.... wouldn't they need permission from, oh... I don't know, FOXCONN for that to happen?

I agree with you that Foxconn should definitely have a say in this, but Apple does need to agree on it too... But everyone should indeed stop making the Apple = Foxconn comparison.

Apple and the rest of the world...

Just because the jobs are in demand, does not give you the right to be a pig and pay dog food wages while you roll in ungodly profits.

Sony does not have a machine that runs OSX, but at least the Z is made in Japan where people are paid accordingly for the work done.

Perhaps we should start thinking different on what we buy Apple.

Mr. Ballmer! How nice of you to join us on this forum!

Globalization is an ugly business. Most people have no clue where the products come from that they purchase. ie. many of the base minerals contained in an iPhone were mined using child labor under horrible conditions. Really though, Apple should be doing all they can to improve the supply chain. Hopefully this isn't just a one time media blitz, but a real push to improve labor conditions. Next thing you know, the workers there will be demanding unions...

You should read the Supplier Report. Apple has put a lot of work in mapping their entire supply chain and they found 6 active cases (and 7 more cases in the past) of child labor. In all these cases it turned out that children identified themselves with false identification. And then again, out of all those millions of workers, only 13 cases of child labor is extremely low...

 

[Soliber]

I'd surmise that JIT (Just In Time) only goes so far. Better to have buffers in place on the manufacturing line so that glitches/shortages won't stop the line immediately.

A bit more material handling and more floor space needed for intermediate storage, but overall, the line probably runs smoother.

Think of it as having a lot of shorter lines with storage rather than one continuous line.

The point is to try to optimize the entire proces so that you do not need buffers to guarantee a good flow. Buffers and inventory are forms of waste, which should only be tolerated as long as there isn't a more cost effective solution.

 

[whizhunk]

Makes me sad knowing the the per hour rate and struggle young generation is facing in china. I earn 68$ per hour giving 8 hours everyday. I wish apple provides a increment to these young people and make things better for their lives.

 

[linuxcooldude]

You should read the Supplier Report. Apple has put a lot of work in mapping their entire supply chain and they found 6 active cases (and 7 more cases in the past) of child labor. In all these cases it turned out that children identified themselves with false identification.

The news story did mention job applicants scanning in their State ID cards checking if they were valid or not. I initially did wonder why they would falsify an ID card, but now thats clear.

 

[BobbyRond]

Makes me sad knowing the the per hour rate and struggle young generation is facing in china. I earn 68$ per hour giving 8 hours everyday. I wish apple provides a increment to these young people and make things better for their lives.

Foxconn ≠ Apple

Again, $1.78 an hour is pretty high for someone uneducated. As said earlier, grad students earn $2.50.

I bet you don't do assembly line work. For someone earning $68 an hour, you made a pretty uneducated comment...

 

[ApplesAndOrangs]

Minimum wage ranges from $100-$200:

http://en.wikipedia.org/wiki/List_of_minimum_wages_in_China_(PRC)

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Makes me sad knowing the the per hour rate and struggle young generation is facing in china. I earn 68$ per hour giving 8 hours everyday. I wish apple provides a increment to these young people and make things better for their lives.

And what do you do? Your qualifications? Your education?

 

[marksman]

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Most interesting to me was the youth of the workers. I wish our 17-25 year olds desired to work so hard to help their families

 

[chuckd83]

Just curious...

What's the average salary for other jobs in China?

Janitor, McDonalds, police officer, doctor, etc?

I'm a teacher and make 6000 yuan/mo, but that's somewhat low for my position. However, they provide an apartment & bills for free. Basically it's monopoly money to me since I'll never spend 6000/mo on food.

 

[wonderspark]

http://www.isuppli.com/PublishingImages/Press Releases/2011-03-12_iPad2_BOM.png

I guess it's only $10 so with that same multiplication factor you used earlier, that would make the manufacturing cost $62. So still, quite an increase...

Wow, only $10 to assemble. Pretty amazing.

Thanks, I've learned quite a bit tonight.

 

[TMay]

The point is to try to optimize the entire proces so that you do not need buffers to guarantee a good flow. Buffers and inventory are forms of waste, which should only be tolerated as long as there isn't a more cost effective solution.

By definition, 5 days/120 hours isn't required for assembly of one unit, yet, 5 days is what it takes on the manufacturing line. Somewhere within that manufacturing line, there is intermediate storage, and I doubt there are many processes in line that require hours of offline drying/curing.

 

[BubbaMc]

Is there anywhere online that we can see this?

 

[tdream]

Ten hours of work to pay a months dorm rent? Sign me up! It takes me 4 12-hour shifts to pay my rent!


If the cost of living to pay ratio are even it doesn't matter if you make $.25/hour or $250/hour.

Do you live in a dorm? You muppet.

At least this will shut the fools up who thought board and meals are all paid for.

 

[marksman]

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And this is why companies like Apple outsource to China. There is no way you would be able to get Americans to work 12 hours on an assembly line making $1.78 per hour. Imagine what that iPhone would cost if it were made in Detroit by union workers!

This is a real problem. In a unionized environment you don't have an ever over turning supply of young workers which makes sense for this kind of work but instead have life long union players who get slower and older and make many fold more money.

I hope china does not go the union road. We know at the end of that road only disaster waits. If they can keep conditions save and wages reasonable there is no reason for a union albatross

 

[macduke]

This wouldn't be an issue if:

1. U.S. based companies hadn't shipped all the jobs overseas mainly because of #2 below
2. If unions hadn't drove up the pay rate until it was ridiculous
3. If the world's population wasn't spiraling out of control

FACTORY LINE WORKERS SHOULDN'T MAKE MORE THAN TEACHERS. Just because you screw a bolt onto a Chevy Malibu doesn't mean you should get paid $60k a year. My wife is an Autism Specialist—she trains parents on how to reinforce proper behaviors with their autistic children. She gets bitten, scratched, and bruised by these little rascals. Not to mention our car gets peed all over when she transports them. She makes $12.50/hr. I'm a student and I'm working as a web design intern. I make $9/hr making $10-20k websites from wire-frame, to Photoshop mockup, to HTML/CSS coding, to using WP as a CMS with custom-coded/modified plugins. Why should some factory worker doing repetitive, often mindless work make so much more than the two of us combined?

ALSO—PEOPLE NEED TO STOP HAVING SO MANY BABIES. Just stop it. Believe it or not, we are going to run out of food, water, and room one of these days. And if you didn't notice, the birth rate is increasing exponentially. That is a very, very bad thing. Expect more of this from more areas of the world as people are so ubiquitous that they are no longer considered human and are thought of as disposable machines.

In addition I'm pissed off that college costs so much and tuition increases twice the rate of inflation—but I'll save that rant for another day as I'm rapidly drifting off topic.

 

[marksman]

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Its worth remembering that a generation or two ago twenty or forty million people in China starved to death as a result of the "Great Leap Forward" (i.e. Chinese peasants melted down cooking pots and farm implements to make pig iron).

The kids we saw tonight are living a life of inconceivable luxury compared to that of their parents and grandparents. And their children and grandchildren will live lives comparable to that which we currently enjoy in the US and Europe. Just as our great-grandparents toiled in harsh conditions to build our present consumer society, so these people are doing today.

The Nightline report was about what I expected. You'd get people complaining about low pay, boredom, etc. in most factories here in the US.

The only odd note came at the end, when the reporter suggested that Apple could, because of their profitability, double the pay of all the Foxconn workers. As a trained economist, I groaned at that over simplistic piece of pandering. Imagining the distortions and corruption such an act would introduce into the system - ABC News would be there next year to investigate all the murders, kickbacks, and bribery that occurred as a result. Bottom line: Paying radically "over the market" rate for labor isn't always such a good idea.

Excellent point. Whenever people say just pay them all a lot more they don't understand the Chinese culture could not handle it , no culture could and corruption and kickbacks would rule the day

If they paid 1000% more than anyone else the jobs are as good as gold. You end up with people getting kickbacks for hiring you get organized crime taking over the entire process.

You can't just wave a wand and make it so unskilled labors make way more money then is possible anywhere else.

 

[ixodes]

It was a self serving puff piece, just as expected. A conflict of interest, since those who bother with things known as "facts", already know the true relationship of ABC / Disney / Apple et al.

 

[marksman]

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And this is why companies like Apple outsource to China. There is no way you would be able to get Americans to work 12 hours on an assembly line making $1.78 per hour. Imagine what that iPhone would cost if it were made in Detroit by union workers!

Give it about 10 years. This is why there is so much negative press on American unions and a majority of the population now believe that the work force would be better without any representation whatsoever.

When the day comes that the last union has been eliminated in the U.S., corporations will bring manufacturing back here and have free reign to create deplorable work conditions.

Nothing will stop this from happening. The wheels were set in motion during the Regan administration.

Unions started to decline from usefulness to absolute albatross 50 years ago. There are plenty of non union businesses in the us none with deplorable work conditions.

They need for unions in the us is long gone and they only exist now to squeeze money and prevent companies from being competitive. In still existing strong unions it is impossible to fire a completely incompetent employee. Unions destroyed our automotive industry, the airline industry and education.

It will be a good day when unions stop existing in the us.

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And this is why companies like Apple outsource to China. There is no way you would be able to get Americans to work 12 hours on an assembly line making $1.78 per hour. Imagine what that iPhone would cost if it were made in Detroit by union workers!

According to this NYTimes article it would cost around $65 more per iPhone to pay American wages. The wage is seeming a small hurdle comparatively speaking. I recommend reading the whole thing as it's a really good article, IMO.

It is hard to estimate how much more it would cost to build iPhones in the United States. However, various academics and manufacturing analysts estimate that because labor is such a small part of technology manufacturing, paying American wages would add up to $65 to each iPhone’s expense. Since Apple’s profits are often hundreds of dollars per phone, building domestically, in theory, would still give the company a healthy reward.

But such calculations are, in many respects, meaningless because building the iPhone in the United States would demand much more than hiring Americans — it would require transforming the national and global economies. Apple executives believe there simply aren’t enough American workers with the skills the company needs or factories with sufficient speed and flexibility. Other companies that work with Apple, like Corning, also say they must go abroad.

Lethal

I didn't read the times article but I don't think the 65 dollar figure could be accurate. It probably does not include the cost to actually build the factories here which would be much more expensive. I suspect they are just doing a per hour multiple. There are not factories here to do this stuff do they would need to be built and allow the company to recoup those costs. There are more costs in a factory than just payroll. Not to mention taxes and benefit costs are much different here.