China’s Foxconn and Apple – a match not quite made in heaven

Although I have visited a number of factories in China I’ve never had the opportunity to visit the giant Foxconn factories which are located in several different parts of China. Foxconn is actually a Taiwanese company as an affiliate of Hon Hai Precision Industry. Yesterday (Thursday) Apple Inc. agreed that it would work with its partner Foxconn to improve wages and working conditions at the factories where iPads, iPods, and iPhones (among other products) are made – http://www.msnbc.msn.com/id/46896890

The independent Fair Labor Association claims that the results of their probe ends up being good for Foxconn, good for Apple and not least importantly – good for the factory workers themselves. Foxconn has more than 1.2 million workers. Does this mean that popular products made by Apple will become more expensive? Probably but keep in mind that labor costs are only a small part of the total cost of Apple devices made in China. Other companies such as H-P, Amazon, and Sony will all face similar changes and possible price increases.

When I have visited factories in China I cannot ever recall being appalled by the working conditions. That may just be my particular experience and not indicative of things in general. The factory buildings are inelegant and utilitarian. South China, where the city of Shenzhen is located, is very warm for much of the year and there are areas in the factories that are not air conditioned. In fact the Chinese are cost conscious and therefore energy saving conscious. Many offices only have room air conditioners (no central A/C) which are left off when the rooms are not in use. I recall many meetings in a room with temperatures in the mid-80F range when the meeting began. We all were sweating but by the end of the meeting the temperature was a more bearable 75F which somehow felt really cool. But on the factory floor there were fans everywhere and while it was warm it was not uncomfortable and the employees seemed to not be bothered at all.

The probe centered a great deal on the amount of hours Foxconn factory workers were working. What was interesting to me is that during peak production, workers put in more than 60 hours a week on average. Apparently they were paid overtime for additional hours over what they signed on for. Since many of the workers travel far distances to work in factories in order to earn money, they live on the premises in dormitories during the week and some even on the weekends if they live too far away to travel back and forth. It’s possible that those workers counted on the overtime as often is the case here in the United States. But Apple acknowledging that it can play a part in making working conditions better for Foxconn’s employees is a positive development overall.

As China’s economy continues to grow and standards of living continue to improve, it will become more important for Chinese factories to provide technological solutions to problems and challenges and not just bodies. There are now new places in the world that can offer labor costs less expensively than China. Yet since the worker cost in a device like an iPad is small, the likelihood of moving production out of China is not as imminent as some people might like to believe. Accordingly the uneasy marriage between Foxconn and Apple will be around for quite a while yet.

Do you feel Chinese factory workers are being treated unfairly? And if so on what basis do you make that assertion?

About markkolier

Futurist, entrepreneur, left lane driver
This entry was posted in Best business practices, Customer Experiences, Living in the World Today and tagged , , , , , , , , . Bookmark the permalink.

2 Responses to China’s Foxconn and Apple – a match not quite made in heaven

  1. Dwight Wilbanks says:

    So many of the people that I’ve talked to about the workers conditions have no idea how good these jobs are, compared to the alternatives. The workers in the factory without air conditioning, and in the dormitories didn’t have electricity and pluming at the place they left to get the job.

    That does not mean Foxconn does not do things that it needs to start doing differently, but, in general, when hiring day comes, the line is very, very long to have the opportunity to get those jobs. The reason the line is long, because its a good job.

    Like

    • markkolier says:

      Thanks Dwight,

      Coming from you living in China your view is both interesting and important. If Tim cook has decidee he wishes to distinguish himself by attending to something Steve Jobs showed little interest in (getting angry about it is hardly DOING something) I think that’s a positive step. But there are miles (or kilometers) yet to go.

      Like

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