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Apple's image may be tarnished by poor factory conditions

post #1 of 98
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Apple presents an image of quality, but an audit of its factories in mainland China showed that more than half of these weren't paying their workers properly last year.

Following an investigation on Tuesday into many Chinese companies violating recent labor laws, it's now known through Apple's 2009 responsibility progress report that 45 of the 83 factories that built iPhones and iPods in 2008 weren't paying valid overtime rates for those workers that qualified, while 23 of these weren't even paying some of their workers China's minimum wage.

A deeper look at Apple's findings found that about 25 of the 83 also discriminated to some degree against people based on ethnicity, biological issues like disabilities, or political leanings. 22 didn't meet environmental standards, while almost exactly a fifth also had problems with on-site living conditions and safety.

In a few extreme cases, seven factories had been caught having at least at one time hired underage workers, though were weren't more than 25 people involved. Some workers at six factories also had to enter debt to a recruitment agency just to start work and were effectively forced to work to pay off their recruiters.

When contacted by Bloomberg, Apple maintained that it has regularly audited all of its suppliers in China and otherwise since 2007 and that it has actively sought to improve conditions for those contracted and migrant workers most likely to be hurt by labor abuses. The report itself mentions that Apple goes above and beyond inspections performed by other companies and talks to contractors and migrants themselves, also insisting on ways for employees to complain about conditions without fear of retaliation.

Still, bringing these outstanding issues to light underscores a number of labor-related problems in Asia that have dimmed Apple's often heavily polished corporate image up to and including this year. After an unofficial look into sub-par conditions at Foxconn factories producing iPods during 2006, Apple had little option but to conduct its first sweeping audit and clean up widespread problems at the Chinese firm. In Taiwan, where labor laws are more rigidly enforced, Apple has still had to contend with allegations of questionable pay cuts and retaliatory firings at Wintek, which supplies iPhone screens to this day.
post #2 of 98
The human cost of outsourcing to a nation that is catching up like China.

Of course, many of those workers will still prefer it to the old rural life of poverty that they would have had but a generation ago. However it doesn't excuse the exploitation.

I hope that Apple has the backbone to stop using factories that repeatedly fail, otherwise the checks mean nothing and the abuses will continue.

And we should think of why our new shiny technology gadget is only $299, because someone is sitting down for 12 hours a day doing repetitive, menial but fiddly work, for a pittance in our terms.

Building them in the first world with first world wages would add a bit to the cost ... until unions got involved anyway.
post #3 of 98
Sounds just like most offices in corporate America to me.

That's not to say that I agree with how they are treated in either situation.

I have seen this first-hand (China) and it is despicable.

I lived with it in corporate America for too many years to count. Might just explain my "spotty" resume?
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post #4 of 98
Ho chi minh....ftw

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post #5 of 98
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post #6 of 98
Well 2 options here for Apple.

1. Sort out the conditions.
2. Price cut across their product range to reflect the discounts they are getting by paying these factories peanuts.

I would go for option 2
post #7 of 98
Quote:
Originally Posted by irnchriz View Post

Well 2 options here for Apple.

1. Sort out the conditions.
2. Price cut across their product range to reflect the discounts they are getting by paying these factories peanuts.

I would go for option 2

you can guarantee that the factory owners and mainland company executives aren't paying themselves peanuts. you'll bump into their sons and daughters in college campuses all around the world...
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post #8 of 98
Most of corporate America does not pay overtime at all. I would settle for straight time.

Quote:
Originally Posted by irnchriz View Post

Well 2 options here for Apple.

1. Sort out the conditions.
2. Price cut across their product range to reflect the discounts they are getting by paying these factories peanuts.

I would go for option 2
post #9 of 98
This is what happens when you outsource your jobs to a communist country that still employs slave labor.

Is anything actually Made in the USA anymore?
post #10 of 98
"Apple presents an image of quality, but an audit of its factories in mainland China showed that more than half of these weren't paying their workers properly last year."

One doesn't have a whole lot to do with the other, unless Apple wants to present an image of "sound business ethics practiced internationally."

It wouldn't make any difference whether paraplegic bears built iPhones in dirt for example. The iPhone stands on its own as a quality product, irresepective of who made it and where. If the product is up to snuff and meets expected standards of form and function, that's what counts in terms of a product qua product.

Working conditions and wages are a humanitarian/labour law issue, and has little to do with Apple's "image of quaity", which they have earned on the strength of their products, not from the people making them under whatever conditions.
post #11 of 98
... that when pure labor cost by comparison reaches 60% of labor cost in the U.S., companies will pull back manufacturing to the States. Poor conditions, like these in China, may even accelerate the return.
So I give it between 5 to 8 years and we will start start seeing labels on Apple boxes saying: "Designed by Apple in California. Assembled in North Carolina."
post #12 of 98
Quote:
Originally Posted by Trajectory View Post

This is what happens when you outsource your jobs to a communist country that still employs slave labor.

Is anything actually Made in the USA anymore?

Of course, but everyone would complain about the price because it's union workers or people that get paid a real wage to design and assemble.
post #13 of 98
Quote:
Originally Posted by Quadra 610 View Post

Working conditions and wages are a humanitarian/labour law issue, and has little to do with Apple's "image of quaity", which they have earned on the strength of their products, not from the people making them under whatever conditions.

That "image of quality" is part of Apple's brand which can be easily tarnished with news that their products are being made in factories where workers are treated poorly. I would think that is a huge concern to Apple. You can bet that competitors are going to call attention to it. I'm sure Microsoft is filming a new TV commercial as we type...
post #14 of 98
Quote:
Originally Posted by Trajectory View Post

Is anything actually Made in the USA anymore?

Yep, slaves. Most don't even know it.
post #15 of 98
Quote:
Originally Posted by steviet02 View Post

Of course, but everyone would complain about the price because it's union workers or people that get paid a real wage to design and assemble.

True. But Apple is already charging premium prices for their products, so, there's really no excuse. It's more a result of greedy CEOs and stock holders. How about the Executive Staff take a few million less home and give up a Ferrari or two and pay workers a fair wage.
post #16 of 98
Quote:
Originally Posted by Trajectory View Post

This is what happens when you outsource your jobs to a communist country that still employs slave labor.

Is anything actually Made in the USA anymore?

Is this comment based on the assumption that minimum wage laws are not socialist at all and rather very much libertarian?
post #17 of 98
Quote:
Originally Posted by Trajectory View Post

That "image of quality" is part of Apple's brand which can be easily tarnished with news that their products are being made in factories where workers are treated poorly. I would think that is a huge concern to Apple. You can bet that competitors are going to call attention to it. I'm sure Microsoft is filming a new TV commercial as we type...

Their hardware competitors are typically using those same factories. As for Microsoft calling attention to it, they will be simultaneously outing Dell and HP among others.
post #18 of 98
Sounds like Walmart.
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post #19 of 98
The fact that Apple uses "Designed by Apple in California" is interesting.

There's a reason why they have to mention California. To keep people's minds in the US and not on overseas/production issues (at least that's part of it). I think it also implies that the products are made in California. Think about it. They simply could use "Designed by Apple".
post #20 of 98
Quote:
Originally Posted by 8CoreWhore View Post

Sounds like Walmart.

As SJ would say: "Boom"
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post #21 of 98
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Originally Posted by DimMok View Post

Ho chi minh....ftw

Uh, you do know Nguyễn
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post #22 of 98
Quote:
Originally Posted by AppleInsider View Post

In a few extreme cases, seven factories had been caught having at least at one time hired underage workers, though were weren't more than 25 people involved.

were weren't, were there? do you guys ever proof this stuff?

Quote:
Originally Posted by Hattig View Post

And we should think of why our new shiny technology gadget is only $299, because someone is sitting down for 12 hours a day doing repetitive, menial but fiddly work, for a pittance in our terms.

yeah, that's it. and apple's $5,000,000,000 in *net* profit a year, and at&t's $13,000,000,000 in *net* profit a year have nothing to do with that. perhaps if just a little of that net income was shifted we could maintain an attractive price for the device and still pay folks properly. but i'm too greedy.
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post #23 of 98
Quote:
Originally Posted by Trajectory View Post

This is what happens when you outsource your jobs to a communist country that still employs slave labor.

Is anything actually Made in the USA anymore?

Actually, I just spent $900 on new Goodyear tires (made in USA) for my Jeep (made in USA). Apple products are the only ones I buy that are NOT made in the USA or EU. I routinely put products back on the shelf if they are made in China. Why any American would spend their money to support a Communist regime is beyond me. I figure with Apple at least the software is made in the US.
post #24 of 98
Quote:
Originally Posted by penchanted View Post

Their hardware competitors are typically using those same factories. As for Microsoft calling attention to it, they will be simultaneously outing Dell and HP among others.

exactly. everyone is complicit. high-profile, easy to target brands like apple attract more criticism than most. we all buy goods every day made in these kind of factories - including those that dish out the guilt trips.
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post #25 of 98
Quote:
Originally Posted by bigmike View Post

The fact that Apple uses "Designed by Apple in California" is interesting.

There's a reason why they have to mention California. To keep people's minds in the US and not on overseas/production issues (at least that's part of it). I think it also implies that the products are made in California. Think about it. They simply could use "Designed by Apple".

No, they ARE designed by Apple in California.

Actual manufacture and assembly may occur elsewhere. Design and assembly are two different things.
post #26 of 98
Quote:
Originally Posted by justflybob View Post

...I lived with it in corporate America for two many years to count. Might just explain my "spotty" resume?

Or it could be the math & spelling.
post #27 of 98
RIM is Canadian company and they manufacture their phones in Canada.

Some companies still have standards against 3rd world labor.
post #28 of 98
Quote:
Originally Posted by halhiker View Post

Actually, I just spent $900 on new Goodyear tires (made in USA) for my Jeep (made in USA). Apple products are the only ones I buy that are NOT made in the USA or EU. I routinely put products back on the shelf if they are made in China. Why any American would spend their money to support a Communist regime is beyond me. I figure with Apple at least the software is made in the US.

I try to do the same, but, it's been increasingly hard to do that with electronics. Trading with communist countries used to be a no-no for American companies, now there are stores in th US and Canada (Walmart) where every single product is made in China.
post #29 of 98
Quote:
Originally Posted by halhiker View Post

Actually, I just spent $900 on new Goodyear tires (made in USA) for my Jeep (made in USA). Apple products are the only ones I buy that are NOT made in the USA or EU. I routinely put products back on the shelf if they are made in China. Why any American would spend their money to support a Communist regime is beyond me. I figure with Apple at least the software is made in the US.

That communist regime is saving our bacon by buying US debt. If they were not you would be looking at interest rates going through the roof. That's our global reality. \
post #30 of 98
Quote:
Originally Posted by Quadra 610 View Post

No, they ARE designed by Apple in California.

Yes, but Apple makes a big deal about that little truth. California is much more prominant than China on their packaging...if you think that is not calculated to draw peoples attention then you are willfully blind...
His point was valid.
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post #31 of 98
Quote:
Originally Posted by rtdunham View Post

Or it could be the math & spelling.

Or I could just be your parents financial advisor.

Since I helped them lose their retirement nest egg, they're moving in with you next week.
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post #32 of 98
Nobody else outsources manufacturing to China.

Simply put, only a fraction of the population could afford most anything produced in China if they had the same standard of living, human rights, etc... that we have here. If they did, the cost of production would wind up being similar to having the same products produced here in North America.
post #33 of 98
Quote:
Originally Posted by Pooch View Post

were weren't, were there? do you guys ever proof this stuff?

Why bother when you'll do it for us?
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post #34 of 98
Yes, greed is spreading from the USA to the rest of the world. Every factory owner wants to be a billionaire like the high-flying Americans. Congratulations America!

For one, Apple did the inspections and published the report. In that case they are doing the best they can do. Apple does not own these factories, nor do they control the management. These factories are owned and operated by independent contractors; Chinese companies fully owned by Chinese/Taiwanese citizens. These companies should be 100% held liable for their mistreatment of their workers, not Apple.

Apple can only do so much. China is awash in corruption and bribery, therefore no amount of effort by Apple can wipe out these worker abuses. Its all about greed. Pay your worker/employee less and less, so you can be a billionaire. If I remember well, it all started in America and now China has learned very well. Bravo to American greed! It is catching up like wildfire!
post #35 of 98
Quote:
Originally Posted by justflybob View Post

Sounds just like most offices in corporate America to me.

That's not to say that I agree with how they are treated in either situation.

I have seen this first-hand (China) and it is despicable.

I lived with it in corporate America for too many years to count. Might just explain my "spotty" resume?

OK, here's the Chinese shell game as I see it... Plants that are in compliance just sub out work to plants that are not in compliance (child labor, horrible working conditions, toxic materials, dangerous equipment). I've seen this first hand. Thus, the factories that are in compliance can fudge the numbers, hide the actual manufacturing locations and pay substandard wages to the "illegal" shops.

In time China will face greater pressure to bring these issues to light. Labor issues and their public's demand for environmental responsibility is growing and will continue to grow.

I did find it interesting that 27% of Apple's Chinese suppliers are FREQUENT violators. You'd think they'd give these suppliers the boot by now.

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post #36 of 98
Quote:
Originally Posted by iPhone1982 View Post

RIM is Canadian company and they manufacture their phones in Canada.

Some companies still have standards against 3rd world labor.

Try telling that to the army of Inuits on 12-hour shifts. Though maybe they get an extra half-bottle for overtime.
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post #37 of 98
Quote:
Originally Posted by Bageljoey View Post

Yes, but Apple makes a big deal about that little truth. California is much more prominant than China on their packaging...if you think that is not calculated to draw peoples attention then you are willfully blind...
His point was valid.

The fact the specify Designed is an affirmation they're not Made in the US. An admission of guilt or am I just a cynic?
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post #38 of 98
Quote:
Originally Posted by Trajectory View Post

This is what happens when you outsource your jobs to a communist country that still employs slave labor.

We get products we can afford & the US gets to outsource it's poverty! Double goodness.
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post #39 of 98
Quote:
Originally Posted by Trajectory View Post

True. But Apple is already charging premium prices for their products, so, there's really no excuse. It's more a result of greedy CEOs and stock holders. How about the Executive Staff take a few million less home and give up a Ferrari or two and pay workers a fair wage.

"Greed" is a naive valuation for self-interest, which is a permanent part of human nature.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #40 of 98
Shame on you, Apple. They treat their U.S. employees very well, and they should make sure their partners do the same. Their contracts make for a mighty threat.
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