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On Friday explosions ripped through Foxconn's iPad 2 factory in Chengdu, the capital city of China's southwestern Sichuan province.  (Source: AP Photo (top)/Reuters (bottom))

Three workers have died and nine others remain hospitalized in serious to critical condition.  (Source: China News)
Early reports indicate disaster at Chinese supplier was due to poor maintenance -- dust buildup

While the weekend came and went without the realization of doomsday, last Friday likely seemed like hell on Earth for workers at Foxconn Electronics Inc.'s Chengdu plant.  

On Friday explosions ripped through the plant, which has been labeled as one of the key assembly locations for Apple Inc.'s (AAPL) iPad 2.  Early reports indicate the explosions were triggered by a buildup in flammable dust over the polishing workshop of the plant.

As of Sunday, three employees died and fifteen others were hospitalized.  Of the hospitalized employees six have been released, but nine remain in the hospital, several of which are in critical condition.

The move is the latest setback for the troubled Taiwan-owned gadget manufacturer.  Foxconn is a subsidiary of Hon Hai Precision Industry Co Ltd. (2317).  Foxconn draws its labor primarily from the vast population of mainland China.  It is China's largest exporter and counts companies like Microsoft Corp. (MSFT), Sony Corp. (6758), Nintendo Co., Ltd. (7974), Dell Inc. (DELL), and Hewlett-Packard Company (HPQ) as clients.

But its biggest client is Apple, who has relied heavily on it to produce its Mac computers and popular i-device lineup.

Pressured by Apple to deliver better products at higher quantities and lower prices, Foxconn turned up the heat on its employees last year.  As a result the company saw multiple suicides, with employees complaining of "hellish" working conditions.  

The suicides shocked China; while suicide rates in mainland China are generally quite high, they are unusual among young working age males, particularly those who have factory jobs.  The majority of the victims were indeed young males.  

Foxconn responded with a variety of tactics -- contracts demanding employees not kill themselves, anti-suicide nets, investigation into replacing employees with robots, and pay raises to raise worker morale.  The company claims employees are lying about poor working conditions.

Apple has been pressured about the suicides, but remains defiant to the suggestion that it somehow was to blame.  In its annual labor audit, Apple praised Foxconn for working to improve worker conditions in the wake of the suicides.

The gadget maker refused to comment on its supplier's latest crisis.

Chengdu is the capital of China's southwester Sichuan province [Google Maps].

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By Motoman on 5/23/2011 10:41:07 AM , Rating: 5
1. Foxconn has been around essentially forever, and is one of the biggest ODMs the world has ever seen.

2. They produce products for a large number of big-name customers, and also sell stuff under their own brands.

3. No Foxconn business units have any trouble other than the Apple factories. Which are now infamous for horrible worker conditions, suicide rates, and now explosions due to poor maintenance.

One can infer that Foxconn is running it's Apple factories on a razor's edge of profitability...getting so little margin from Apple that it has no choice but to ignore all concerns other than running the factories at the lowest possible cost.

Sure, Foxconn should really just refuse to run a business unit that way...if the revenue from Apple won't support safe working conditions, let the contract go elsewhere. Foxconn is at fault for accepting Apple contracts that require it to run unsafe factories in order to make ends meet. But then again, Apple will just find another ODM who will be in the same position.

Apple consumer electronics: the new blood diamonds. We'll probably have activists throwing fake blood on consumers as they leave Apple stores in NYC soon.

RE: Hmmm...
By GulWestfale on 5/23/2011 10:54:29 AM , Rating: 1
there is nothing wrong here... 3 dead? that's probably less than the number of people who have killed themselves since christmas. and dust build-up? of course there is dust build-up! that's how we insulate the factories during winter, saves on heating costs! plus, the worker's footsteps are cushioned by the dust, improving their comfort levels! it's all really magical!

RE: Hmmm...
By Souka on 5/23/2011 11:09:17 AM , Rating: 2
RE: Hmmm...
By kattanna on 5/23/2011 2:35:45 PM , Rating: 2
No Foxconn business units have any trouble other than the Apple factories

are you positive about that? or could it be since they produce for apple, every action is reported?

RE: Hmmm...
By Motoman on 5/23/2011 4:34:41 PM , Rating: 2
are you positive about that?

Yup. We'd hear about it. And frankly, if all of Foxconn's plants worked like their Apple plants, they'd firstly not be anywhere near as big as they are...and secondly, probably bankrupt.

The world is far too connected to not find out about such stuff.

RE: Hmmm...
By sleepeeg3 on 5/24/2011 1:00:27 AM , Rating: 2
All publicity is good publicity!

RE: Hmmm...
By icanhascpu on 5/24/2011 2:24:00 AM , Rating: 2
No Foxconn business units have any trouble other than the Apple factories.

You mean none that youve heard of on the news?

One can infer

You mean you can take a wild guess that blames Apple because anti-apple gets an auto 5 at DT?

This is on Foxconnm and somehow assuming and guessing and spinning it as blood on Apples hands is pathetic.

RE: Hmmm...
By Motoman on 5/24/2011 10:45:13 AM , Rating: 2
You mean none that youve heard of on the news?

If you think for a second that in today's uber-connected world that employee suicides and factory explosions at other Foxconn factories could possibly be covered up, your tinfoil hat is at least 3 sizes too small.

You mean you can take a wild guess that blames Apple because anti-apple gets an auto 5 at DT?

It's not a wild guess. It's a rational inference.

This is on Foxconnm and somehow assuming and guessing and spinning it as blood on Apples hands is pathetic.

Good to see you ignored the part where I said Foxconn is at fault as well. Your Apple fanboyism is what's pathetic. Ultimately, YOU are the problem - as are all Apple consumers - for letting Apple get away with all of the BS it's done over the years and still buying all their products.

RE: Hmmm...
By TakinYourPoints on 5/24/2011 4:23:33 AM , Rating: 2
You talk as if Chinese factories producing for Apple are the only ones that treat their workers poorly.

Here's where Microsoft peripherals have been produced since 2003:

Employed for gruelling 15-hour shifts, in appalling conditions and 86f heat, many fall asleep on their stations during their meagre ten-minute breaks. For as little as 34p an hour, the men and women work six or seven days a week, making computer mice and web cams for the American multinational computer company.

They are not allowed to talk or listen to music, are forced to eat substandard meals from the factory cafeterias, have no bathroom breaks during their shifts and must clean the toilets as discipline, according to the NLC.

The workers also sleep on site, in factory dormitories, with 14 workers to a room. They must buy their own mattresses and bedding, or else sleep on 28in-wide plywood boards. They 'shower' with a sponge and a bucket.

Pretty much everyone is to blame here, not only Apple. The motherboard and video cards in my PC, my XBox 360, my PS3, my Nintendo Wii, and my various Apple products all come from Foxconn and other Chinese factories like it. I wish that their terrible working conditions would improve, I would even be willing to pay more (I doubt many would). Apple and Microsoft and everyone else "sends people" there to allegedly straighten things out, but who knows if that does any good past the short term.

Either way, it is ridiculous to use the widespread labor issues in China to push a personal agenda against one single company among many that benefits from the same system. Everyone is at fault (and yet I still buy...)

RE: Hmmm...
By Motoman on 5/24/2011 10:48:41 AM , Rating: 2
I'm not saying working conditions in other factories aren't sub-standard. I'm pointing out that at Foxconn, one of the largest companies in the electronics industry that the world has ever seen, the truly horrible employee conditions, suicides, and plant explosions only happen within their Apple business unit.

If all Foxconn factories were as bad as the Apple ones, there would be no correlation between these issues and their Apple business unit. But the fact of the matter is that the Apple business unit is clearly run very differently from the rest of their business...the logical inference being that they must be working with a vastly different revenue vs. expense model.

RE: Hmmm...
By inperfectdarkness on 5/25/2011 7:58:48 PM , Rating: 2
so THAT'S why apple has such windfall profits. i figured they couldn't be coming from just the end-consumer.

By Gondor on 5/23/2011 10:45:52 AM , Rating: 5
Magical dust exploded :(

It's a conspiracy!
By Schrag4 on 5/23/2011 11:23:59 AM , Rating: 4
The company claims employees are lying about poor working conditions.

Those conspiring employees! Working conditions are actually quite good but a few of them jumped to their deaths to try to get pay raises for everyone else.


Regardless of what people are saying...
By silverblue on 5/23/2011 3:17:34 PM , Rating: 2 thoughts are more with the three deceased workers and their families than whose electronic gizmos they were working on.

By Pessimism on 5/24/2011 10:27:07 AM , Rating: 2
That is why you will never lead a multimillion dollar corporation.

The official corporate line?
By cparka23 on 5/23/2011 12:26:02 PM , Rating: 3
Yes, they were holding it wrong.

By JarredWalton on 5/23/2011 10:39:54 AM , Rating: 2
"Early reports indicate disaster Chinese supplier was due to poor maintenance -- dust buildup"

Looks like you forgot a few words. Maybe: Early reports indicate the disaster at the Chinese supplier was due to poor maintenance -- dust buildup

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