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Apple rumored to directly provide raises to Foxconn employees - Page 2

post #41 of 65
Quote:
Originally Posted by justbobf View Post

Well, if so, that is a start for Apple. Apple rakes in billions of dollars in profits; profits gained by either overcharging for its products, or, more apparently, underpaying its employees. Remember, it is how we treat the least amongst that really counts.

you're a troll. are you more concerned that apple charges more for their products (which, btw, are far superior to it's competitorsand are available to you should you decide to spend less money on them), or are you horrified by the working conditions at foxconn?

if it's the later, then why aren't you pissed off at the other clients of foxconn? i suspect it doesn't matter to you that apple is the ONLY company that requires a 'code of conduct' when they employ overseas. do those companies adhere strictly to that code? don't know. it's been said that only 56% actually comply.

you know what? 56% worker improvements is such a success!

you're just a troll with nothing better to do.
post #42 of 65
Quote:
Originally Posted by franksmith22 View Post

I believe that's a copout. The only thing that would change would be Apple's profit margins which would be nowhere near 50%. That being said it won't happen.

You have documentation that Apple makes 50% profit?

Are you implying that 50% mark up is improper? That is exactly what I mark up for resale in my business. If you look at the asian auto manufacturers which have built factories in the states, it was mostly to conserve on transportation costs because their product weighs tons. In the case of Apple, one container might handle 100K iPhones so the shipping cost is not much of a factor in the sales price.

As has been stated above, even if Apple wanted to move their manufacturing stateside, they would not be able to. Even Steve's RDF is not powerful enough to convince the shareholders that they should go all in on that gamble.

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post #43 of 65
Quote:
Originally Posted by franksmith22 View Post

I believe that's a copout. The only thing that would change would be Apple's profit margins which would be nowhere near 50%. That being said it won't happen.

You can believe what you want. It is obvious when you start using numbers like 'Apple's 50% profit margin' that you don't know the basic facts.

For the record, Apple's profit margin is slightly less than 23%. For comparison, Microsoft is 28%, Google 29%, Adobe 15%.
post #44 of 65
We usually only see one level deep in the supply chain. I wonder how the pay for the component manufacturers is? I wonder if tacking another 20% on to these products could solve the problem all the way down the supply chain. Still a lot cheaper then building it here.

I'm wondering if we will see some sort of designation (equivalent to organic for food) for sustainable, socially responsible manufacturing practices. With food each component needs to be certified organic, so why not for electronics? I find organic food actually tastes better, perhaps we will see better build quality out of it too.

I think what Apple may be attempting is unprecedented. It is definitely an interesting new take on profit sharing. I imagine these profit sharing requirements will be written in new contracts with their suppliers. It may be difficult for this to work more then one level down in the supply chain although I think Apple buys the components directly. So it would just be an issue with components of components.

These are interesting times. It feels like many aspects of our economy are embracing sustainability as a business practice. It will be interesting to see how experiments like this change our economy.
post #45 of 65
I do not believe the credibility of this article. It would be out of character for a self-respecting Chinese businessman to allow such meddling. People here in the West might think that Chinese business leaders are like the peons of some banana republic. But this is far from reality if you ever interacted more intimately with Chinese business people.

I never heard of a company allowing even a partner, to meddle in the manner described. If ever there was any concession on the Chinese part, to save fact, what could have happened would be a renegotiation of the contract to allow such changes in wages.

However, it is highly unlikely because companies, like Foxconn has manufacturing contract business with other Western companies. There would be unrest in China, which is not unheard of these days, if there is such a disparity in wages within the same company.

Quote:
Originally Posted by BenRoethig View Post

How about they just forget these slavelabor foreign partners and start building their products stateside again? They'd have tighter controls on their products and score some good P.R.

Labor is about 40-70% of cost. It can even be higher in certain settings. Let's just grab numbers out of thin air.

If labor in China may be around $2; at 10h/d; 6days a week and 50 weeks per year, that is around US$6000, more than twice the estimated average annual income of a person in China. No health insurance, no liability insurance (workmen's compensation), etc.

Just consider $8/h minimum wage [When Republicans had their way, with the support of many business lobby groups, they were successful in ensuring that the minimum wage was lower than this in 2007***]. However, even with $8/h, at 8h/d; 5days a week and 50 weeks per year, that is $16000 per year before taxes, before health insurance, before SS deductions. This will be still poverty level in the US. That is why many family breadearners work two jobs and weekends just to make ends meet.

Many states like CA, especially in unionized settings. have minimum wage much higher than the above,

Do the math. More than likely at $8/h, the labor cost alone will more than wipe out the profit of Apple.

In the ;ate 1980s, the cost of Apple computers even before adjusting for inflation cost more than the basic MacBook Pro. I paid $1500 for my first Mac "classic" in 1988 and paid $5000 for my 200MB Mac in 1994. I think even at the time, Apple already started manufacturing in other countries.

Aside from the astounding progress in technology, the basic MacBook Pro, is a fraction of the first Mac, after inflation adjustment, primarily because manufacturing is done abroad. And, yet many consider Macs to be overpriced.

We consumers demand $200-400 computers, and consider Apple products overpriced -- that is the main problem.

Even if Apple gains a temporary PR, if it is possible to bring back manufacturing in the US, imagine mass media (and Apple haters) delight once the first union strike happens.

It is unlikely that your wishis going to happen in our lifetime, especially in a global economy -- unless the trade among nations change and consumers will be willing to pay higher prices for their gadgets, to have decent wages in the US.

CGC


************
From Wikipedia.
Any lower minimum wage levels previously set by U.S. state legislatures will be superseded by the new federal law that boosts the minimum wage from $5.15 to $7.25 per hour.

The wage raise will happen gradually, being completed in two years. "Within 60 days, those who make $5.15 an hour will receive $5.85. Within a year, it will be $6.55. Within two years, it will be $7.25" according to Monique Newton of MyrtleBeachOnline.
post #46 of 65
Sounds like an opportunity for FOXCONN to raise the room and boarding fees it charges it's workers.
post #47 of 65
Quote:
Originally Posted by BenRoethig View Post

How about they just forget these slavelabor foreign partners and start building their products stateside again? They'd have tighter controls on their products and score some good P.R.

Be honest now, how many of us buy or own cars, TVs, shoes and other merchandise etc. that is produced "overseas". Your suggestion, while noble in it's intent, is, I think, unworkable in today's global marketplace, unless, of course, government regulations demanded all manufactures to do the same. Is that what we all want? Personally I wouldn't mind that scenario but I imagine I'd be in the minority.
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post #48 of 65
Quote:
Originally Posted by mstone View Post

The only reason we have affordable high tech products is because of disregard for the environment and poor working conditions in China.

In the US., EPA regulations, medical insurance, retirement, unions, wages, land, construction, taxes, would make the iPad cost prohibitive. Apple wouldn't even sell them because almost no one would be able to afford it if it was manufactured here.

That is just the result of Walmart-style competition. I imagine sustainability would increase prices 15-100%. Most people will still be able to afford a product in this range. Apple is already sustainable in most respects, so I imagine the cost would be on the low end of the spectrum to improve working conditions. If the world economy started to equalize (more consumers in China and other countries), the market would be larger and should help drive down prices though additional automation to help pay for the higher working wage.

(Although Walmart is jumping on the sustainability/environmental bandwagon, just not the working conditions one.)
post #49 of 65
For those of you who have no clue about how labor works in China let me enlighten you. Besides the fact that the China government promotes companies to do what ever they can to make a profit and employ as many workers as possible they also put in place laws to protect those works, like the work week can only be 36 hours, unlike here in the US which is 40, they also limit how much over time they can be forced to work but as it was pointed out in the article companies get workers to waive those rights, how they go about that is probably both good and bad.

From the worker side, even though they only make $130 a month this is far more than they would have made working on the family farm if they did not have factory job. Usually these are women who are lucky to be alive since the families usually killed baby girls or gave them away for adoption. These women usually come to the factory areas or big cities to get a job around the age of 18, they usually work for about 7 to 10 years before they return to their home town to stay and get married with thousands of dollars in hand. They usually have far more money than most of the people in their little farm town. Yes some are forced to work over times, but others do it without a problem because it allows them to make and save more money.

Believe it or not, there is a labor shortage in China due to the one child law that China put in place 20 years ago. Many families now only have one child which happens to be a male and most factories which required skills which most males do not have or choose not to do like being able to do repetitive tasked over and over again without getting board.

You all may be shocked by the low wages, but these people see it as step up from what they otherwise would have had.

BTW, Foxconn employees over 800K of workers, and what do you think the likelihood that someone of them are not stable and probably would have killed themselves whether they were working for foxconn or not. Last time I check we have 13K of teen killing themselves every year and we blame everything form TV, music or peer pressure as the reason, I wonder how many of them worked for McDonald with minimum wage, that would be an interesting correlation.
post #50 of 65
I read an interesting article by Robert Cringely, a former PBS tech writer. He had an interesting point to make: the suicides are not a big deal (my paraphrase).

Here's a tidbit from his intro paragraph:

"Im not here to start a fight, folks, but it seems to me not nearly as many workers are throwing themselves off the roof of that Foxconn factory in China as I would expect."
post #51 of 65
Quote:
Originally Posted by BenRoethig View Post

How about they just forget these slavelabor foreign partners and start building their products stateside again? They'd have tighter controls on their products and score some good P.R.

Better working conditions over there help them and us. It is easier for us to compete (especially in new areas where there is an investment hurdle) if the price parity is closer. If they are paid more they will turn in to consumers more quickly. The factories over there are not like anything that the US has invested in. It is hard to get investors to start a company when there are plenty to meet demand overseas. A lot of factories are started with government stimulus. I'd rather see us doing something new then create factories that have to compete with China. I really think the best PR move is to help improve working conditions there, not move work to the US that we don't have skilled workers for.
post #52 of 65
Quote:
Originally Posted by esummers View Post

Apple is already sustainable in most respects, so I imagine the cost would be on the low end of the spectrum to improve working conditions.

On the post consumer side with less packaging, more recyclables, however it does nothing to address the pollution generated or the careless hazardous waste disposal occurring during the manufacturing process in the host country. Maybe I am not aware of Apples efforts in that area or I may have misunderstood your remark. Please correct me if I am in error.

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post #53 of 65
Quote:
Originally Posted by mstone View Post

On the post consumer side with less packaging, more recyclables, however it does nothing to address the pollution generated or the careless hazardous waste disposal occurring during the manufacturing process in the host country. Maybe I am not aware of Apples efforts in that area or I may have misunderstood you remark. Please correct me if I am in error.

There are many instances of Apple eliminating hazardous waste from their products so they don't have to worry about disposal. They use aluminum heavily which is good for the environment. They are the only company to create flexible cables without PVCs. Their glass is created in a sustainable fashion. Apple audits their suppliers (and suppliers of suppliers of suppliers) waste disposal practices all the way to the raw materials being extracted from the ground. No other company does this. Really the only place where there is some concern is in electric power generation, but I would put that low on the list anyway. Certainly this is a major problem in China, but Apple is not a large contributor to it. Read Apple's annual environmental auditing reports if you want more information on this.

As I said, working conditions are the biggest difference Apple could make through their supplier contracts. It feels like that is starting to become their new target now that they have their environmental footprint dealt with fairly well. The world expects companies like Apple to set an example so Apple seems to be willing to take on the challenge. Hopefully their actions are used to set policy in the future. As the gap between Apple and other companies widens everyone else will be compared to Apple. Definitely not a bad place to be, but it does take a lot of work to get there.
post #54 of 65
Quote:
Originally Posted by esummers View Post

Really the only place where there is some concern is in electric power generation, but I would put that low on the list anyway. Certainly this is a major problem in China, but Apple is not a large contributor to it.

As I said, working conditions are the biggest difference Apple could make through their supplier contracts.

Do we really know how chemicals are used in manufacturing processes - not just the chemicals that end up in the finished item? Recent example was the chemicals used to clean the screens during assembly was toxic. China is ruining their environment at an astounding pace. All of the US companies manufacturing products in China are doing so at the expense of China's environment.

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post #55 of 65
Quote:
Originally Posted by cgc0202 View Post

I do not believe the credibility of this article. It would be out of character for a self-respecting Chinese businessman to allow such meddling. People here in the West might think that Chinese business leaders are like the peons of some banana republic. But this is far from reality if you ever interacted more intimately with Chinese business people.

I never heard of a company allowing even a partner, to meddle in the manner described. If ever there was any concession on the Chinese part, to save fact, what could have happened would be a renegotiation of the contract to allow such changes in wages.

However, it is highly unlikely because companies, like Foxconn has manufacturing contract business with other Western companies. There would be unrest in China, which is not unheard of these days, if there is such a disparity in wages within the same company.

Until recently, that would all have been true. In the past few years, Chinese manufacturers have opened up quite a bit. For example, Apple was able to audit their books this spring with the underage employee allegations.

Foxconn is in a tough position. They are starting to get a bad name in the world press and need to address that. Opening up a little bit is less painful than making real changes, so it wouldn't surprise me to see that happen.

Quote:
Originally Posted by cgc0202 View Post

Labor is about 40-70% of cost. It can even be higher in certain settings. Let's just grab numbers out of thin air.

If labor in China may be around $2; at 10h/d; 6days a week and 50 weeks per year, that is around US$6000, more than twice the estimated average annual income of a person in China. No health insurance, no liability insurance (workmen's compensation), etc.

Just consider $8/h minimum wage [When Republicans had their way, with the support of many business lobby groups, they were successful in ensuring that the minimum wage was lower than this in 2007***]. However, even with $8/h, at 8h/d; 5days a week and 50 weeks per year, that is $16000 per year before taxes, before health insurance, before SS deductions. This will be still poverty level in the US. That is why many family breadearners work two jobs and weekends just to make ends meet.

Many states like CA, especially in unionized settings. have minimum wage much higher than the above,

Do the math. More than likely at $8/h, the labor cost alone will more than wipe out the profit of Apple.

Be very careful when playing number games. First, actual labor costs in the US are far greater than $8. Even at minimum wage, by the time you add in overhead and taxes, it's over $8. And few manufacturing jobs pay minimum wage.

Also, the claim that labor is 40-70% of cost is far too simplistic. I know companies where labor is around 7% of costs and others where it's more like 80% of costs - and even those aren't the extremes.

In any event, I agree with you that bringing manufacturing back to the US on a large scale is impractical at this point. But since I have typically focused on businesses where labor costs are a relatively small portion of total cost and where lead time is critical, I have been able to avoid outsourcing so far.

The biggest thing that people can do is petition their representatives to put increased pressure on China to allow their currency to float. It won't provide immediate gratification, but would, in the long run, have the greatest impact on creating a level playing field and bringing some manufacturing back to the US.

Just don't expect products with high labor content to EVER be made here.

Quote:
Originally Posted by anantksundaram View Post

Are you sure the quality can be matched stateside today? (This is a serious question.)

You should not underestimate the obsessive attention to quality in some of these production/assembly lines of foreign manufacturers in Asian factories, including in China. I am not suggesting that all of them have it -- many do cut corners -- but I would imagine a company like Apple brooks no quality deficit among its suppliers.

I've dealt with products manufactured around the world. While there is an obsession with quality in many Asian countries, it's nothing that can't be done here with strong management. Look at some of the results from Lean Organizations for examples.

Quote:
Originally Posted by Bowser View Post

So wanting to revitalize the manufacturing base in the US is misguided and not beneficial to the world economy? .

Very few people would say that it's BAD to revitalize U.S. manufacturing. Lots of people would say it's impractical or not likely to happen, though.

The big issue is that it's nearly impossible for one company to swim upstream against societal trends - no matter how healthy that company is. Eventually, they harm themselves immensely. We need to make changes as a society and not as a single company.
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post #56 of 65
Quote:
Originally Posted by mstone View Post

Do we really know how chemicals are used in manufacturing processes - not just the chemicals that end up in the finished item? Recent example was the chemicals used to clean the screens during assembly was toxic. China is ruining their environment at an astounding pace. All of the US companies manufacturing products in China are doing so at the expense of China's environment.

Most of these chemicals are reused and don't escape in the environment. Apple does audit waste disposal. Often these problems are related to ignorance instead of cost savings. We have the same problem here in the US. Obviously the chemical to clean the screens was the result of a manager not following proper procedure for this chemical. That is why it is important for Apple to continue auditing these companies and hope the employees feel safe to come forward when they see something that doesn't look right. Most of China's pollution comes from smaller companies and companies farther down the supply chain the usually audited by american companies. Large companies like foxconn that manufacture for well known brands need to have better practices to keep their contracts.
post #57 of 65
Quote:
Originally Posted by justbobf View Post

Well, if so, that is a start for Apple. Apple rakes in billions of dollars in profits; profits gained by either overcharging for its products, or, more apparently, underpaying its employees. Remember, it is how we treat the least amongst that really counts.

You are totally wrong on this one. The people who assemble Apple's products are employees of the manufacturer not Apple as is the case of all companies that don't make the products they sell, i.e. Apple, Dell, Walmart, CVS, Target, Macy's to name just a few.

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post #58 of 65
Quote:
Originally Posted by Maestro64 View Post

For those of you who have no clue about how labor works in China let me enlighten you. Besides the fact that the China government promotes companies to do what ever they can to make a profit and employ as many workers as possible they also put in place laws to protect those works, like the work week can only be 36 hours, unlike here in the US which is 40, they also limit how much over time they can be forced to work but as it was pointed out in the article companies get workers to waive those rights, how they go about that is probably both good and bad.

From the worker side, even though they only make $130 a month this is far more than they would have made working on the family farm if they did not have factory job. Usually these are women who are lucky to be alive since the families usually killed baby girls or gave them away for adoption. These women usually come to the factory areas or big cities to get a job around the age of 18, they usually work for about 7 to 10 years before they return to their home town to stay and get married with thousands of dollars in hand. They usually have far more money than most of the people in their little farm town. Yes some are forced to work over times, but others do it without a problem because it allows them to make and save more money.

Believe it or not, there is a labor shortage in China due to the one child law that China put in place 20 years ago. Many families now only have one child which happens to be a male and most factories which required skills which most males do not have or choose not to do like being able to do repetitive tasked over and over again without getting board.

You all may be shocked by the low wages, but these people see it as step up from what they otherwise would have had.

BTW, Foxconn employees over 800K of workers, and what do you think the likelihood that someone of them are not stable and probably would have killed themselves whether they were working for foxconn or not. Last time I check we have 13K of teen killing themselves every year and we blame everything form TV, music or peer pressure as the reason, I wonder how many of them worked for McDonald with minimum wage, that would be an interesting correlation.

You have got to be kidding me. Are you a communist party mouthpiece??? What about all the harmful chemicals they're inhaling the work conditions, etc. The apathy of these apple apologists is sickening
post #59 of 65
Quote:
Originally Posted by OC4Theo View Post

These overworked workers deserve every penny they can get. I think Apple should divert 2-5 percent of their annual profit to the well-being of these workers, some of whom are going to be permanently injured by the chemicals used to manufacture these profitable gadgets.
But then, you realize that the reason for moving these manufacturing is the first place is to maximize profit.

Will Apple help the Chinese workers? The jury is still out there.

How in the world can you assume from where you're sitting what the conditions in China are? Are you a psychic?

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post #60 of 65
Quote:
Originally Posted by jmmx View Post

Apple should give them stock. That would be an even greater incentive!

Well, let's just bring them all over to the US and give them houses and health care also... why stop at stock? Heck, it's exactly that brand of genius that's making our country a shining city of gold!

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post #61 of 65
Quote:
Originally Posted by cmf2 View Post

Production facilities will come stateside again when robots can do all the work (and until they form a union).

The more people can be removed from the assembly work, the greater the likelihood of a new American manufacturing trend. Perhaps nano-manufacturing or vastly improved 3-D printers for at-home manufacturing of replacement parts would do it.

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post #62 of 65
Quote:
Originally Posted by Netcrawler View Post

Think how disheartening it must be to make maybe just enough money to survive, while assembling devices (toys) for the rest of the world. Don't know how a token raise will help when there's little joy in life or job.

Ridiculous.

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post #63 of 65
Quote:
Originally Posted by Johnny Mozzarella View Post

Sounds like an opportunity for FOXCONN to raise the room and boarding fees it charges it's workers.

Most companies I'm aware of offer their workers free room and board and at least 1 free meal a day. Pretty good for the majority of factory workers who come in from the countryside where they earn approximately jack.

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post #64 of 65
Quote:
Originally Posted by franksmith22 View Post

You have got to be kidding me. Are you a communist party mouthpiece??? What about all the harmful chemicals they're inhaling the work conditions, etc. The apathy of these apple apologists is sickening

Thanks, Steve Ballmer. I'm sure you're really quite concerned about Apple's partner manufacturer's working conditions...

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post #65 of 65
Quote:
Originally Posted by franksmith22 View Post

You have got to be kidding me. Are you a communist party mouthpiece??? What about all the harmful chemicals they're inhaling the work conditions, etc. The apathy of these apple apologists is sickening

Have you ever been in a Foxconn Factory? Have you been in US factories?
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