D8: Steve Jobs on FoxConn
Jobs answers questions from Walt Mossberg and Kara Swisher about FoxConn, the Chinese manufacturer that has recently been the site of a number of suicides.By CHARLES DUHIGG and DAVID BARBOZA
The explosion ripped through Building A5 on a Friday evening last May,
an eruption of fire and noise that twisted metal pipes as if they were
discarded straws.
When workers in the cafeteria ran outside, they saw black smoke pouring
from shattered windows. It came from the area where employees polished
thousands of iPad cases a day.
Two people were killed immediately, and over a dozen others hurt. As the
injured were rushed into ambulances, one in particular stood out. His
features had been smeared by the blast, scrubbed by heat and violence
until a mat of red and black had replaced his mouth and nose.
Ym Yik/European Pressphoto Agency
SAFETY PRECAUTIONS After a rash of
apparent suicide attempts, a dormitory for Foxconn workers in Shenzhen,
China, had safety netting installed last May. Foxconn said it acted
quickly and comprehensively to address employee suicides.
Readers’ Comments
"These seductive products feed an egocentric population of must-have-the-latest-toy consumers who either ignore these stories or rationalize them away."Ex-New Yorker, undefined
“Are you Lai Xiaodong’s father?” a caller asked when the phone rang at
Mr. Lai’s childhood home. Six months earlier, the 22-year-old had moved
to Chengdu, in southwest China, to become one of the millions of human
cogs powering the largest, fastest and most sophisticated manufacturing
system on earth. That system has made it possible for Apple and hundreds of other companies to build devices almost as quickly as they can be dreamed up.
“He’s in trouble,” the caller told Mr. Lai’s father. “Get to the hospital as soon as possible.”
In the last decade, Apple has become one of the mightiest, richest and
most successful companies in the world, in part by mastering global
manufacturing. Apple and its high-technology peers — as well as dozens
of other American industries — have achieved a pace of innovation nearly
unmatched in modern history.
However, the workers assembling iPhones, iPads and other devices often
labor in harsh conditions, according to employees inside those plants,
worker advocates and documents published by companies themselves.
Problems are as varied as onerous work environments and serious —
sometimes deadly — safety problems.
Employees work excessive overtime, in some cases seven days a week, and
live in crowded dorms. Some say they stand so long that their legs swell
until they can hardly walk. Under-age workers have helped build Apple’s
products, and the company’s suppliers have improperly disposed of
hazardous waste and falsified records, according to company reports and
advocacy groups that, within China, are often considered reliable,
independent monitors.
More troubling, the groups say, is some suppliers’ disregard for
workers’ health. Two years ago, 137 workers at an Apple supplier in
eastern China were injured after they were ordered to use a poisonous
chemical to clean iPhone
screens. Within seven months last year, two explosions at iPad
factories, including in Chengdu, killed four people and injured 77.
Before those blasts, Apple had been alerted to hazardous conditions
inside the Chengdu plant, according to a Chinese group that published that warning.
“If Apple was warned, and didn’t act, that’s reprehensible,” said
Nicholas Ashford, a former chairman of the National Advisory Committee
on Occupational Safety and Health, a group that advises the United
States Labor Department. “But what’s morally repugnant in one country is
accepted business practices in another, and companies take advantage of
that.”
Apple is not the only electronics company doing business within a
troubling supply system. Bleak working conditions have been documented
at factories manufacturing products for Dell, Hewlett-Packard, I.B.M.,
Lenovo, Motorola, Nokia, Sony, Toshiba and others.
Current and former Apple executives, moreover, say the company has made
significant strides in improving factories in recent years. Apple has a supplier code of conduct
that details standards on labor issues, safety protections and other
topics. The company has mounted a vigorous auditing campaign, and when
abuses are discovered, Apple says, corrections are demanded.
Made in China
Related
The Lede Blog: Chinese Readers on the ‘iEconomy’ (January 25, 2012)
Poll Finds Consumer Confusion on Where Apple Devices Are Made (January 26, 2012)
-
Economix Blog: Facebook Chat About the 'iEconomy' Series (January 25, 2012)
And Apple’s annual supplier responsibility reports, in many cases, are the first to report abuses. This month, for the first time, the company released a list identifying many of its suppliers.
But significant problems remain. More than half of the suppliers audited
by Apple have violated at least one aspect of the code of conduct every
year since 2007, according to Apple’s reports, and in some instances
have violated the law. While many violations involve working conditions,
rather than safety hazards, troubling patterns persist.
“Apple never cared about anything other than increasing product quality
and decreasing production cost,” said Li Mingqi, who until April worked
in management at Foxconn Technology,
one of Apple’s most important manufacturing partners. Mr. Li, who is
suing Foxconn over his dismissal, helped manage the Chengdu factory
where the explosion occurred.
“Workers’ welfare has nothing to do with their interests,” he said.
Some former Apple executives say there is an unresolved tension within
the company: executives want to improve conditions within factories, but
that dedication falters when it conflicts with crucial supplier
relationships or the fast delivery of new products. Tuesday, Apple reported
one of the most lucrative quarters of any corporation in history, with
$13.06 billion in profits on $46.3 billion in sales. Its sales would
have been even higher, executives said, if overseas factories had been
able to produce more.
Executives at other corporations report similar internal pressures. This
system may not be pretty, they argue, but a radical overhaul would slow
innovation. Customers want amazing new electronics delivered every
year.
“We’ve known about labor abuses in some factories for four years, and
they’re still going on,” said one former Apple executive who, like
others, spoke on the condition of anonymity because of confidentiality
agreements. “Why? Because the system works for us. Suppliers would
change everything tomorrow if Apple told them they didn’t have another
choice.”
“If half of iPhones were malfunctioning, do you think Apple would let it go on for four years?” the executive asked.
Apple, in its published reports, has said it requires every discovered
labor violation to be remedied, and suppliers that refuse are
terminated. Privately, however, some former executives concede that
finding new suppliers is time-consuming and costly. Foxconn is one of
the few manufacturers in the world with the scale to build sufficient
numbers of iPhones and iPads. So Apple is “not going to leave Foxconn
and they’re not going to leave China,” said Heather White, a research
fellow at Harvard and a former member of the Monitoring International
Labor Standards committee at the National Academy of Sciences. “There’s a
lot of rationalization.”
Apple was provided with extensive summaries of this article, but the
company declined to comment. The reporting is based on interviews with
more than three dozen current or former employees and contractors,
including a half-dozen current or former executives with firsthand
knowledge of Apple’s supplier responsibility group, as well as others
within the technology industry.
In 2010, Steven P. Jobs discussed the company’s relationships with suppliers at an industry conference.
“I actually think Apple does one of the best jobs of any companies in
our industry, and maybe in any industry, of understanding the working
conditions in our supply chain,” said Mr. Jobs, who was Apple’s chief
executive at the time and who died last October.
“I mean, you go to this place, and, it’s a factory, but, my gosh, I
mean, they’ve got restaurants and movie theaters and hospitals and
swimming pools, and I mean, for a factory, it’s a pretty nice factory.”
Others, including workers inside such plants, acknowledge the cafeterias
and medical facilities, but insist conditions are punishing.
“We’re trying really hard to make things better,” said one former Apple
executive. “But most people would still be really disturbed if they saw
where their iPhone comes from.”
The Road to Chengdu
In the fall of 2010, about six months before the explosion in the iPad
factory, Lai Xiaodong carefully wrapped his clothes around his college
diploma, so it wouldn’t crease in his suitcase. He told friends he would
no longer be around for their weekly poker games, and said goodbye to
his teachers. He was leaving for Chengdu, a city of 12 million that was
rapidly becoming one of the world’s most important manufacturing hubs.
Though painfully shy, Mr. Lai had surprised everyone by persuading a
beautiful nursing student to become his girlfriend. She wanted to marry,
she said, and so his goal was to earn enough money to buy an apartment.
Factories in Chengdu manufacture products for hundreds of companies. But
Mr. Lai was focused on Foxconn Technology, China’s largest exporter and
one of the nation’s biggest employers, with 1.2 million workers. The
company has plants throughout China, and assembles an estimated 40
percent of the world’s consumer electronics, including for customers
like Amazon, Dell, Hewlett-Packard, Nintendo, Nokia and Samsung.
Foxconn’s factory in Chengdu, Mr. Lai knew, was special. Inside, workers
were building Apple’s latest, potentially greatest product: the iPad.
When Mr. Lai finally landed a job repairing machines at the plant, one
of the first things he noticed were the almost blinding lights. Shifts
ran 24 hours a day, and the factory was always bright. At any moment,
there were thousands of workers standing on assembly lines or sitting in
backless chairs, crouching next to large machinery, or jogging between
loading bays. Some workers’ legs swelled so much they waddled. “It’s
hard to stand all day,” said Zhao Sheng, a plant worker.
Banners on the walls warned the 120,000 employees: “Work hard on the job
today or work hard to find a job tomorrow.” Apple’s supplier code of
conduct dictates that, except in unusual circumstances, employees are
not supposed to work more than 60 hours a week. But at Foxconn, some
worked more, according to interviews, workers’ pay stubs and surveys by
outside groups. Mr. Lai was soon spending 12 hours a day, six days a
week inside the factory, according to his paychecks. Employees who
arrived late were sometimes required to write confession letters and
copy quotations. There were “continuous shifts,” when workers were told
to work two stretches in a row, according to interviews.
Mr. Lai’s college degree enabled him to earn a salary of around $22 a
day, including overtime — more than many others. When his days ended, he
would retreat to a small bedroom just big enough for a mattress,
wardrobe and a desk where he obsessively played an online game called
Fight the Landlord, said his girlfriend, Luo Xiaohong.
Those accommodations were better than many of the company’s dorms, where
70,000 Foxconn workers lived, at times stuffed 20 people to a
three-room apartment, employees said. Last year, a dispute over
paychecks set off a riot in one of the dormitories, and workers started
throwing bottles, trash cans and flaming paper from their windows,
according to witnesses. Two hundred police officers wrestled with
workers, arresting eight. Afterward, trash cans were removed, and piles
of rubbish — and rodents — became a problem. Mr. Lai felt lucky to have a
place of his own.
Foxconn, in a statement, disputed workers’ accounts of continuous
shifts, extended overtime, crowded living accommodations and the causes
of the riot. The company said that its operations adhered to customers’
codes of conduct, industry standards and national laws. “Conditions at
Foxconn are anything but harsh,” the company wrote. Foxconn also said
that it had never been cited by a customer or government for under-age
or overworked employees or toxic exposures.
“All assembly line employees are given regular breaks, including
one-hour lunch breaks,” the company wrote, and only 5 percent of
assembly line workers are required to stand to carry out their tasks.
Work stations have been designed to ergonomic standards, and employees
have opportunities for job rotation and promotion, the statement said.
“Foxconn has a very good safety record,” the company wrote. “Foxconn has
come a long way in our efforts to lead our industry in China in areas
such as workplace conditions and the care and treatment of our
employees.”
Apple’s Code of Conduct
In 2005, some of Apple’s top executives gathered inside their Cupertino,
Calif., headquarters for a special meeting. Other companies had created
codes of conduct to police their suppliers. It was time, Apple decided,
to follow suit. The code Apple published that year demands “that
working conditions in Apple’s supply chain are safe, that workers are
treated with respect and dignity, and that manufacturing processes are
environmentally responsible.”
But the next year, a British newspaper, The Mail on Sunday, secretly visited a Foxconn factory
in Shenzhen, China, where iPods were manufactured, and reported on
workers’ long hours, push-ups meted out as punishment and crowded dorms.
Executives in Cupertino were shocked. “Apple is filled with really good
people who had no idea this was going on,” a former employee said. “We
wanted it changed, immediately.”
Apple audited that factory, the company’s first such inspection, and
ordered improvements. Executives also undertook a series of initiatives
that included an annual audit report, first published in 2007. By last
year, Apple had inspected 396 facilities — including the company’s
direct suppliers, as well as many of those suppliers’ suppliers — one of
the largest such programs within the electronics industry.
Those audits have found consistent violations of Apple’s code of conduct, according to summaries
published by the company. In 2007, for instance, Apple conducted over
three dozen audits, two-thirds of which indicated that employees
regularly worked more than 60 hours a week. In addition, there were six
“core violations,” the most serious kind, including hiring 15-year-olds
as well as falsifying records.
Over the next three years, Apple conducted 312 audits, and every year,
about half or more showed evidence of large numbers of employees
laboring more than six days a week as well as working extended overtime.
Some workers received less than minimum wage or had pay withheld as
punishment. Apple found 70 core violations over that period, including
cases of involuntary labor, under-age workers, record falsifications,
improper disposal of hazardous waste and over a hundred workers injured
by toxic chemical exposures.
Last year, the company conducted 229 audits. There were slight
improvements in some categories and the detected rate of core violations
declined. However, within 93 facilities, at least half of workers
exceeded the 60-hours-a-week work limit. At a similar number, employees
worked more than six days a week. There were incidents of
discrimination, improper safety precautions, failure to pay required
overtime rates and other violations. That year, four employees were
killed and 77 injured in workplace explosions.
“If you see the same pattern of problems, year after year, that means
the company’s ignoring the issue rather than solving it,” said one
former Apple executive with firsthand knowledge of the supplier
responsibility group. “Noncompliance is tolerated, as long as the
suppliers promise to try harder next time. If we meant business, core
violations would disappear.”
Apple says that when an audit reveals a violation, the company requires
suppliers to address the problem within 90 days and make changes to
prevent a recurrence. “If a supplier is unwilling to change, we
terminate our relationship,” the company says on its Web site.
The seriousness of that threat, however, is unclear. Apple has found
violations in hundreds of audits, but fewer than 15 suppliers have been
terminated for transgressions since 2007, according to former Apple
executives.
“Once the deal is set and Foxconn becomes an authorized Apple supplier,
Apple will no longer give any attention to worker conditions or anything
that is irrelevant to its products,” said Mr. Li, the former Foxconn
manager. Mr. Li spent seven years with Foxconn in Shenzhen and Chengdu
and was forced out in April after he objected to a relocation to
Chengdu, he said. Foxconn disputed his comments, and said “both Foxconn
and Apple take the welfare of our employees very seriously.”
Apple’s efforts have spurred some changes. Facilities that were
reaudited “showed continued performance improvements and better working
conditions,” the company wrote in its 2011 supplier responsibility progress report.
In addition, the number of audited facilities has grown every year, and
some executives say those expanding efforts obscure year-to-year
improvements.
Apple also has trained over a million workers about their rights and
methods for injury and disease prevention. A few years ago, after
auditors insisted on interviewing low-level factory employees, they
discovered that some had been forced to pay onerous “recruitment fees” —
which Apple classifies as involuntary labor. As of last year, the
company had forced suppliers to reimburse more than $6.7 million in such
charges.
“Apple is a leader in preventing under-age labor,” said Dionne Harrison
of Impactt, a firm paid by Apple to help prevent and respond to child labor among its suppliers. “They’re doing as much as they possibly can.”
Other consultants disagree.
“We’ve spent years telling Apple there are serious problems and
recommending changes,” said a consultant at BSR — also known as Business
for Social Responsibility — which has been twice retained by Apple to
provide advice on labor issues. “They don’t want to pre-empt problems,
they just want to avoid embarrassments.”
‘We Could Have Saved Lives’
In 2006, BSR, along with a division of the World Bank and other groups,
initiated a project to improve working conditions in factories building
cellphones and other devices in China and elsewhere. The groups and
companies pledged to test various ideas. Foxconn agreed to participate.
For four months, BSR and another group negotiated with Foxconn regarding
a pilot program to create worker “hotlines,” so that employees could
report abusive conditions, seek mental counseling and discuss workplace
problems. Apple was not a participant in the project, but was briefed on
it, according to the BSR consultant, who had detailed knowledge.
As negotiations proceeded, Foxconn’s requirements for participation kept
changing. First Foxconn asked to shift from installing new hotlines to
evaluating existing hotlines. Then Foxconn insisted that mental health
counseling be excluded. Foxconn asked participants to sign agreements
saying they would not disclose what they observed, and then rewrote
those agreements multiple times. Finally, an agreement was struck, and
the project was scheduled to begin in January 2008. A day before the
start, Foxconn demanded more changes, until it was clear the project
would not proceed, according to the consultant and a 2008 summary by BSR
that did not name Foxconn.
The next year, a Foxconn employee fell or jumped from an apartment
building after losing an iPhone prototype. Over the next two years, at
least 18 other Foxconn workers attempted suicide or fell from buildings
in manners that suggested suicide attempts. In 2010, two years after the
pilot program fell apart and after multiple suicide attempts, Foxconn
created a dedicated mental health hotline and began offering free
psychological counseling.
“We could have saved lives, and we asked Apple to pressure Foxconn, but
they wouldn’t do it,” said the BSR consultant, who asked not to be
identified because of confidentiality agreements. “Companies like H.P.
and Intel and Nike push their suppliers. But Apple wants to keep an
arm’s length, and Foxconn is their most important manufacturer, so they
refuse to push.”
BSR, in a written statement, said the views of that consultant were not those of the company.
“My BSR colleagues and I view Apple as a company that is making a highly
serious effort to ensure that labor conditions in its supply chain meet
the expectations of applicable laws, the company’s standards and the
expectations of consumers,” wrote Aron Cramer, BSR’s president. Mr.
Cramer added that asking Apple to pressure Foxconn would have been
inconsistent with the purpose of the pilot program, and there were
multiple reasons the pilot program did not proceed.
Foxconn, in a statement, said it acted quickly and comprehensively to
address suicides, and “the record has shown that those measures have
been successful.”
A Demanding Client
Every month, officials at companies from around the world trek to
Cupertino or invite Apple executives to visit their foreign factories,
all in pursuit of a goal: becoming a supplier.
When news arrives that Apple is interested in a particular product or
service, small celebrations often erupt. Whiskey is drunk. Karaoke is
sung.
Then, Apple’s requests start.
Apple typically asks suppliers to specify how much every part costs, how
many workers are needed and the size of their salaries. Executives want
to know every financial detail. Afterward, Apple calculates how much it
will pay for a part. Most suppliers are allowed only the slimmest of
profits.
So suppliers often try to cut corners, replace expensive chemicals with
less costly alternatives, or push their employees to work faster and
longer, according to people at those companies.
“The only way you make money working for Apple is figuring out how to do
things more efficiently or cheaper,” said an executive at one company
that helped bring the iPad to market. “And then they’ll come back the
next year, and force a 10 percent price cut.”
In January 2010, workers at a Chinese factory owned by Wintek, an Apple
manufacturing partner, went on strike over a variety of issues,
including widespread rumors that workers were being exposed to toxins.
Investigations by news organizations revealed that over a hundred
employees had been injured by n-hexane, a toxic chemical that can cause
nerve damage and paralysis.
Employees said they had been ordered to use n-hexane to clean iPhone
screens because it evaporated almost three times as fast as rubbing
alcohol. Faster evaporation meant workers could clean more screens each
minute.
Apple commented on the Wintek injuries a year later. In its supplier
responsibility report, Apple said it had “required Wintek to stop using
n-hexane” and that “Apple has verified that all affected workers have
been treated successfully, and we continue to monitor their medical
reports until full recuperation.” Apple also said it required Wintek to
fix the ventilation system.
That same month, a New York Times reporter interviewed a dozen injured Wintek workers who said they had never been contacted
by Apple or its intermediaries, and that Wintek had pressured them to
resign and take cash settlements that would absolve the company of
liability. After those interviews, Wintek pledged to provide more
compensation to the injured workers and Apple sent a representative to
speak with some of them.
Six months later, trade publications reported that Apple significantly cut prices paid to Wintek.
“You can set all the rules you want, but they’re meaningless if you
don’t give suppliers enough profit to treat workers well,” said one
former Apple executive with firsthand knowledge of the supplier
responsibility group. “If you squeeze margins, you’re forcing them to
cut safety.”
Wintek is still one of Apple’s most important suppliers. Wintek, in a
statement, declined to comment except to say that after the episode, the
company took “ample measures” to address the situation and “is
committed to ensuring employee welfare and creating a safe and healthy
work environment.”
Many major technology companies have worked with factories where
conditions are troubling. However, independent monitors and suppliers
say some act differently. Executives at multiple suppliers, in
interviews, said that Hewlett-Packard and others allowed them slightly
more profits and other allowances if they were used to improve worker
conditions.
“Our suppliers are very open with us,” said Zoe McMahon, an executive in
Hewlett-Packard’s supply chain social and environmental responsibility
program. “They let us know when they are struggling to meet our
expectations, and that influences our decisions.”
The Explosion
On the afternoon of the blast at the iPad plant, Lai Xiaodong telephoned
his girlfriend, as he did every day. They had hoped to see each other
that evening, but Mr. Lai’s manager said he had to work overtime, he
told her.
He had been promoted quickly at Foxconn, and after just a few months was
in charge of a team that maintained the machines that polished iPad
cases. The sanding area was loud and hazy with aluminum dust. Workers
wore masks and earplugs, but no matter how many times they showered,
they were recognizable by the slight aluminum sparkle in their hair and
at the corners of their eyes.
Just two weeks before the explosion, an advocacy group in Hong Kong
published a report warning of unsafe conditions at the Chengdu plant,
including problems with aluminum dust. The group, Students and Scholars
Against Corporate Misbehavior, or Sacom, had videotaped workers covered
with tiny aluminum particles. “Occupational health and safety issues in
Chengdu are alarming,” the report read. “Workers also highlight the problem of poor ventilation and inadequate personal protective equipment.”
A copy of that report was sent to Apple. “There was no response,” said
Debby Chan Sze Wan of the group. “A few months later I went to
Cupertino, and went into the Apple lobby, but no one would meet with me.
I’ve never heard from anyone from Apple at all.”
The morning of the explosion, Mr. Lai rode his bicycle to work. The iPad
had gone on sale just weeks earlier, and workers were told thousands of
cases needed to be polished each day. The factory was frantic,
employees said. Rows of machines buffed cases as masked employees pushed
buttons. Large air ducts hovered over each station, but they could not
keep up with the three lines of machines polishing nonstop. Aluminum
dust was everywhere.
Dust is a known safety hazard. In 2003, an aluminum dust explosion in
Indiana destroyed a wheel factory and killed a worker. In 2008,
agricultural dust inside a sugar factory in Georgia caused an explosion that killed 14.
Two hours into Mr. Lai’s second shift, the building started to shake, as
if an earthquake was under way. There was a series of blasts, plant
workers said.
Then the screams began.
When Mr. Lai’s colleagues ran outside, dark smoke was mixing with a
light rain, according to cellphone videos. The toll would eventually
count four dead, 18 injured.
At the hospital, Mr. Lai’s girlfriend saw that his skin was almost
completely burned away. “I recognized him from his legs, otherwise I
wouldn’t know who that person was,” she said.
Eventually, his family arrived. Over 90 percent of his body had been
seared. “My mom ran away from the room at the first sight of him. I
cried. Nobody could stand it,” his brother said. When his mother
eventually returned, she tried to avoid touching her son, for fear that
it would cause pain.
“If I had known,” she said, “I would have grabbed his arm, I would have touched him.”
“He was very tough,” she said. “He held on for two days.”
After Mr. Lai died, Foxconn workers drove to Mr. Lai’s hometown and
delivered a box of ashes. The company later wired a check for about
$150,000.
Foxconn, in a statement, said that at the time of the explosion the
Chengdu plant was in compliance with all relevant laws and regulations,
and “after ensuring that the families of the deceased employees were
given the support they required, we ensured that all of the injured
employees were given the highest quality medical care.” After the
explosion, the company added, Foxconn immediately halted work in all
polishing workshops, and later improved ventilation and dust disposal,
and adopted technologies to enhance worker safety.
In its most recent supplier responsibility report, Apple wrote that
after the explosion, the company contacted “the foremost experts in
process safety” and assembled a team to investigate and make
recommendations to prevent future accidents.
In December, however, seven months after the blast that killed Mr. Lai,
another iPad factory exploded, this one in Shanghai. Once again,
aluminum dust was the cause, according to interviews and Apple’s most
recent supplier responsibility report. That blast injured 59 workers,
with 23 hospitalized.
“It is gross negligence, after an explosion occurs, not to realize that
every factory should be inspected,” said Nicholas Ashford, the
occupational safety expert, who is now at the Massachusetts Institute of
Technology. “If it were terribly difficult to deal with aluminum dust, I
would understand. But do you know how easy dust is to control? It’s
called ventilation. We solved this problem over a century ago.”
In its most recent supplier responsibility report, Apple wrote that
while the explosions both involved combustible aluminum dust, the causes
were different. The company declined, however, to provide details. The
report added that Apple had now audited all suppliers polishing aluminum
products and had put stronger precautions in place. All suppliers have
initiated required countermeasures, except one, which remains shut down,
the report said.
For Mr. Lai’s family, questions remain. “We’re really not sure why he
died,” said Mr. Lai’s mother, standing beside a shrine she built near
their home. “We don’t understand what happened.”
Hitting the Apple Lottery
Every year, as rumors about Apple’s forthcoming products start to
emerge, trade publications and Web sites begin speculating about which
suppliers are likely to win the Apple lottery. Getting a contract from
Apple can lift a company’s value by millions because of the implied
endorsement of manufacturing quality. But few companies openly brag
about the work: Apple generally requires suppliers to sign contracts
promising they will not divulge anything, including the partnership.
That lack of transparency gives Apple an edge at keeping its plans
secret. But it also has been a barrier to improving working conditions,
according to advocates and former Apple executives.
This month, after numerous requests by advocacy and news organizations, including The New York Times, Apple released
the names of 156 of its suppliers. In the report accompanying that
list, Apple said they “account for more than 97 percent of what we pay
to suppliers to manufacture our products.”
However, the company has not revealed the names of hundreds of other
companies that do not directly contract with Apple, but supply the
suppliers. The company’s supplier list does not disclose where factories
are, and many are hard to find. And independent monitoring
organizations say when they have tried to inspect Apple’s suppliers,
they have been barred from entry — on Apple’s orders, they have been
told.
“We’ve had this conversation hundreds of times,” said a former executive
in Apple’s supplier responsibility group. “There is a genuine,
company wide commitment to the code of conduct. But taking it to the next
level and creating real change conflicts with secrecy and business
goals, and so there’s only so far we can go.” Former Apple employees say
they were generally prohibited from engaging with most outside groups.
“There’s a real culture of secrecy here that influences everything,” the former executive said.
Some other technology companies operate differently.
“We talk to a lot of outsiders,” said Gary Niekerk, director of
corporate citizenship at Intel. “The world’s complex, and unless we’re
dialoguing with outside groups, we miss a lot.”
Given Apple’s prominence and leadership in global manufacturing, if the
company were to radically change its ways, it could overhaul how
business is done. “Every company wants to be Apple,” said Sasha Lezhnev
at the Enough Project, a group focused on corporate accountability. “If
they committed to building a conflict-free iPhone, it would transform
technology.”
But ultimately, say former Apple executives, there are few real outside
pressures for change. Apple is one of the most admired brands. In a
national survey conducted by The New York Times in November, 56 percent
of respondents said they couldn’t think of anything negative about
Apple. Fourteen percent said the worst thing about the company was that
its products were too expensive. Just 2 percent mentioned overseas labor
practices.
People like Ms. White of Harvard say that until consumers demand better
conditions in overseas factories — as they did for companies like Nike
and Gap, which today have overhauled conditions among suppliers — or
regulators act, there is little impetus for radical change. Some Apple
insiders agree.
“You can either manufacture in comfortable, worker-friendly factories,
or you can reinvent the product every year, and make it better and
faster and cheaper, which requires factories that seem harsh by American
standards,” said a current Apple executive.
“And right now, customers care more about a new iPhone than working conditions in China.”
No comments:
Post a Comment