Tim Cook Responds to Report on Working Conditions at Suppliers' Factories

[benjaminm3]

That's cuz you're in the major cities.
Try going outside of typical tourist areas.

Where do you think your phones are being manufactured? Tiny fishing villages?

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It's pathetic how many people chiming in here have clearly not read the NYT series, or listened to the TAL piece, or have done any research on things they are shooting their mouths off about. It's embarrassing.

Or have any understanding of the history of industrialization and the process of becoming a developed nation.

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+1 to this - Apple has record profits just about every quarter now. They can afford to move their manufacturing operations to somewhere that has more fair working conditions or somehow make sure those workers in China are paid more fairly.

Are they able to find entire supply chains in other locations that have the responsiveness that they need? Everything from screws, plastic, glass, etc? Part of the reason manufacturing has been moved overseas is the ability to react quickly to changes in the market.

 

[samcraig]

To get everyone Apple gear and even come close to meeting demand, all the great Apple devices we love to preach from *have to* be made in China. There's no way around this.

Ok. There's no way "around" manufacturing in China. Does that mean there's no way to improve conditions at the plants that Apple uses to create the "great Apple devices we love."

And note I said conditions. I didn't say increase in pay. I didn't say pull out of China. I said improve conditions. And to further clear up any possible misunderstanding. I mean that these plants should adhere to the standards Apple has "demanded" from them and that Apple should hold them to it.

 

[BC2009]

Well, I think Apple has highest profit margin. If they are not pushing their suppliers so hard, conditions could be changed. It's time for Apple not to just consider profit.

Right, because if they gave more money to Foxconn, then Foxconn executives would think that the best thing to do with that money would be to distribute it to their workers rather than line their own pockets.

This is a sad situation for them over in China, but it is no different than any other nation historically that went through an industrial revolution. It would be amazing if companies (read plurally) including Apple could manage to affect significant change from afar, but such a thing has never happened. Until Chinese laborers are able to legally organize, until the hands of the factory executives are forced, and until the government (which is not a democracy) has a reason to support their populous in this change then nothing will change.

Supposedly workers at Foxconn are higher paid than others (including Samsung employees at their factories). Supposedly Apple (and others) have managed to eliminate child labor. But from what I understand any of these Chinese manufacturers can hire 2000 people in a day because demand for these factory jobs is so high. The factory owners hold all the cards in a situation like that. Any worker wanting better conditions is immediately undercut by another who will accept worse conditions to get the paycheck.

The only way that Apple could run Foxconn is if Apple were to buy Foxconn. Then they might be able to fix things for Foxconn employees, and then the media could focus on every other manufacturer that uses Chinese labor, but perhaps they won't both since nothing is as big a story as "Apple". People think that Apple has all this "leverage", but Foxconn knows that Apple needs them as much as they need Apple. Switching suppliers is not an easy task when you are dealing in such large volumes. A Foxconn competitor would have to build factories to support Apple, and then even if Apple switched, what is to guarantee that whomever they switched to does not make things look good for the inspectors, make lots of promises and then change nothing in the long run? Nothing guarantees it -- Apple knows it and Foxconn knows it. That's why Apple's only option to really change this would be to buy Foxconn, and I don't even know if the Chinese government would allow that.

 

[samcraig]

Right, because if they gave more money to Foxconn, then Foxconn executives would think that the best thing to do with that money would be to distribute it to their workers rather than line their own pockets.

Did you read the articles? I ask sincerely because this was covered. Other manufacturers DO pay Foxconn/other shops additional money with the stipulation that it be used to better the work environment. And I would imagine if these companies are making that contingency - in order to keep their business and get more money - they have to provide "proof" points of where the money went.

These deals aren't like two guys meeting in an Alley and one says "Here's the goods" and the other says "Ok - here's the money."

There are long and complicated contracts which cover many aspects of expectations from both parties involved. Provisos such as money allotted to work conditions isn't crazy - nor am I sure are non-existent to begin with based on Apple's website. The issue isn't so much if you can create provisos. The issue is that they are audited and responded to accordingly.

If you don't enforce your provisos - then you ultimately to blame for them not being adhered to.

 

[Michaelgtrusa]

Right, because if they gave more money to Foxconn, then Foxconn executives would think that the best thing to do with that money would be to distribute it to their workers rather than line their own pockets.

This is a sad situation for them over in China, but it is no different than any other nation historically that went through an industrial revolution. It would be amazing if companies (read plurally) including Apple could manage to affect significant change from afar, but such a thing has never happened. Until Chinese laborers are able to legally organize, until the hands of the factory executives are forced, and until the government (which is not a democracy) has a reason to support their populous in this change then nothing will change.

Supposedly workers at Foxconn are higher paid than others (including Samsung employees at their factories). Supposedly Apple (and others) have managed to eliminate child labor. But from what I understand any of these Chinese manufacturers can hire 2000 people in a day because demand for these factory jobs is so high. The factory owners hold all the cards in a situation like that. Any worker wanting better conditions is immediately undercut by another who will accept worse conditions to get the paycheck.

The only way that Apple could run Foxconn is if Apple were to buy Foxconn. Then they might be able to fix things for Foxconn employees, and then the media could focus on every other manufacturer that uses Chinese labor, but perhaps they won't both since nothing is as big a story as "Apple". People think that Apple has all this "leverage", but Foxconn knows that Apple needs them as much as they need Apple. Switching suppliers is not an easy task when you are dealing in such large volumes. A Foxconn competitor would have to build factories to support Apple, and then even if Apple switched, what is to guarantee that whomever they switched to does not make things look good for the inspectors, make lots of promises and then change nothing in the long run? Nothing guarantees it -- Apple knows it and Foxconn knows it. That's why Apple's only option to really change this would be to buy Foxconn, and I don't even know if the Chinese government would allow that.

Foxconn is from Taiwan.

 

[ixodes]

You can't create a massive workforce that simply doesn't exist in the US.

Respectfully I disagree

To get everyone Apple gear and even come close to meeting demand, all the great Apple devices we love to preach from *have to* be made in China. There's no way around this.

Once again, I disagree.

A stellar example of what's possible when one keeps an open mind and seeks to achieve, is the exemplary efforts & successful results of Toyota and Honda.

Where once the cars were all made in Japan and shipped here. Now it's the other way around. Every single Camry (as just one example) is made in the USA. The content of the car is 96% US made parts, materials and assembly. Just a few pieces like Nippon Denso computers come from Japan.

On a constant and regular basis over the last twenty some years, they have added more and more manufacturing plants in the USA. Even Nissan Mercedes and others now build in the USA.

It's 100% possible.

If Apple were to seek out a city like Detroit where unemployment is 9%, pump in a bunch of cash for training and to build a manufacturing complex, Apple would not only be doing the right thing, they would have legitimate bragging rights that I and others would be happy to point out to everyone we know. To be able to endorse Apple "Made In America" Products would be so brilliant Apple's sales would skyrocket even faster than they are.

It's already been deemed feasible by several manufacturing firms, pundits, analysis and the like. They say it would only increase Apple product prices about 12% a modest amount for all the good it would do our economy and the positive precedent it would set.

 

[daxomni]

You can't create a massive workforce that simply doesn't exist in the US. To get everyone Apple gear and even come close to meeting demand, all the great Apple devices we love to preach from *have to* be made in China. There's no way around this.

I grew up honestly believing that America was exceptional, both in our abilities and our intelligence. Now I know that, in reality, we're no better than so many other tired and fading empires that came before us. A victim of exceptional luck and happenstance resulting in grossly misjudged value and worth. Our amazing arrogance is only matched by our unbelievable ignorance.

 

[jimmc]

If the Chinese government doesn't give a **** about its people, why should we? I mean, comon'. If these factory workers weren't working for Foxconn, they'd be in their rural villages doing bugger all. It isn't our job to make every country into a "little America". It's a matter for the Chinese to sort out, or not, as they decide.

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I grew up honestly believing that America was exceptional, both in our abilities and our intelligence

You've been watching too much Hannity and O'Reilly.

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To me, there's a far more powerful moral reason to avoid partnering with China and India:

The amount of female abortion and infanticide that pervades both societies.

There's nothing more reprehensible than decades of killing millions of baby girls ... especially after they're born... in order to avoid a dowry in India or to make room for a son in China.

Nature self-corrects this problem.

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This is an absolute disgrace. Apple and any other company involved in this exploitation should be ashamed of themselves.

If the Chinese government and people don't regard it as "exploitation", we have no right to decide otherwise.

It's not our country.

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Honda & Toyota seem to have no problem creating safe & highly profitable new factories in the USA. Their products are far more labor intense to assemble, yet it's win / win for all involved.

The cost of shipping autos from Asia to the USA, and the inability to react quickly to the market demands, are why they started manufacturing in the US.

 

[benjaminm3]

Respectfully I disagree

Once again, I disagree.

A stellar example of what's possible when one keeps an open mind and seeks to achieve, is the exemplary efforts & successful results of Toyota and Honda.

Where once the cars were all made in Japan and shipped here. Now it's the other way around. Every single Camry (as just one example) is made in the USA. The content of the car is 96% US made parts, materials and assembly. Just a few pieces like Nippon Denso computers come from Japan.

On a constant and regular basis over the last twenty some years, they have added more and more manufacturing plants in the USA. Even Nissan Mercedes and others now build in the USA.

It's 100% possible.

If Apple were to seek out a city like Detroit where unemployment is 9%, pump in a bunch of cash for training and to build a manufacturing complex, Apple would not only be doing the right thing, they would have legitimate bragging rights that I and others would be happy to point out to everyone we know. To be able to endorse Apple "Made In America" Products would be so brilliant Apple's sales would skyrocket even faster than they are.

It's already been deemed feasible by several manufacturing firms, pundits, analysis and the like. They say it would only increase Apple product prices about 12% a modest amount for all the good it would do our economy and the positive precedent it would set.

FYI, its cheaper for the Japanese to build cars here. You're comparing first world labor rates against first world labor rates.

 

[ixodes]

The cost of shipping autos from Asia to the USA, and the inability to react quickly to the market demands, are why they started manufacturing in the US.

Not True.

One must first study the history of these companies and their entry, years ago into the USA, to understand why they chose this path. There is no single reason, but rather a plethora of reasons, all of which added up to a very wise decision to build factories here.

One of the leading reasons was both monetary and political. From the very beginning General Motors protested loudly. The US government listened and understood the threat of well made cars coming into challenge GM. Hence a tariff was charged for each new Toyota and Honda shipped into the US.

Growing tensions over the years, as Toyota profited despite the tariff, the government raised the tariff and made all kinds of threats. Nothing worked to stem the success and huge growth in sales Toyota achieved.

Thus Toyota decided to move in, build factories, employ American workers, buy from America suppliers, and the rest is history.

Apple has a golden opportunity if they can manage to spend some money without having a heart attack over the cost of doing business the right way.

 

[linuxcooldude]

If Apple were to seek out a city like Detroit where unemployment is 9%, pump in a bunch of cash for training and to build a manufacturing complex,

Apple would not only be doing the right thing

Apple hasn't done anything "Wrong"

 

[ixodes]

As an investor I use this site (below) daily, and came across another article about Apple.

The tide certainly has changed, from all the glowing reports, to some very sobering reality checks.

Seems that there's even more attention being paid to this issue than many realize.

http://www.marketwatch.com/Story/Story/?guid={DBE4BE18-4ADB-11E1-803F-002128040CF6}

 

[linuxcooldude]

Its hilarious, this has been going on for decades in China, and now its a problem? Old old news.

 

[jackc]

Foxconn employs 1 million people, there were 18 suicides in 2010. The general suicide rate in China is 22 per 100,000 people.


http://www.forbes.com/sites/timwors...pouting-nonsense-about-chinese-manufacturing/

 

[gnasher729]

Foxconn employs 1 million people, there were 18 suicides in 2010. The general suicide rate in China is 22 per 100,000 people.


http://www.forbes.com/sites/timwors...pouting-nonsense-about-chinese-manufacturing/

That makes the suicide rate at Foxconn lower than the murder rate in US retail

 

[benjaminm3]

Not True.

One must first study the history of these companies and their entry, years ago into the USA, to understand why they chose this path. There is no single reason, but rather a plethora of reasons, all of which added up to a very wise decision to build factories here.

One of the leading reasons was both monetary and political. From the very beginning General Motors protested loudly. The US government listened and understood the threat of well made cars coming into challenge GM. Hence a tariff was charged for each new Toyota and Honda shipped into the US.

Growing tensions over the years, as Toyota profited despite the tariff, the government raised the tariff and made all kinds of threats. Nothing worked to stem the success and huge growth in sales Toyota achieved.

Thus Toyota decided to move in, build factories, employ American workers, buy from America suppliers, and the rest is history.

Apple has a golden opportunity if they can manage to spend some money without having a heart attack over the cost of doing business the right way.

There is nothing remotely close to this situation for apple in the US. Japan is a first world country paying first world labor rates, and they were being hurt by the yen strengthening. The US dollar being weak makes it sensible to manufacture in the US, just as the weakness of the RMB makes it sensible to manufacture in China. When the RMB rises in value, manufacturing in China starts to make less sense, and its at that point that you'll see some work possibly return to the US. Foxconn is reportedly moving to more robot production:
http://www.reuters.com/article/2011/08/01/us-foxconn-robots-idUSTRE77016B20110801

China is a textbook case for industrialization and its workers slowly moving up the value chain.

 

[*LTD*]

http://micgadget.com/21420/thousands-line-up-for-foxconns-jobs-in-zhengzhou/

Guess they don't read the NYT.

 

[Peace]

This says it.

 

[leroypants]

It's actually pretty sad and in all honesty extremely disturbing how far some people will go to defend apple and not say a single bad word about the company.

 

[Bernard SG]

More perspective:

Thousands Line Up For Foxconn’s Jobs in Zhengzhou (seems the lines to build iPhones are even longer than the ones to buy them)

Letter to the New York Times From BSR:

1. It is untrue that Apple has consistently disregarded advice that BSR has provided about problems related to working conditions in its supply chain.
2. The account of the pilot project in south China omits and obscures key facts. Despite the publication of a report that has been in the public domain for several years, there are errors in how you present the project conducted under the auspices of the World Bank, BSR, and three other sponsors.
3. Your attribution of several opinions about Apple to BSR misstates the views of the organization. In several places, you attribute certain opinions about Apple to an unnamed “BSR consultant,” despite the fact that this consultant is unnamed, and are not affiliated with BSR. Associating these views with BSR is a serious misrepresentation, and should be changed.

The narrative you present is an inaccurate picture of the work we have done with Apple, of the role Apple played in the worker hotline project, and of BSR’s views of Apple.

 

[Abazigal]

It's actually pretty sad and in all honesty extremely disturbing how far some people will go to defend apple and not say a single bad word about the company.

It goes to show that there are 2 sides to every coin. Not every issue is always in black and white.

 

[linuxcooldude]

It's actually pretty sad and in all honesty extremely disturbing how far some people will go to defend apple and not say a single bad word about the company.

Its equally as sad some people will always put Apple down and never say a single nice word about the company. So your point is?

 

[benjaminm3]

It's actually pretty sad and in all honesty extremely disturbing how far some people will go to defend apple and not say a single bad word about the company.

Its disturbing how many people resort to fallacies and flawed logic to rant about a perceived injustice instead of thinking rationally about the issue at hand.

 

[vrDrew]

It's actually pretty sad and in all honesty extremely disturbing how far some people will go to defend apple and not say a single bad word about the company.

I think you need to read up on the concept of the Straw Man Fallacy.

I don't think anyone here is disputing the basic facts of the New York Times series. But its also important to look at the issues raised by those articles with some perspective: Apple, by dint of its considerable market success, is simply the biggest "target" for journalists. The jobs created by its Chinese contractors are, relative to other employment options in China, actually quite desirable.

The Times series was, I think, important. While many of us MacRumors regulars are quite familiar with the FoxConn/Shenzhen nexus that fills our Targets and Best Buys with electronic gizmos - I'm not sure that knowledge is widely appreciated by consumers in general. And I think its at least worthwhile having a conversation about why the jobs that Apple, and so many other companies, have created are in China, as opposed to California or Texas. That it is not simply a matter of dirt-cheap labor rates, but in fact the issues of logistics and flexibility play at least as big a role in Apple's decisions. If we, as consumers and voters, don't understand the basic issues involved, we are hardly going to be in a position to make informed decisions about them.

I certainly don't kid myself that Apple is a charitable institution. What I'm confused about is why so many people think that it should be.

 

[ixodes]

Its hilarious, this has been going on for decades in China, and now its a problem? Old old news.

Precisely!

That's just one more reason that Apple is guilty turning a blind eye, and of blatant profit taking.

This as opposed to spending their money to build factories in the US which would provide jobs for those in the country Apple calls home.

As far as many of the uniformed and unrealistic comments here in the forum, one must remember the demographic. Young people with very little life experience, college graduates with no real world business experience, and those cult members that just plain worship Apple.

Take note, I am NOT addressing everyone in this forum, but simply those whose unrealistic regurgitation of what Apple says, or what they have read in one single article is the basis for their "knowledge".

Those members of this great forum that are wise, educated, level headed and possess a measure of common sense, are not making posts that are so far off the mark.

Everyone's an expert, yet few have a good solution other than to defend Apple, or say Apple is not the only one using Foxconn, or other weak excuses.

The bottom line is that it's high time to make a change.

Apple prides itself in portraying an image as the "Think Different" company, well let's see them put their money on the line and do something for the USA.

No one has more money, more skill and more expertise in this field than Apple. Instead of a "Space Ship" tribute to Jobs massive ego, why not build a suitable campus in Cupertino and choose an American City to revitalize with state of the art manufacturing plants as the Japanese have shown us is possible.

If the ever so stubborn and proud Germans, like Mercedes Benz, can admit they admire Toyota and follow suit, so can Apple.

Thousands and thousands of Americans now have very well paying jobs, insurance for their families, and safe working conditions, instead of unemployment, all thanks to the likes of Toyota, Honda, Subaru et al.

If one cannot understand what that's all about they have no business acting the expert.