What is wrong with the approach of the Fair Labor Association to Foxconn

The following article "Apple iPad plant conditions better than the norm" was published in the Chicago Tribune on Feb 15, 2012. The article is an interview with Auret van Heerden, a famed South African Labor Activist, who is currently head of the FLA (The Fair Labor Association). The FLA has been asked by CEO Tim Cook of Apple Corporation to investigate possible violations of Apples Fair Labor Practices by Foxconn and other Chinese corporations that have contracted with Apple Corporation to produce iPads and iPhone. At this time, I have no doubt that Auret van Heerden is well meaning and knowledgeable about many aspects of working conditions in China and elsewhere. However, i have serious concerns about his comments as quoted below. I have inserted my thoughts in red after his comments below, which are in black.

Peter L. Schnall

Professor of Medicine, U. of California at Irvine

Apple iPad plant conditions better than the norm - Chicago Tribune 

Working conditions at Chinese manufacturing plants where Apple Inc's iPads and iPhones are made are far better than those at garment factories or other facilities elsewhere in the country, according to the head of a non-profit agency investigating the plants. 

"Far better" is not the same as "good" and certainly is not the same as healthy working conditions.  Yes, electronic assembly plants are clean and well lit. Textile firms don't have these requirements. Anyone who has watched "China Blue," the DVD that documents conditions in a China blue jean manufacturing plant knows that conditions in many Chinese factories are very close to slave labor. 

The Fair Labor Association (FLA) is beginning a study of the working conditions of Apple's top eight suppliers in China, following reports of worker suicides, a plant explosion and slave-like conditions at one of those suppliers, Foxconn Technology Group.

If FLA is just beginning a study of conditions at Foxconn, why is it that the President of the FLA is making broad statements, such as conditions "are far better" before all the facts are in?  There are many aspects of the work environment that are not detectable by observation alone (see comments below).

Auret van Heerden, president of the FLA offered no immediate conclusions on the working conditions, but he noted that boredom and alienation could have contributed to the stress that led some workers to take their own lives.

Well, it is hard to imagine how workers putting in 80-hour work weeks would only be bored. Exhausted maybe. I can understand "alienated" as it very hard to imagine putting in 12 hour workdays - 7 days a week - in a job with few breaks and no opportunity to talk with one's co-workers and not be alienated. In fact, the production line at Foxconn is a classic example of an alienated (cause (someone) to feel isolated or estranged) job. A sincere thank you to Auret van Heerden for acknowledging the possibility that the suicides at Foxconn may be work-related.

In addition to Foxconn, FLA investigators will later visit facilities of Quanta Computer Inc, Pegatron Corp, Wintek Corp and other suppliers, who are notoriously tight-lipped about their operations.
After his first visits to Foxconn, van Heerden said, "The facilities are first-class; the physical conditions are way, way above average of the norm."

Well, maybe yes, if we are referring to just the physical environment which after all is designed for electronics assembly (sterile, clean, well-lit, etc). But there are other aspects of the job that are physical including standing in one place for 12 hours a day. There are numerous reports of workers developing swollen legs after standing for many hours without much movement. Also there are reports of numerous repetitive motion injuries (from repeating the same task again and again) as well as burns from dealing with solder and hot electronic parts. 

He spent the past several days visiting Foxconn plants to prepare for the study. "I was very surprised when I walked onto the floor at Foxconn, how tranquil it is compared with a garment factory," he said. "So the problems are not the intensity and burnout and pressure-cooker environment you have in a garment factory. It's more a function of monotony, of boredom, of alienation perhaps."

Yes, Foxconn is not a textile plant in China, so IT may not be as hellish? But how can he know whether workers are suffering from burnout?  This is an internal emotional state assessed by a questionnaire - usually the MBI (Maslach Burnout Inventory). You cannot just look at someone and know if they are anxious, depressed or burnt out. You have to ask them.

He noted that the organization has been dealing with suicides in Chinese factories since the 1990s. So young people are committing suicide in plants all over China not just at Foxconn. This undermines the argument made by a number of apologists for Apple that the prevalence of suicides at Foxconn is no different than the population as a whole. This argument ignores the clustering of cases among young people. It does make sense that young people coming from farms or being forced off farms, confronted with horrendous working conditions (despite higher earnings than they had previously) might develop despair, especially if they lose hope that conditions will improve in the future.

"You have lot of young people, coming from rural areas, away from families for the first time," he said. "They're taken from a rural into an industrial lifestyle, often quite an intense one, and that's quite a shock to these young workers.
"And we find that they often need some kind of emotional support, and they can't get it," he added. Factories initially didn't realize those workers needed emotional support."
Van Heerden dismissed the notion that his organization might paint a cursory and positive picture of Apple's suppliers.

But he already has been cursory by making comments without collecting all his facts. One thing seems clear to date about FLA and Apple Corporation, they appear to believe that 80-hour work weeks are not extraordinary. (Western countries have struggled for 100 years to arrive at a 35-40 hour workweek). Also neither Auret van Heerden nor Tim Cook have yet evidenced any knowledge of 1) the negative health impact that long work days and work weeks has on health, or 2) awareness of the impact that workplace psychosocial factors such as job strain, effort reward imbalance, social isolation, lack of social support from supervisors and co-workers have on mental and physical well being (see our website "Unhealthy Work" for much more on these noxious workplace exposures).



Companies that join the FLA abide by rigorous commitments, and their interests are balanced by non-governmental organizations and more than 200 universities that sit on the board of the organization with the corporations, he said,
FLA evolved from a group originally convened by U.S. President Bill Clinton in 1996 with the goal of reducing sweatshop labor around the world. Its board includes executives from sneaker companies Nike and Adidas. "Apple didn't need to join the FLA," he said. "The FLA system is very tough. It involves unannounced visits, complete access, public reporting”.

This is an excellent point but it is incomplete. Surprise visits focus attention on dangerous environments, underage workers, etc but ignores work organization and long work hours, as issues. But still – my hats off to Apple – they are moving in the right direction by asking for outside help.

It is a shame that the “outside help” aren’t more cautious with their statements about the quality of working conditions and we can only hope they are informed about the full range of workplace surveillance tools available to assess working conditions. "If Apple wanted to take the easy way out there were a whole host of options available to them," he added. "The fact that they joined the FLA shows they were really serious about raising their game."


RESPONSES ENTERED ON IPADS 

Some 30 FLA staff members are visiting two Foxconn factories in Shenzhen in southern China and one in the central city of Chengdu. Each plant has about 100,000 workers, although not all work on Apple products.
Over three weeks, some 35,000 workers will be interviewed about 30 at a time to answer questions anonymously, entering their responses onto Apple iPads.

Why are they using apple iPads? Isn't this potentially intimidating? Will workers not believe that Apple will somehow identify them and use the information provided to punish them?

Questions will include:

* how the workers were hired

* if they were paid a fee

* if they were offered and signed contracts and whether they understood them

* the condition of their dorm rooms and food

* if complaints are acted upon

* their emotional well being

These questions are ok, but they don't go far enough. What about breaks, rest time, social isolation, wages, workers perception of fairness and justice, questions about imbalances between effort and rewards. Promotions, job security, etc. Finally, at least one open ended question so workers can mention something not in already covered. These are the kind of items that any U.S. researcher would want to collect.

The data will be uploaded immediately and consolidated, and an interim report will be made public in early March. The eventual FLA report will identify areas the suppliers need to improve and offer suggestions, van Heerden said, "There might not be a clear policy on hiring, that could lead unwittingly to discrimination against hepatitis B sufferers," he said as an example, "There might not be adequate documentation that could lead to the risk that workers get hired with fake documentation, that underage workers come in . We can recommend very specific actions they can take.

Finally, my colleague Paul Landsbergis writes to me upon reading the above, “The biggest problem with the article is that it assumes that the FLA will make a difference. It has not made much of a difference since it was founded. The only way that working conditions will change is when the workers get the right to organize and collectively bargain. Anything else will be a sham”.

Letter from Li Qiang, Director of China Labor Watch to Tim Cook

To our readers,  

Below we are printing the letter from Li Qiang, Director of China Labor Watch to  Mr. Tim Cook, CEO at Apple Corporation concerning working conditions and the health of workers at Foxconn Corporation, a supplier of Apple iPads and iPhones. China Labor Watch is one of the foremost authorities on working conditions in China, a country with a seriously under-developed occupational health and safety infrastructure. China also appears to have little commitment to improving the  conditions of working people in China. In a subsequent blog this coming week we  will expand on the issues raised in the letter from Li Qiang to Apple.  

Peter Schnall and Erin Wigger

“Dear Mr. Cook,

…Although the international anti-sweatshop movement has recently trained its focus on Apple's supply chain, I find that the labor conditions in Apple's Chinese supplier factories are actually not the worst of the factories used by multinational electronics companies there.

However, this is what "not the worst" means for workers in the factories that make your products:

 - They have to work as long as 11 hours a day, 7 days a week with only one hour-long break during lunch. For this they only make about 2000 RMB a month, which at current exchange rates is only $320.

 - Those that work in the iPad case polishing workshop are exposed to vast amounts of aluminum dust and may be injured or even killed in an explosion should the dust ignite. This has happened twice in the past year. First, in May 2011 at a Foxconn plant in Chengdu (3 killed, 15 injured) and then in December 2011 at a Foxconn plant in Shanghai (61 injured).

 - At the factories of Foxconn, one of your largest suppliers, 13 workers committed suicide in 2010. Foxconn's response of putting up nets on factory buildings to catch suicidal jumpers indicates that it believes this is an ongoing concern, since many of the environmental factors that may have led to the workers taking their lives -- including long working hours, social isolation and loss of agency -- remain unchanged.

As a result, that Apple's suppliers aren't the worst in the Chinese electronics industry probably says more about other Chinese factories than it does about the ones your company uses. 

As you said in your letter of January 26th to Apple's employees, Apple has done more recently to improve these conditions, having disclosed its full list of supplier factories, made efforts to "inspect more factories" and "educate workers about their rights" and even "opened our supply chain for independent evaluations by the Fair Labor Association." This assumes that the problem is with Apple's suppliers, rather than with Apple itself. However, there are still two big questions that Apple needs to answer before it can truly claim that this is the case.

First, how can a company that claims to make working conditions a priority make such astronomical profits at a time when those making its products are obviously suffering? Recently, Apple has seen its profitability soar to new heights. In the first quarter of the 2012 fiscal year, Apple made $46.33 billion in revenue and made a net profit of $13.06 billion, its largest profit ever and one of the largest quarterly profits of any American company in history. And you, personally, received stock options worth $380 million shortly afterwards. Let's do some simple math. The $13.06 billion net profit Apple made in one single quarter is equal to the combined salary of 300,000 workers at Foxconn's assembly line over the course of eleven years. And the value of your options alone could pay for those 300,000 workers' salaries for that extremely profitable quarter. And remember, those workers have to work 240 hours a month or more and some workers are required to stand all day long without a restroom break.

Second, how can a company with as much control over its manufacturing process as Apple has not already know what labor conditions are like in its supply chain? From our research, the production processes (and by extension, the intensity of the work that employees have to perform) at supplier factories have been approved by Apple. Apple's quality controls mean that only those who meet the standards Apple design can get a production order. The raw materials the factories use have to be purchased from the suppliers Apple designates. As a result, most supplier factories manufacture products according to Apple's specific guidelines and have no ability to alter them.

We believe that the answer to these questions is that the problem is not a result of a few "bad apples," in the midst of the supply chain but is rather deeply rooted in your company's business model. It's a systemic problem resulting as much from decisions made in Cupertino, California as from those made in Chengdu, China.

We believe the most basic cause of the problems at Apple's supplier factories is the low price Apple insists on paying its supplier factories, leaving next to no room for them to make a profit. The demand for astronomically high production rates at an extremely low price pushes factories to exploit workers, since it is the only way to meet Apple's production requirements and make its factory owners a profit at the same time.

To be fair, Apple's problems are not unique. They are faced by the entire electronics industry and its customers as they attempt to manage a global manufacturing system that locates factories wherever the cost of production is cheapest. The key choice Apple has to make as a company is whether it will try to shift the attention of journalists and the public towards the individual factories that make their products, or will sincerely acknowledge its responsibility for these factories' deplorable working conditions and make systemic changes to its supply chain.

Over the years, China Labor Watch has sent many letters to Apple about our investigations of its Chinese supplier factories, hoping that we could work together to find a way to solve the problems workers face. But Apple has never responded. However, we now feel that perhaps the time for analysis has ended. There is a simple solution for the problems we have observed in Apple's supply chain. And it doesn't even involve raising the prices on the American consumer who buys its products. It is simply sharing a larger proportion of Apple's sizable profits with the supplier factories it contracts with, and by extension, the people who make its products. And perhaps if Apple's customers no longer have to worry about the ethical implications of buying an iPhone, it will be able to go on to earn even more in the future.

Sincerely,

Li Qiang

Founder and Director, China Labor Watch

Response to Foxconn Workers Threaten Mass Suicide Post

By Ellen Rosskam, Ph.D., MPH, Center for Social Epidemiology’s European Associate

The conditions described by workers at Foxconn are, unfortunately, not an isolated case. Foxconn just happens to be in the limelight right now because of recently reported worker deaths and its connection with Apple, which stands solidly behind its values of corporate social responsibility. Apple is in a similar press spotlight. Nike got the same kind of bad publicity when descriptions of its Asian sweatshops hit the Western press. Improvements in some Nike manufacturing plants were due largely to student-led movements across the USA, which threatened sales. For a vivid picture of work conditions typical in China’s manufacturing factories, watch the documentary film “China Blue.” The film documents, as an example, workers in textile manufacturing companies in China using clothespins to keep their eyes open while working, because of extreme sleep deprivation from working 18 hours/day (8 a.m. until 2 a.m.), 7 days/week. Those workers earn $0.06 (six cents) an hour, in other words $1.08/day, or $7.56/week. Workers at Foxconn on the other hand, earn $22/week - 3 times more than workers in textile factories.

More skills are required to work in tech manufacturing as compared to other industrial sectors (such as textile manufacturing) so wages will not be the same. Therefore, the focus should not be simply on wages, but the overall working conditions. While work conditions and wages are poor at Foxconn, the textile sector is even worse than the tech sector, and other manufacturing sectors are equally bad - they just haven’t been in the western press as much as Foxconn, Apple, and Nike.

It’s a positive sign that Foxconn made some response to recent worker protests and several suicides at some of their manufacturing plants (e.g. wage increase, payoffs to quit, counselors, introducing stress management programs, building safety netting around the factory.) Even so, not all of the promises made to workers were kept by the company and, the reality is that Foxconn’s responses just barely begin to deal with the working conditions in these factories.

No occupational health and safety or epidemiological data are available to assess what’s happening to workers in these plants, and no one knows what happens to sick or injured workers when they leave a company. If Apple is serious about improving working conditions in its Chinese suppliers’ factories, then its first step should be to ensure that occupational health data is collected.

Hopefully the information, training, and interventions being introduced in some of the plants will be based on state of the art knowledge and practice. For example, stress management programs being implemented by Foxconn aim to teach individual workers skills to cope with existing conditions. Unfortunately, these programs do not aim to change the causes of the stress, which includes excessively long work hours. Moreover, individual stress management programs have been demonstrated to yield more positive results when accompanied by structural changes in the organization of work.

If Management asks “where to begin?” the easiest starting point is to ask workers their priorities for change. Easy-to-use, low-cost tools and solutions exist, e.g. Barefoot Research: A Workers’ manual for organizing on work security[1] and Ergonomic checkpoints: Practical and easy-to-implement solutions for improving safety, health and working conditions.[2]

China needs, as a country, an occupational health system capable of monitoring the working conditions of its people. In addition, they need a solid social protection system that is proactive and prevention oriented. This system needs to be able to provide for the needs of workers who are no longer capable of performing in China’s modern workplaces.

[1] Barefoot Research: A Workers’ manual for organising on work security, M. Keith, J.Brophy, P. Kirby, E. Rosskam, ILO (Geneva), 2002 -- Mandarin and Cantonese versions are available from the Hong Kong Workers’ Health Center,

[2] Ergonomic checkpoints: Practical and easy-to-implement solutions for improving safety, health and working conditions, K. Kogi, I. Kuorinka, et al., ILO (Geneva), 1996 (2^nd printing 2011) -- also available in Mandarin.

Apple Explains: Two letters from Apple’s CEO Tim Cook outlining Apple’s efforts to improve working conditions in its supplier’s factories

by Peter Schnall

I am providing readers with the full content of the letters written this past two weeks by Apple CEO Tim Cook. The first letter accompanied the Apple Annual Report on Supplier Responsibility and the 2^nd is a general response to criticism directed at Apple this past two weeks as more details about working conditions in China and in specific Apple Suppliers in China have emerged in the press. In my next blog I will address some of the inconsistencies and problems with the content of the two letters written by Tim Cook.

Tim Cook’s First Letter: Released to accompany Apple’s 2012 Annual Supplier Responsibility Progress Report.

Team,

We’ve just released our sixth annual update on conditions in Apple’s supply chain, and I want to personally share some of the results with you.

We insist that our manufacturing partners follow Apple’s strict code of conduct, and to make sure they do, the Supplier Responsibility team led more than 200 audits at facilities throughout our supply chain last year. These audits make sure that working conditions are safe and just, and if a manufacturer won’t live up to our standards, we stop working with them.

Thanks to our supplier responsibility program, we’ve seen dramatic improvements in hiring practices by our suppliers. To prevent the use of underage labor, our team interviews workers, checks employment records and audits the age verification systems our suppliers use. These efforts have been very successful and, as a result, cases of underage labor were down sharply from last year. We found no underage workers at our final assembly suppliers, and we will not rest until the number is zero everywhere.

We’ve also used our influence to substantially improve living conditions for the people who make our products. Apple set a new standard for suppliers who offer employee housing, to ensure that dormitories are comfortable and safe. To meet our requirements, many suppliers have renovated their dorms or built new ones altogether.

Finding and correcting problems is not enough. Our team has built an ambitious training program to educate workers about Apple’s code of conduct, workers’ rights, and occupational health and safety. More than one million people know about these rights because they went to work for an Apple supplier. Additionally, Apple offers continuing education programs free of charge at many manufacturing sites in China. More than 60,000 workers have enrolled in classes to learn business, entrepreneurial skills or English.

Finally, we are taking a big step today toward greater transparency and independent oversight of our supply chain by joining the Fair Labor Association. The FLA is a leading nonprofit organization dedicated to improving conditions for workers around the world, and we are the first technology company they’ve approved for membership. The FLA’s auditing team will have direct access to our supply chain and they will report their findings independently on their website.

No one in our industry is driving improvements for workers the way Apple is today. I encourage you to take some time to read more about these efforts, so that you can be as proud of Apple’s contributions in this area as I am. The details are online now at apple.com/supplierresponsibility.

Tim”

Tim Cook’s Second Letter: In response (?) to the recent NY Times article of January 25^th (there were a lot of other critical articles). 

Here is the link to the NY Times article: http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-china.html?pagewanted=all

“Team,

As a company and as individuals, we are defined by our values. Unfortunately some people are questioning Apple’s values today, and I’d like to address this with you directly. We care about every worker in our worldwide supply chain. Any accident is deeply troubling, and any issue with working conditions is cause for concern. Any suggestion that we don’t care is patently false and offensive to us. As you know better than anyone, accusations like these are contrary to our values. It’s not who we are.

For the many hundreds of you who are based at our suppliers’ manufacturing sites around the world, or spend long stretches working there away from your families, I know you are as outraged by this as I am. For the people who aren’t as close to the supply chain, you have a right to know the facts.

Every year we inspect more factories, raising the bar for our partners and going deeper into the supply chain. As we reported earlier this month, we’ve made a great deal of progress and improved conditions for hundreds of thousands of workers. We know of no one in our industry doing as much as we are, in as many places, touching as many people.

At the same time, no one has been more up front about the challenges we face. We are attacking problems aggressively with the help of the world’s foremost authorities on safety, the environment, and fair labor. It would be easy to look for problems in fewer places and report prettier results, but those would not be the actions of a leader.

Earlier this month we opened our supply chain for independent evaluations by the Fair Labor Association. Apple was in a unique position to lead the industry by taking this step, and we did it without hesitation. This will lead to more frequent and more transparent reporting on our supply chain, which we welcome. These are the kinds of actions our customers expect from Apple, and we will take more of them in the future.

We are focused on educating workers about their rights, so they are empowered to speak up when they see unsafe conditions or unfair treatment. As you know, more than a million people have been trained by our program.

We will continue to dig deeper, and we will undoubtedly find more issues. What we will not do — and never have done — is stand still or turn a blind eye to problems in our supply chain. On this you have my word. You can follow our progress at apple.com/supplierresponsibility .

To those within Apple who are tackling these issues every day, you have our thanks and admiration. Your work is significant and it is changing people’s lives. We are all proud to work alongside you.

Tim”

Foxconn workers threaten mass suicide in response to terrible working conditions

by Erin Wigger and Peter Schnall

Foxconn (which manufactures iPhones and iPads for Apple) has experienced a number of suicides in the last two years – 14 to date, as well as a number of  unsuccessful attempts. The company responded by raising wages 66% at it’s Shenzen plant, boosting its number of counselors, and making stress management programs available to workers there. It also built safety netting around the factory to prevent further suicide attempts and required that all employees sign a “no suicide” clause in their contract (effectively preventing further payouts to families in the event of a death by suicide). Foxconn also responded with claims that it’s number of suicides, per capita, are not much higher than China’s national average - implying the suicides are not the result of conditions at the manufacturing plant.

However, on January 2^nd approximately 150 workers took to the roof of Foxconn’s factory in Wuhan threatening mass suicide if their demands for better pay were not met. The New York Times reports that workers involved in the protest made accused Foxconn of reneging on the salary initially offered workers agreeing to leave the Wuhan factory - paying only a third of the previously proposed salary - and cited unfair treatment at the plant as the reason for their protest. (Recall the many stories that have appeared in the press of the oppressive working conditions at Foxconn with workers reporting excessive work weeks of 72 hours or more, militaristic supervision, low wages, and company induced indebtedness that have prevented many workers from leaving it's factories.) 

A protest of this nature is shocking. It is hard to condone this type of negotiation or to imagine it is anything but counter-productive in terms of entering into a legitimate dialogue between employers and employees. So what drove it into being? Is this an act of absolute desperation on the part of a collectively abused and exploited labor force, or the extremist tactics of workers trying to coerce the company into bending to their demands?

If this were the first step worker’s had made toward resolving their conflict that would be one thing. But this protest came about only after Foxconn rejected workers attempts at bargaining and issued an ultimatum: resign and receive compensation or stay and continue on the same pay scale as before. In response  to these conditions, approximately 45 employees resigned, but none received any compensation.

This underlines the fact that Chinese employees have no safety net. They do not have the avenues of recourse we, as Americans, enjoy – though these rights in the U.S. are being whittled away daily (e.g. recall the recent Wisconsin Union Bill intended to strip public workers of their collective bargaining rights). In China, Geoffrey Crathall, Director at the China Labor Bulletin, was quoted to have said “employees feel they have no other option. If there were proper channels for the resolution of grievances, they wouldn’t have needed to resort to such actions” and, after weighing the facts, it is hard to disagree. Poor working conditions and pure desperation seem to have driven these workers to the roof.

The protest ended eight hours later after workers were talked down by Foxconn managers and local Chinese Communist Party officials. It remains dubious as to whether or not the dispute over wages has been adequately settled or not.

http://www.upi.com/Business_News/2012/01/11/Mass-suicide-threatened-at-Chinese-Foxconn-factory/UPI-57621326312862/?spt=hs&or=bn 

http://www.nytimes.com/2012/01/13/technology/foxconn-resolves-pay-dispute-with-workers.html?_r=3&pagewanted=all

http://www.businessweek.com/news/2012-01-13/foxconn-workers-at-southern-china-plant-protest-redeployment.html

http://www.digitaltrends.com/international/mass-suicide-threat-at-foxconn-factory/

What a Surprise: Apple Profit Margins Rise at the Expense of Foxconn and Pegatron Corporation

Bloomberg reports in an article today that Apple's margins have widened at the expense of its main supplier as Foxconn Technology Group cuts prices to retain orders for the iPhone and iPad.

The profit spread at Hon Hai Precision Industry, Foxconn's Taipei-listed flagship, has narrowed to 1.5 percent since the debut of the iPhone in June 2007 as Apple's operating margin more than doubled over the past five years, surpassing 30 percent.

Apparently, Foxconn as well as Pegatron are willing to sacrifice profit margins in exchange for volume and scale.  Both companies have seen profit margins decline despite increase sales due to rising salaries and lower sale prices to Apple Corp. on Ipads and Iphones.

This process puts both companies under increasing pressure to get more from workers for less. So if salaries go up it becomes critical to increase worker productivity.

Maybe this has something to do with repetitive motion disorders, stress disorders, suicides and explosions at plants not ready for production but which are pressed into service nonethless (see my previous blog).

See http://www.bloomberg.com/news/2012-01-04/apple-profit-margins-rise-at-foxconn-s-expense.html for more information.

Another explosion reported in a Chinese Manufacturer that supplies Apple

For the third time in little over a year an explosion has rocked a factory that supplies parts in the manufacturing of various Apple devices. The explosion injured 61, and sent 23 to the hospital. Fortunately, there were no fatalities. 

This particular plant (which supplies back panels needed in the manufacturing of IPads), according to Pegatron Chief Financial Officer Charles Lin, “…had not started operations yet. Part of the facility is still under pre-operation inspection and part is running trial production.” ¹ 

Chinese suppliers are under tremendous pressure from Apple to increase supply to keep up with worldwide demand for IPhones and IPads. Manufacturing the aluminum shells is, admittedly, not without risk. The shells need to be polished and the powder used in this process is potentially explosive - requiring a factory environment with adequate ventilation. Still, providing such an environment is not rocket science.

It is not hard to see that under pressure to increase production companies are cutting corners. In this case, a plant which has not yet “started operations” has already experienced an explosion injuring 61 people.

Who is responsible for this (preventable) disaster? Is it the company which rushed, recklessly, into trial production a facility not yet ready for prime-time, the Chinese government with its lax supervision of various regulations (or perhaps no regulations at all), or is it Apple computer corporation which turns a blind eye to the practices of its suppliers so that they may sell a million or so more iPhones and IPads. Apple Corporation made $7.31 billion dollars in profits in their 3^rd Qtr. 2011 financial year alone.

Perhaps there are others who deserve mention.  Please share your take on this tragedy.

Peter Schnall

¹ “Apple supplier Pegatron hit by China plant blast” By Clare Jim and Argin Chang, Reuters.