apple foxconn case study

Case Study: Apple Inc. (China)

The electronics industry is one of the largest sectors in the global economy and some experts estimate that the sector employs more workers and create more revenue than any other industry in the world. The US consumer electronics industry alone is worth more than $211 billion, and technology and electronics companies top the list of Forbes’ ranking of the world’s most valuable brands. It is an industry that is both immensely profitable and harshly exploitative, and nowhere is this more evident than in the supply chain of Apple Inc. In 2017, the company was worth an estimated $170 billion, making it the world’s most valuable brand.

Foxconn, one of the Apple’s largest suppliers, installed nets after a spate of suicides at its factories in China. Credit: Jason Lee, Reuters.

Despite the vast sums of money at the top of Apple’s supply chain, the workers that make its products face a myriad of abuses: poverty wages, excessive and unpaid overtime well in excess of legal limits, long-term exposure to toxic chemicals without proper protective equipment, unsafe work environments including blocked and locked exits, intense psychological pressure, and the use of forced student labor. The long hours, extremely low pay, and high-pressure work environment led to a spate of suicides, beginning in 2010, by workers at Foxconn, one of Apple’s most important suppliers. In the span of a year, there were at least 18 attempted suicides, resulting in at least 14 deaths. (Foxconn’s shockingly cruel solution to this problem was to install nets around its buildings to prevent workers from jumping, demonstrating just how little the manufacturer and its customers cared about the conditions that workers faced). Between 2010 and 2012, another six workers were killed in explosions at iPad factories. According to reporting by the New York Times, Apple had been warned about the dangerous conditions inside at least one of the factories, but did nothing to prevent the deadly blast.

Amidst mounting pressure from consumers to address the problems in its supply chain, Apple joined the Fair Labor Association (FLA), a multi stakeholder initiative (MSI) that was originally founded to monitor conditions in the apparel industry but that has since expanded to other sectors, including footwear, sporting goods and agriculture. Although the FLA describes itself as an independent monitoring body, member companies play a significant role in the organization’s governance and its funding. As a result, the FLA has an abysmal track record when it comes to improving conditions in the supply chain of its member companies and Apple was no exception. Mere days after beginning its inspection of Apple’s largest supplier, Foxconn, the president of the FLA declared that the “facilities are first-class” and “Foxconn is really not a sweatshop.” Recall that Foxconn is the same supplier in which more than a dozen workers committed suicide just two years earlier, and where three workers had been killed in a factory explosion the prior year.

Six weeks after Apple announced that the FLA would be investigating its supply chain, the FLA published a report detailing a number of egregious abuses, many of which were also violations of Chinese law. It’s worth noting here that virtually all of these findings had previously been reported by independent investigators that Apple had simply chosen to ignore. Although Apple, Foxconn and the FLA publicly committed to fixing the violations, outside assessments showed little improvement. An independent evaluation of the FLA’s own reporting showed the following:

• Apple and its suppliers failed to implement changes to workers’ pay, including compensation for unpaid overtime and adoption of a wage that would cover workers’ basic needs. During the same time period, Apple reported earning nearly $50 billion in profits;
• Despite promises to the contrary, workers in Apple’s supply chain in China continued to work overtime hours in violation of legal limits;
• The promise to “establish a genuine voice for workers” was never fulfilled;
• Although Apple promised that “the FLA’s assessment will cover facilities where more than 90 percent of Apple products are assembled,” the FLA’s reporting covered less than 20% of workers in Apple’s supply chain; and
• Outside data demonstrated that serious labor rights abuses were continuing throughout the company’s supply chain.

It should come as no surprise that workers benefitted very little from Apple’s participation in the FLA. As is frequently the case with a brand’s decision to join an MSI, Apple approached the FLA not out of a genuine concern for the workers’ in its supply chain (Apple had known about egregious abuses at its factories for years), but out of a desire to repair the damage being done to its brand, the most valuable in the world. In exchange for its less-than-critical reporting, the FLA received a sizable fee. Unfortunately, this quid-pro-quo arrangement is all too common in the world of MSI’s, where, absent serious and meaningful changes to structure, governance, enforcement and funding, respect for workers’ rights will always be an afterthought instead of a reality.

In recent years, public attention has waned but workers continue to report serious human rights abuses in Apple’s supply chain. See, for example, the following reports: Apple still has miles to go despite the recent toxins ban , Apple making big profits but Chinese workers’ wages on the slide , and Blood and Sweat Behind the Screen of iPhones – Another Investigative Report on Apple’s Largest Display Screen Supplier .

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After the Foxconn Suicides in China: A Roundtable on Labor, the State and Civil Society in Global Electronics

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Life and death in Apple’s forbidden city

In an extract from his new book, Brian Merchant reveals how he gained access to Longhua, the vast complex where iPhones are made and where, in 2010, unhappy workers started killing themselves

T he sprawling factory compound, all grey dormitories and weather-beaten warehouses, blends seamlessly into the outskirts of the Shenzhen megalopolis. Foxconn’s enormous Longhua plant is a major manufacturer of Apple products. It might be the best-known factory in the world; it might also might be among the most secretive and sealed-off. Security guards man each of the entry points. Employees can’t get in without swiping an ID card; drivers entering with delivery trucks are subject to fingerprint scans. A Reuters journalist was once dragged out of a car and beaten for taking photos from outside the factory walls. The warning signs outside – “This factory area is legally established with state approval. Unauthorised trespassing is prohibited. Offenders will be sent to police for prosecution!” – are more aggressive than those outside many Chinese military compounds.

But it turns out that there’s a secret way into the heart of the infamous operation: use the bathroom. I couldn’t believe it. Thanks to a simple twist of fate and some clever perseverance by my fixer, I’d found myself deep inside so-called Foxconn City.

It’s printed on the back of every iPhone: “Designed by Apple in California Assembled in China”. US law dictates that products manufactured in China must be labelled as such and Apple’s inclusion of the phrase renders the statement uniquely illustrative of one of the planet’s starkest economic divides – the cutting edge is conceived and designed in Silicon Valley, but it is assembled by hand in China.

The vast majority of plants that produce the iPhone’s component parts and carry out the device’s final assembly are based here, in the People’s Republic, where low labour costs and a massive, highly skilled workforce have made the nation the ideal place to manufacture iPhones (and just about every other gadget). The country’s vast, unprecedented production capabilities – the US Bureau of Labor Statistics estimated that as of 2009 there were 99 million factory workers in China – have helped the nation become the world’s second largest economy. And since the first iPhone shipped, the company doing the lion’s share of the manufacturing is the Taiwanese Hon Hai Precision Industry Co, Ltd, better known by its trade name, Foxconn .

Foxconn is the single largest employer in mainland China; there are 1.3 million people on its payroll. Worldwide, among corporations, only Walmart and McDonald’s employ more. As many people work for Foxconn as live in Estonia.

Today, the iPhone is made at a number of different factories around China, but for years, as it became the bestselling product in the world, it was largely assembled at Foxconn’s 1.4 square-mile flagship plant, just outside Shenzhen. The sprawling factory was once home to an estimated 450,000 workers. Today, that number is believed to be smaller, but it remains one of the biggest such operations in the world. If you know of Foxconn, there’s a good chance it’s because you’ve heard of the suicides. In 2010, Longhua assembly-line workers began killing themselves. Worker after worker threw themselves off the towering dorm buildings, sometimes in broad daylight, in tragic displays of desperation – and in protest at the work conditions inside. There were 18 reported suicide attempts that year alone and 14 confirmed deaths. Twenty more workers were talked down by Foxconn officials.

The epidemic caused a media sensation – suicides and sweatshop conditions in the House of iPhone. Suicide notes and survivors told of immense stress, long workdays and harsh managers who were prone to humiliate workers for mistakes, of unfair fines and unkept promises of benefits.

The corporate response spurred further unease: Foxconn CEO, Terry Gou, had large nets installed outside many of the buildings to catch falling bodies. The company hired counsellors and workers were made to sign pledges stating they would not attempt to kill themselves.

Steve Jobs, for his part, declared: “We’re all over that” when asked about the spate of deaths and he pointed out that the rate of suicides at Foxconn was within the national average. Critics pounced on the comment as callous, though he wasn’t technically wrong. Foxconn Longhua was so massive that it could be its own nation-state, and the suicide rate was comparable to its host country’s. The difference is that Foxconn City is a nation-state governed entirely by a corporation and one that happened to be producing one of the most profitable products on the planet.

A cab driver lets us out in front of the factory; boxy blue letters spell out Foxconn next to the entrance. The security guards eye us, half bored, half suspicious. My fixer, a journalist from Shanghai whom I’ll call Wang Yang, and I decide to walk the premises first and talk to workers, to see if there might be a way to get inside.

The first people we stop turn out to be a pair of former Foxconn workers.

“It’s not a good place for human beings,” says one of the young men, who goes by the name Xu. He’d worked in Longhua for about a year, until a couple of months ago, and he says the conditions inside are as bad as ever. “There is no improvement since the media coverage,” Xu says. The work is very high pressure and he and his colleagues regularly logged 12-hour shifts. Management is both aggressive and duplicitous, publicly scolding workers for being too slow and making them promises they don’t keep, he says. His friend, who worked at the factory for two years and chooses to stay anonymous, says he was promised double pay for overtime hours but got only regular pay. They paint a bleak picture of a high-pressure working environment where exploitation is routine and where depression and suicide have become normalised.

“It wouldn’t be Foxconn without people dying,” Xu says. “Every year people kill themselves. They take it as a normal thing.”

Over several visits to different iPhone assembly factories in Shenzhen and Shanghai, we interviewed dozens of workers like these. Let’s be honest: to get a truly representative sample of life at an iPhone factory would require a massive canvassing effort and the systematic and clandestine interviewing of thousands of employees. So take this for what it is: efforts to talk to often skittish, often wary and often bored workers who were coming out of the factory gates, taking a lunch break or congregating after their shifts.

The vision of life inside an iPhone factory that emerged was varied. Some found the work tolerable; others were scathing in their criticisms; some had experienced the despair Foxconn was known for; still others had taken a job just to try to find a girlfriend. Most knew of the reports of poor conditions before joining, but they either needed the work or it didn’t bother them. Almost everywhere, people said the workforce was young and turnover was high. “Most employees last only a year,” was a common refrain. Perhaps that’s because the pace of work is widely agreed to be relentless, and the management culture is often described as cruel.

Since the iPhone is such a compact, complex machine, putting one together correctly requires sprawling assembly lines of hundreds of people who build, inspect, test and package each device. One worker said 1,700 iPhones passed through her hands every day; she was in charge of wiping a special polish on the display. That works out at about three screens a minute for 12 hours a day.

More meticulous work, like fastening chip boards and assembling back covers, was slower; these workers have a minute apiece for each iPhone. That’s still 600 to 700 iPhones a day. Failing to meet a quota or making a mistake can draw public condemnation from superiors. Workers are often expected to stay silent and may draw rebukes from their bosses for asking to use the restroom.

Xu and his friend were both walk-on recruits, though not necessarily willing ones. “They call Foxconn a fox trap,” he says. “Because it tricks a lot of people.” He says Foxconn promised them free housing but then forced them to pay exorbitantly high bills for electricity and water. The current dorms sleep eight to a room and he says they used to be 12 to a room. But Foxconn would shirk social insurance and be late or fail to pay bonuses. And many workers sign contracts that subtract a hefty penalty from their pay if they quit before a three-month introductory period.

On top of that, the work is gruelling. “You have to have mental management,” says Xu, otherwise you can get scolded by bosses in front of your peers. Instead of discussing performance privately or face to face on the line, managers would stockpile complaints until later. “When the boss comes down to inspect the work,” Xu’s friend says, “if they find any problems, they won’t scold you then. They will scold you in front of everyone in a meeting later.”

“It’s insulting and humiliating to people all the time,” his friend says. “Punish someone to make an example for everyone else. It’s systematic,” he adds. In certain cases, if a manager decides that a worker has made an especially costly mistake, the worker has to prepare a formal apology. “They must read a promise letter aloud – ‘I won’t make this mistake again’– to everyone.”

This culture of high-stress work, anxiety and humiliation contributes to widespread depression. Xu says there was another suicide a few months ago. He saw it himself. The man was a student who worked on the iPhone assembly line. “Somebody I knew, somebody I saw around the cafeteria,” he says. After being publicly scolded by a manager, he got into a quarrel. Company officials called the police, though the worker hadn’t been violent, just angry.

“He took it very personally,” Xu says, “and he couldn’t get through it.” Three days later, he jumped out of a ninth-storey window.

So why didn’t the incident get any media coverage? I ask. Xu and his friend look at each other and shrug. “Here someone dies, one day later the whole thing doesn’t exist,” his friend says. “You forget about it.”

‘We look at everything at these companies,” Steve Jobs said after news of the suicides broke. “Foxconn is not a sweatshop. It’s a factory – but my gosh, they have restaurants and movie theatres… but it’s a factory. But they’ve had some suicides and attempted suicides – and they have 400,000 people there. The rate is under what the US rate is, but it’s still troubling.” Apple CEO, Tim Cook, visited Longhua in 2011 and reportedly met suicide-prevention experts and top management to discuss the epidemic.

In 2012, 150 workers gathered on a rooftop and threatened to jump. They were promised improvements and talked down by management; they had, essentially, wielded the threat of killing themselves as a bargaining tool. In 2016, a smaller group did it again. Just a month before we spoke, Xu says, seven or eight workers gathered on a rooftop and threatened to jump unless they were paid the wages they were due, which had apparently been withheld. Eventually, Xu says, Foxconn agreed to pay the wages and the workers were talked down.

When I ask Xu about Apple and the iPhone, his response is swift: “We don’t blame Apple. We blame Foxconn.” When I ask the men if they would consider working at Foxconn again if the conditions improved, the response is equally blunt. “You can’t change anything,” Xu says. “It will never change.”

Wang and I set off for the main worker entrance. We wind around the perimeter, which stretches on and on – we have no idea this is barely a fraction of the factory at this point.

After walking along the perimeter for 20 minutes or so, we come to another entrance, another security checkpoint. That’s when it hits me. I have to use the bathroom. Desperately. And that gives me an idea.

There’s a bathroom in there, just a few hundred feet down a stairwell by the security point. I see the universal stick-man signage and I gesture to it. This checkpoint is much smaller, much more informal. There’s only one guard, a young man who looks bored. Wang asks something a little pleadingly in Chinese. The guard slowly shakes his head no, looks at me. The strain on my face is very, very real. She asks again – he falters for a second, then another no.

We’ll be right back, she insists, and now we’re clearly making him uncomfortable. Mostly me. He doesn’t want to deal with this. Come right back, he says. Of course, we don’t.

To my knowledge, no American journalist has been inside a Foxconn plant without permission and a tour guide, without a carefully curated visit to selected parts of the factory to demonstrate how OK things really are.

Maybe the most striking thing, beyond its size – it would take us nearly an hour to briskly walk across Longhua – is how radically different one end is from the other. It’s like a gentrified city in that regard. On the outskirts, let’s call them, there are spilt chemicals, rusting facilities and poorly overseen industrial labour. The closer you get to the city centre – remember, this is a factory – the more the quality of life, or at least the amenities and the infrastructure, improves.

As we get deeper in, surrounded by more and more people, it feels like we’re getting noticed less. The barrage of stares mutates into disinterested glances. My working theory: the plant is so vast, security so tight, that if we are inside just walking around, we must have been allowed to do so. That or nobody really gives a shit. We start trying to make our way to the G2 factory block, where we’ve been told iPhones are made. After leaving “downtown”, we begin seeing towering, monolithic factory blocks – C16, E7 and so on, many surrounded by crowds of workers.

I worry about getting too cavalier and remind myself not to push it; we’ve been inside Foxconn for almost an hour now. The crowds have been thinning out the farther away from the centre we get. Then there it is: G2. It’s identical to the factory blocks that cluster around it, that threaten to fade into the background of the smoggy static sky.

G2 looks deserted, though. A row of impossibly rusted lockers runs outside the building. No one’s around. The door is open, so we go in. To the left, there’s an entry to a massive, darkened space; we’re heading for that when someone calls out. A floor manager has just come down the stairs and he asks us what we’re doing. My translator stammers something about a meeting and the man looks confused; then he shows us the computer monitoring system he uses to oversee production on the floor. There’s no shift right now, he says, but this is how they watch.

No sign of iPhones, though. We keep walking. Outside G3, teetering stacks of black gadgets wrapped in plastic sit in front of what looks like another loading zone. A couple of workers on smartphones drift by us. We get close enough to see the gadgets through the plastic and, nope, not iPhones either. They look like Apple TVs, minus the company logo. There are probably thousands stacked here, awaiting the next step in the assembly line.

If this is indeed where iPhones and Apple TVs are made, it’s a fairly aggressively shitty place to spend long days, unless you have a penchant for damp concrete and rust. The blocks keep coming, so we keep walking. Longhua starts to feel like the dull middle of a dystopian novel, where the dread sustains but the plot doesn’t.

We could keep going, but to our left, we see what look like large housing complexes, probably the dormitories, complete with cagelike fences built out over the roof and the windows, and so we head in that direction. The closer we get to the dorms, the thicker the crowds get and the more lanyards and black glasses and faded jeans and sneakers we see. College-age kids are gathered, smoking cigarettes, crowded around picnic tables, sitting on kerbs.

And, yes, the body-catching nets are still there. Limp and sagging, they give the impression of tarps that have half blown off the things they’re supposed to cover. I think of Xu, who said: “The nets are pointless. If somebody wants to commit suicide, they will do it.”

We are drawing stares again – away from the factories, maybe folks have more time and reason to indulge their curiosity. In any case, we’ve been inside Foxconn for an hour. I have no idea if the guard put out an alert when we didn’t come back from the bathroom or if anyone is looking for us or what. The sense that it’s probably best not to push it prevails, even though we haven’t made it on to a working assembly line.

We head back the way we came. Before long, we find an exit. It’s pushing evening as we join a river of thousands and, heads down, shuffle through the security checkpoint. Nobody says a word. Getting out of the haunting megafactory is a relief, but the mood sticks. No, there were no child labourers with bleeding hands pleading at the windows. There were a number of things that would surely violate the US Occupational Safety and Health Administration code – unprotected construction workers, open chemical spillage, decaying, rusted structures, and so on – but there are probably a lot of things at US factories that would violate OSHA code too. Apple may well be right when it argues that these facilities are nicer than others out there. Foxconn was not our stereotypical conception of a sweatshop. But there was a different kind of ugliness. For whatever reason – the rules imposing silence on the factory floors, its pervasive reputation for tragedy or the general feeling of unpleasantness the environment itself imparts – Longhua felt heavy, even oppressively subdued.

When I look back at the photos I snapped, I can’t find one that has someone smiling in it. It does not seem like a surprise that people subjected to long hours, repetitive work and harsh management might develop psychological issues. That unease is palpable – it’s worked into the environment itself. As Xu said: “It’s not a good place for human beings.”

This is an edited extract from The One Device: The Secret History of the iPhone by Brian Merchant , published by Bantam Press (£16.99). To order a copy for £14.44 go to bookshop.theguardian.com or call 0330 333 6846. Free UK p&p over £10, online orders only. Phone orders min p&p of £1.99.

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Foxconn, Apple and the partnership that changed the tech sector

The pair is basking in shared success -- and facing shared risks

PALO ALTO, U.S. For Apple, Hon Hai Precision Industry is not just a subcontractor. It is a business partner. And though both sides are taking steps to reduce their mutual dependence, their fortunes remain very much entwined.

Their ties deepened in 2000, when Foxconn Technology Group -- as Hon Hai is known -- landed an order to produce Apple's iMacs. The duo had worked together on parts production before, but this was a major turning point. Apple's high quality standards forced the Taiwanese supplier to sharpen its technological edge.

The iPhone at 10: The device that launched a thousand industries

Apple to use oled screens in all new iphones launching in 2018: sources, foxconn seeks to raise its own profile after working for others, latest on business, korean air restructuring at risk after delta takes stake: analysts, credit suisse to raise stake to 51% in chinese joint venture, blackrock aims to be a top asset manager in china, fink says, sponsored content, about sponsored content this content was commissioned by nikkei's global business bureau..

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Who's Really to Blame for Apple's Chinese Labor Problems?

The U.S. tech company would like consumers to fault Foxconn, but abuses are particular to Apple products.

Work conditions at Foxconn, an Apple supplier in China, have reignited a debate about labor regulations in the country. After a New York Times expose on the Shenzhen-based factory, more U.S. media focused on the on the issue, calling for a response from Apple executives.

Recently, Apple hired the Fair Labor Association (FLA) to investigate working conditions at Foxconn, and ABC's Nightline aired  exclusive footage from inside the factories.

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But Corporate Social Responsibility expert Richard Brubaker, Founder of Shanghai-based  Collective Responsibility ( Twitter ), says focusing on Foxconn may be missing the larger issue. Asia Blog talked to Brubaker by email.

According to the FLA, conditions are actually much better at Foxconn compared to other factories, such as textile mills, in China. How would you say the working conditions in tech companies compare to those of other factory jobs in China?

Comparing the conditions of Apple suppliers to those of textile mills is comparing Apples to cars. The labor practices of both industries have always been different, as the products are different, the equipment is different, and the margins are different. He might as well have compared Foxconn to a coal mine.

There has been a lot of focus on Apple's relationship with Foxconn. But other tech companies also use Foxconn, correct?

Were it only Foxconn, then the questions of Apple being no better than others in their industry would be valid. However, as there have been two iPad factory explosions and it was on the iTouch line of Wintek where 140 employees were hospitalized . It is important to understand that the problems are far bigger than Foxconn and are specific to the Apple supplier set.

So for me the distraction is the focus on Foxconn, not Apple, and if there is to be any real reform at all, it wil require everyone to refocus their efforts towards Apple's entire supplier set. If it only remains Foxconn, as we have seen with the recent FLA work, then there will be no real reform.

Apple does seem to be the focus of a lot of media attention.

Media focus on Apple is a result of three things:

1. Apple is behind (they are only now investing in third-party audits and building supplier inspections teams), the problems are specific to Apple (iPad factory explosions and Wintek poisoning), and Apple is defiant (always saying they hold the "highest standards").

2. Apple's model. Unlike Nokia, Motorola and others, Apple is 100 percent outsourced, so they are going to naturally be exposed to more issues.

3. Apple is the largest technology company in the world, with the strongest brand recognition, and makes a billion USD a week in profit.

To be clear, the issues of Foxconn and the issues of Apple are actually quite separate, but it is the media and Apple who are tying them together. The media, before the New York Times piece, did this because they did not understand the full breadth of the issues and had not researched the problems beyond Foxconn. Apple does this because the more that they can maintain stakeholder focus on Foxconn, the easier it will be to say that this is not just their problem (i.e., it's the industry), but that they are working hard to fix the problems (i.e., two weeks of FLA inspections at Foxconn).

In essence, by focusing on Foxconn and admitting there are problems at Foxconn, Apple is able to protect themselves. Were this story about their entire supplier network, or about the wider abuses that occur at suppliers specific to Apple (i.e., don't source to industry), then Apple would have a far bigger PR/operations problem to solve.

Chinese labor laws are much different compared to those in other countries like the United States. To what extent is this the tech brand's problem to solve? Where does Apple's responsibility end and the Chinese government's responsibility begin?

This is perhaps the most hotly debated question. Is Apple responsible for the conditions on the Foxconn line? Are they responsible for the exploding iPad factories and nHexane exposures?

In answering this question, you need to consider the following:

Legally, Apple is not (under U.S. or Chinese law) directly responsible for the conditions that exist at a supplier's site. Apple and its supporters are correct in saying that in the strictest legal sense they are not responsible. However, and this is where it gets more complicated, just because Apple is not "responsible" does not mean that it cannot be held responsible legally.

Using the Wintek case as one example, or perhaps the more recent Foxconn iPad factory explosion: If it could be proven that Apple had known that the conditions were unsafe and did not act, then there is room for legal responsibility to enter. Which is why Wintek looked to Apple for compensation, and why Apple did engage those affected. Even though no settlement has been reached.

Second to that, and separate from the concerns of labor, where Apple's legal liability (and general risk) is increasing is in the impact of these failures. At present, Apple maintains that it cannot meet market demands for its products because demand is too high. However, with two iPad factory explosions and the closure of Catcher impacting the production capacity of Apple, even though these are supplier issues, Apple's investors may (now or sometime in the future) find that the continued failures of Apple suppliers are actually a failure of Apple to act in their best interests. This would become particularly true were there to be a major supply chain failure (Chinese government shuts down Foxconn) or were there to be a consumer boycott (In China or the U.S.).

China has one of the largest workforces in the world. How should that imapct reform?

This is a question/problem that has always been posed with respect to firms who are investing in developing nations, and it is a valid debate. However, in the context of Apple, what is important to remember is not that some jobs are better than others, but that Apple's suppliers are not complying with Chinese labor laws.

That, regardless of whether or not a laborer can make more in the factory than on the farm, the workers who are employed have been given protections and rights under the laws of China that are not being honored by the suppliers that Apple has chosen to produce their goods.

And for a number of years Apple has known that these conditions exist within their supply chain and have not acted (strongly enough).

Looking to the future, how long do you think reform will take? How will it look different from what American watchdog organizations expect? 

This is a process that will likely take years. Apple is clearly still working to understand the full scope and breadth of the issues that exist, and once known, it will take time and resources to make the necessary changes. Some suppliers will have to enter a process where their practices are improved, while others may find their business with Apple (and others) comes under review altogether.

Second to your question above, I think it is also important to understand whether or not Apple will be able to meet the expectations of Chinese organizations as well. Organizations like Ma Jun's IPE and the HK organization SACM, who have been effectively gathering information and applying pressure on Apple through the media.

Given that the Apple brand is highly respected for its design, quality and innovation in China, does any segment of the Chinese public care about the working conditions under which Apple products are produced?

There is a sense of apathy that exists where consumers are not (as) interested, but as we saw during the period of time where a number of Foxconn workers committed suicide , a healthy discussion is beginning to occurr in China about labor practices, the responsibilities of brands, and Apple was at the center of this discussion.

However, it has yet to turn consumers away from Apple products, so clearly the tipping point has not been reached, but the risk of consumer action is certainly increasing. Which should be a concern to Apple given China is now their second largest market, and they are preparing to launch another 20 Apple stores in the Greater China area.

One area of the Chinese population that is showing more interest though is the government itself, who are certainly more willing to hold Western firms to a higher bar. Examples of this would be the closure of 12 Walmart stores in Chongqing following a consumer pricing scandal, as well as the closure of Catcher, Jingko Solar, and JCI for environmental emissions.

Do they look to U.S. companies for leadership in this area?

With regard to U.S. leadership, or Western leadership in general, this was certainly true five to 10 years ago, but my feeling is that fewer and fewer Chinese consumers look to U.S. or Western firms to provide leadership in the area anymore.

How do you think this kind of consumer apathy can be turned around in China?

At this point, it will take a shock to the system. The Wintek incident, where 140 workers were hospitalized, resulted in a lot of discussion, as did the suicides at Foxconn, so it will be something similar. Perhaps, like Carrefour in 2008 , it will be something nationalistic, or it could be something that is purely based in a Yue Yue type questioning of values.

How it will happen -- social media most likely, and even with the recent restrictions coming online, if a campaign against Apple (or Foxconn) were to take place, I would not see any reason for online censors to inhibit the conversation/anger. But any attempt at a U.S.-style boycott (protestors in front of Apple stores) I do not think would be allowed.

Should users of Apple products feel complicit here? Is there anything consumers can do to help bring about change?

This is the toughest. There are in fact two consumers that need to be considered here.

1. The U.S. (Western) consumers who have been Apple's core market, and who are generally the focus of Western media when it comes to the controversy (i.e. will American consumers boycott Apple) ... to date, the jury is still out with regard to the likelihood of action. Apple has very strong brand position with U.S. consumers, and to date the problems that exist are not Apple's "responsibility." Foxconn is to blame. And that has been enough so far. Although the recent New York Times piece certainly catalyzed discussions in the media about those claims, and if Apple does not address the concerns quickly, the media may have the ability to move more consumers to act.

2. The Chinese consumers, who five years ago were classified as "other income" along with the rest of Asia, but are now Apple's No. 2 market. This consumer segment is very different than Western consumers in that the failures that are occurring are occurring to "their people." That, while Apple builds out their 25 stores and entices investors with "the future of China," it is also employing suppliers who are exploiting (sometimes injuring/ killing Chinese). Which leads me to believe, whether Apple is "responsible" or not, Chinese consumers are far more likely to hold Apple (through Foxconn, or separately) accountable.

What can consumers do? They can buy competitive products (Samsung Galaxy ... no Galaxy factories blew up last year), they can sign petitions, they can send emails (to Apple), or they can protest at stores (like in HK). Each one of course has different impacts, and requires a different level of investment by the consumer, but each is available. That being said, for there to be a direct change in Apple, by Apple, there would need to be a real collective effort.

So far, even with all the press this has not happened -- but as we saw with Nike in 1997, it can happen fast.

This article originally appeared at Asia Society, an Atlantic partner site.

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Alienation and Anomie at Apple, Inc. A Case Study of Foxconn Factory Workers in China

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This article examines how global value chains (GVCs) have shaped a world factory regime, based on the case study of the Foxconn group in Shenzhen, China. We identify three features that characterize a world factory regime: the GVCs’ impacts, the fragmented structure of corporate governance, and workplace despotism, and propose a concept of “global fragmented despotism” to explain changing labor conditions, workers’ suicides and resistance uncovered in Foxconn since 2010.

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We seek to tackle myriad problems of a global production system in which China is the world’s largest producer and exporter of consumer electronics products. Dying for an iPhone simultaneously addresses the challenges facing Chinese workers while locating them within the global economy through an assessment of the relationship between Foxconn (the largest electronics manufacturer) and Apple (one of the richest corporations). Eight researchers from Asia, Europe and North America discuss two main questions: How do tech behemoths and the Chinese state shape labor relations in transnational manufacturing? What roles can workers, public sector buyers, non-governmental organizations and consumers play in holding multinational corporations and states accountable for human rights violations and assuring the protection of worker interests? We also reflect on the possibility that national governments, the electronics industry and civil society groups can collaborate to contribute to improved ...

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In 2010, 15 young migrant workers committed suicide in the Foxconn Technology Group factories in Shenzhen City, China (East Week Magazine 2010). This startling tragedy brought global attention not only to Foxconn but also to sweatshops throughout China. In response, a group of Chinese academics advocated for justice for young migrant workers in China’s sweatshops (Chan and Pun 2010). In 2012, the Fair Labor Association (FLA) launched a special investigation of Apple’s assembly supplier factories and found excessive overtime and unsafe conditions among workers (FLA 2012). Some argue that the poor factory conditions are caused by the emergence of China’s monopoly capitalism brought about by the economic transformation and decentralization of local government and business (Guo et al. 2012). However, the larger context that has given rise to the Foxconn phenomenon has been less well examined. This article examines the history of the development of Foxconn’s manufacturing system, not only from a dynamic local economy perspective, but also from the perspective of cross-scale investigations of the global industry transfer. We use mixed research methods in this investigation, including literature review, media review, field research, and projective drawing making. On site, observation and collaboration with workers through photo taking and interview have been made. We argue that the impact of Foxconn on social, cultural, and environmental conditions at multiple scales is an inescapable consequence of global capital flow under local laissez-faire policies and will continuously diffuse to more developing and industrializing countries. Furthermore, we argue that the stressful working ethics and severe environmental conditions in Foxconn manufacturing plants have serious negative impact on workers’ mental health, physical health, and well-being.

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This study used an international perspective to analyze how newspapers in the United States and China framed a specific global sweatshop issue: a continuous spate of suicides at the Foxconn Technology Group, a major supplier to Apple, Dell, and Hewlett-Packard. Through a quantitative and qualitative analysis of 92 newspaper articles appearing in US and Chinese newspapers, this study found Chinese newspapers framed the suicides mainly as the psychological problems of a young generation rather than a sweatshop issue. Newspapers in the US used a traditional human rights abuser frame to portray the suicides. Foxconn was the main social actor cited in most news coverage. Both the US and Chinese newspapers framed the case as a China-specific problem, ignoring global social justice and world economy aspects. This study contributes more broadly to framing research by developing an approach that is distinctly used for cross-cultural framing studies about a global issue.

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Apple Puts Key Contractor on Probation Over Labor Abuses in China

The technology giant said it had suspended future business with the iPhone assembler Pegatron pending corrective actions. The Taiwanese manufacturer broke rules limiting student employee work hours.

By Paul Mozur

Apple said on Monday that it had placed a key assembler of its iPhones on probation after the Taiwanese company was found to have concealed violations of labor rules for students employed at its factories in China .

For years, Apple has worked, and at times struggled, to uphold labor standards across its vast electronics supply chain in China. The company said it had made the decision because the Taiwanese company, Pegatron, had violated its code of conduct by allowing student laborers to work night shifts and overtime and do work unrelated to their fields of study, and had then falsified documents to cover it up.

“The individuals at Pegatron responsible for the violations went to extraordinary lengths to evade our oversight mechanisms,” Apple said in a statement.

To meet grueling deadlines, factories in China sometimes recruit labor from local technical schools. Strict guidelines are supposed to limit how long and when such employees can work, but in practice, rules are often ignored and other abuses are common. In some cases, students have said they were forced to do monotonous assembly work rather than the more technical tasks they were studying.

Pegatron, a major assembler of the iPhone that has factories across China, has been accused of a number of labor and environmental abuses over the years. Apple said it would not give the contractor any new business until it took corrective measures, and noted that a Pegatron executive in charge of the student employment program had already been fired.

The rebuke, rare for such a high-profile supplier, underscored a challenge facing Apple as it seeks to address abuses in its supply chain, which sprawls across hundreds of factories across China and increasingly the world. While Apple can make or break the smaller companies that make the innards of its iPhones and put them together, few have the scale to assemble large numbers of phones quickly, leaving Apple reliant on assemblers like Pegatron and its larger Taiwanese rival, Foxconn .

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Researching the Foxconn Scandal Case Study

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Introduction

Characteristics of apple culture that led to the foxconn scandal in 2012, apple’s stakeholders and how they are impacted by supply chain issues, recommendation and conclusion.

Foxconn is a Chinese manufacturing company leading in producing electronic products worldwide. It makes these items for leading brands in the manufacturing industry, such as Apple. However, there was a lot of heat in the partnership between Apple and Foxconn due to the working conditions existing in Foxconn. Apple Inc. has become an iconic and admirable company, even for famous Facebook founder Mark Zuckerberg. The company, founded in 1996, has been undergoing fast growth in revenue with an increase in its valuation through the years.

Based on the case study, the Foxconn scandal in 2012 contributed majorly to the poor working condition that employees of Foxconn were going through in the company. The manager of the firm promised a better working environment for the staff members, but it failed to deliver (“Case study,” 2014). The facilities consisted of a large group of employees who, despite their effort and long hours of work, faced significant mistreatment, including standing during work hours (Pun et al., 2019). Similarly, the employees in the Foxconn Company experienced a number of suicide cases from their colleagues who suffered mental problems due to the working condition and pressure from the management. Even though the firm had better facilities, such as cinemas and a swimming pool, workers found it challenging to bear the mistreatment they received from their supervisors (Yang, 2021). Based on the case study, the report by universities in China, Hong Kong, and Taiwan revealed that over 13 people died of suicide. The aspect was enhanced by the negligence of the firm to increase wages and implement mental health services.

In addition, the public radio broadcast and the podcast exposed the conditions which the workers were facing in the Foxconn Company. The viral downloads attained over 800,000 views which gave the public, including suppliers of the firm, insight into how the business organization was treating its employees (He et al., 2019). The exposure by Mike Daisey made the organization lose a significant number of consumers which made it lose the market.

In the industry, Apple has significant stakeholders who are vulnerable to any form of misconduct linked to the company. They include consumers, employees, suppliers, and the government (Buckley, 2020). The mentioned stakeholders face poor reputations following the disclosure of the working relationship between Apple and Foxconn. Using Porter’s Five Forces framework, Apple is facing significant rivalry from its competitors, such as Microsoft and Samsung (“Case study,” 2014). Similarly, its consumers have strong buyer power since they can purchase the products from other providers. The Suppliers have the ability to offer their items to competitors in the market.

Analyzing Apple Inc. in terms of Porter’s Five Forces gives a clear insight into its external strengths leading to its success. Based on these five forces, the firm addresses the trade’s competitiveness and the customers’ bargaining power, which are among the most crucial external forces that affect the business (Chan et al., 2022). Moreover, this analysis indicates that the organization needs to focus on its strategic powers in these two factors to enhance its leadership capabilities in the industry. Porter’s model also provides insights into the intensity of competition and the ability of customers to bargain as the significant factor to consider in strengthening the firm’s strategic formulation. Other forces such as suppliers’ bargaining power, substitution, and new market entry are considerable weak forces affecting its operation.

Buckley, J. (2020). Dying for an iPhone: Apple, Foxconn and the lives of China’s workers . International Journal of Employment Relations , 60 (3).

Case study. (2014). Taking a bite out of Apple: Labor rights and the role of companies and consumers in a global supply chain.

Chan, J., Distelhorst, G., Kessler, D., Lee, J., Martin-Ortega, O., Pawlicki, P. & Selwyn, B. (2022). After the Foxconn suicides in China: A roundtable on labor, the state and civil society in global electronics. Critical Sociology , 48 (2), 211-233.

He, Q., Wang, N., Yang, Z., He, Z., & Jiang, B. (2019). Competitive collection under channel inconvenience in closed-loop supply chain . European Journal of Operational Research , 275 (1), 155-166.

Pun, N., Tse, T., & Ng, K. (2019). Challenging digital capitalism: SACOM’s campaigns against Apple and Foxconn as monopoly capital . Information, Communication & Society , 22 (9), 1253-1268.

Yang, Z. (2021). Book review: Dying for an iPhone: Apple, Foxconn, and the Lives of China’s Workers. Global Media and Communication, 17 (3), 385-387.

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IvyPanda. (2023, August 5). Researching the Foxconn Scandal. https://ivypanda.com/essays/researching-the-foxconn-scandal/

"Researching the Foxconn Scandal." IvyPanda , 5 Aug. 2023, ivypanda.com/essays/researching-the-foxconn-scandal/.

IvyPanda . (2023) 'Researching the Foxconn Scandal'. 5 August.

IvyPanda . 2023. "Researching the Foxconn Scandal." August 5, 2023. https://ivypanda.com/essays/researching-the-foxconn-scandal/.

1. IvyPanda . "Researching the Foxconn Scandal." August 5, 2023. https://ivypanda.com/essays/researching-the-foxconn-scandal/.

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IvyPanda . "Researching the Foxconn Scandal." August 5, 2023. https://ivypanda.com/essays/researching-the-foxconn-scandal/.