As I told you a while back, Apple hired the Fair Labor Association to carry out investigations to ensure that their contractor Foxconn runs their plants in a safe and ethical manner. The Fair Labor Association (FLA) is a nonprofit organization dedicated to ending sweatshop conditions in factories worldwide. It is made up of universities and nonprofit groups, along American companies that have offshored parts of their global supply chains to countries like China, Indonesia and Vietnam. Well, the FLA published its report on Apple’s contractor Foxconn last week, and let’s just say they that apparently there is a little room for improvement.
Last week the New York Times published an article regarding the FLA report and Foxconn’s pledges to do better regarding the working conditions in their factories. According to the Times, the FLA “found widespread problems— including at least 43 violations of Chinese laws and regulations, and numerous instances where Foxconn defied industry codes of conduct by having employees work more than 60 hours a week, and sometimes more than 11 days in a row.” In order to prepare the report, the FLA surveyed 35,000 Foxconn employees and inspected factories where Foxconn makes Apple products. Almost two-thirds of the workers interviewed said their compensation “does not meet their basic needs” and many workers had a sense that their place of employment was a dangerous place to work.
But not to worry. Foxconn has pledged to cut hours and increase wages. According to the Times, Foxconn has committed that by July of 2013, no worker will labor for more than 49 hours per week — the limit set by Chinese law. Since Foxconn operates in China, I wonder why they don’t have to comply with Chinese law now? According to the Times, complying with this law and other things Foxconn is pledging to do is going to force them to increase prices to Apple. This may raise the price of your iProducts unless Apple is willing to lower its profit margins. What do you think the odds are on that happening?
And what do you think the odds are that Foxconn will follow through with its commitments? It seems, in 2006, Apple said that Foxconn “has enacted a policy change to enforce the weekly overtime limits set by our Code of Conduct.” According to the Times, Foxconn’s policy change did not lead to Foxconn complying with Chinese law or Apple’s regulations. If at first you don’t succeed, try, try again I guess.
But I think the saddest part of the article was what the Times reported was Foxconn’s practices regarding earlier audits. According to the Times, the FLA found “that Foxconn in the past prepped workers with answers to give to monitors to avoid detection of violations.” “We found a cheat sheet,” said Mr. van Heerden. “If you’re asked how many hours you work, say this, for instance. Since we’re not asking the questions that conventional auditors ask, we were able to see what’s really going on.” Hmm, I guess I am not quite so confident as Mr. van Heerden.
Don’t get me wrong, I bet it is tough to be a watchdog in a foreign country. I have a simpler idea. Apple should bring assembly of its iProducts back home. “Engineered in California, assembled in Oregon.” Or Ohio, Idaho, Texas, who knows. I think this is a no brainer, but it all gets back to that pesky profit margin mentioned in this latest Times article. As this article amply demonstrates, Apple is in China for its cheap labor, labor that is hired by Foxconn. The minute that labor gets more expensive, things gotta change; if Foxconn has to start raising wages for its iProduct assemblers, either the price of the iProduct must rise, or if the price is to stay the same, Apple’s margin must drop. Strange how this Times article about Apple, unlike an earlier one, didn’t blather on about China’s supernatural supply chains being the reason Apple has Foxconn make its products in China. I wonder why? Could it be because they finally figured out that there has never really been much of an iProduct supply chain in China? Let’s hope so.