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Foxconn is giving the parents of its worker who commited suicide after the company harassed him a payoff, in hopes of quieting the matter.  (Source: PSD Blog)
Company hopes that payment will lay matter to rest

Apple and its Chinese iPhone manufacturer Foxconn made headlines when an employee Danyong Sun committed suicide.  The circumstances were anything but ordinary.  Mr. Sun had been given a set of never-before-seen iPhone fourth generation prototypes to deliver for testing.  He lost one of these prototypes and was subsequently the victim of a burglary and assault, reportedly by his employer's security division.  He then committed suicide.

Following initial statements by Foxconn and Apple, new details have emerged.  Foxconn has announced that it will pay off the family of Mr. Sun in hopes of laying the matter quietly to rest.  It has agreed to pay his parents a lump sum of $52,000 and a yearly payment of $4,400 for the rest of their lives.

The government is still investigating the incident.  Apple says it will wait until that investigation finishes before it takes action.  The main subject of the investigations is Mr. Gun Qinmin a security supervisor.  Mr. Qinmin insists that he's innocent, though he admits to sending people to search Mr. Sun's office.

The average salary of a worker in one of China's cities was 5,000 yuan ($3,560 USD) in 2007

The incident continues to highlight both Apple's veil of secrecy about its products and the pressures that young engineers in China face.  Officials with both Chinese companies and government agencies have a history of taking severe tactics at times to stomp out improper behavior.  China publicly executed its former food and drug administration head in 2007 when he was found guilty of taking bribes.

Despite the potential dangers associated with manufacturing products in China, most major electronics manufacturers build their products in China due to the lower cost of skilled labor.  Product design and testing is also increasingly being sourced to China.



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If only...
By The0ne on 7/28/2009 2:54:27 PM , Rating: 2
quote:
Officials with Chinese companies and government have a history of taking severe tactics at times to stomp out improper behavior. China publicly executed its former food and drug administration head in 2007 when he was found guilty of taking bribes


If only they were strict on this rule. Sigh. Sadly, if they did there would be millions executed, with many holding offices.




RE: If only...
By MozeeToby on 7/28/2009 3:06:04 PM , Rating: 5
The quoted text probably should have continued... "found guilty of taking bribes that led to dozens of deaths and the loss of literally millions (billions?) of dollars in trading revenue". Most bribes, while abhorrent, don't reach that level of harmfulness.


RE: If only...
By FITCamaro on 7/28/2009 4:05:11 PM , Rating: 5
If we did this here, there might be 5 people left in Congress or the White House combined.


RE: If only...
By lightfoot on 7/28/2009 5:09:34 PM , Rating: 5
Obama's two daughters... Who are the other three?


RE: If only...
By twjr on 7/29/2009 6:27:35 AM , Rating: 3
Their dog?


RE: If only...
By DigitalFreak on 7/28/2009 6:07:20 PM , Rating: 2
Maybe 5 if you included all the state and local governments as well.


$52,000
By lightfoot on 7/28/2009 3:26:18 PM , Rating: 5
They paid the family? I guess that makes everything alright. Clearly the value of a human life is not worth much in China.

quote:
The average salary of a worker in one of China's cities was 5,000 yuan ($3,560 USD) in 2007

However the average engineer's salary in China is about 5-10 times the average salary in China.

$52,000 is both a joke and an insult. Apple should be very proud of their supplier's cost cutting initiative.




RE: $52,000
By lightfoot on 7/28/2009 3:37:56 PM , Rating: 2
quote:
a 25-year-old college graduate working in product communications

My apologies, it wasn't an engineer, just a marketing kid. But probably still earned significantly above average.


RE: $52,000
By Rookierookie on 7/28/2009 4:09:46 PM , Rating: 2
That's not the point. The average cost of living, even in the rich cities, is close to one-tenth of that in the US.

I haven't paid much attention to Chinese economics lately, but I believe that even now, $1000/month is what a highly trained professional can expect to earn.


RE: $52,000
By lightfoot on 7/28/2009 5:07:19 PM , Rating: 5
Part of the reason that cost of living is one-tenth is that most professionals have their housing provided by the employer. Thus your entry-level $12,000 salary does not include such benefits nor are housing costs included in cost of living calculations. (Much like healthcare in the US - it's not counted as salary coming in, and isn't counted in cost-of-living on the way out.)

Thus the settlement of $4,000 per year + $52,000 is the equivalent to a lost income settlement to the parents, not a wrongful death settlement.

It is just enough to keep the parents quiet, not enough to act as a deterrent to prevent future abuses. In the US we allow punitive damages to compensate not only for the loss to the victim, but to punish the offender to prevent future violations. This however would require a functional civil court system, something that China does not have.


RE: $52,000
By Samus on 7/28/09, Rating: 0
RE: $52,000
By The0ne on 7/28/2009 6:11:42 PM , Rating: 2
An operator makes about 700-1000RMB per month. A superivisor makes about 1500/month. An engineer makes about 4000/month. A project manager makes about 6000-8000 per month. Its not much considering the cost of eating out is about the same in US for a decent restaurant. Last I check, Mcdonalds and KFC were almost the same price as here in the US, with portions being smaller of course. For example, their KFC drumstick is equivalent to the size of the drumstick on the chicken wing here :P I thought it was pretty funny hahaha

However, their cost of living is substantially cheaper than US. I mean really cheap. A crappy apartment can go for a few hundred RMB and a really nice one for about 2000. this 2000RMB apartment that our China project manager has is like a medium class condo...not your $2000 apartment. Problem is no one, I mean absolutely no one, takes care of the complex and in a few years the whole freaking building would be rusty, dirty and in dire need of repairs.

Still, things don't quite add up and it's pretty amazing how people still are able to survive there with the pay they get.


RE: $52,000
By zsunjian on 7/28/2009 6:23:43 PM , Rating: 2
quote:
$1000/month is what a highly trained professional can expect to earn.


Nope. That's only about 7000 yuan, which quite a few of my old friends were earning fresh out of college. And that was a few years ago. The housing in major cities in China have ballooned recently, with a decent condo in Shanghai often costing 2 million yuans and upward. Even the cost of food has increased tremendously in recent years. Their offer is meager in comparison.


comments on article
By CSMR on 7/28/2009 3:05:30 PM , Rating: 1
"Officials with Chinese companies and government have a history of taking severe tactics"
What's the connection between Foxconn and the Chinese government?

"Despite the difficulties associated with manufacturing products in China": what difficulties? The article doesn't talk about any difficulties.

"Pays iPhone Suicide Victim's Family $52,000"
You didn't value the annuity, the total net present value is about $150,000 depending on the parents' age.




RE: comments on article
By Spivonious on 7/28/2009 3:19:59 PM , Rating: 2
Yep, it seems low to us, but $150k is 30 years salary over there.


RE: comments on article
By ncheese on 7/28/2009 3:37:50 PM , Rating: 4
quote:
"Officials with Chinese companies and government have a history of taking severe tactics"
What's the connection between Foxconn and the Chinese government?


It says companies and government (the government added as a supplemental info, arguably irrelavent). However, Foxconn is a Taiwanese company - okay, some may argue is Taiwan a separate "country" (not the point of this) - but no one will argue that officials in Taiwan today are different than officials in China. So overall, I agree there is no connection. However, what the reporter is possibly trying to say is there is a connection between "Chinese Officials hired by companies" and "history of taking severe tactics".

quote:
"Despite the difficulties associated with manufacturing products in China": what difficulties? The article doesn't talk about any difficulties.


I think the issue is for Foxconn and Apple, who manufacture in China. In the end, Foxconn is directly responsible (with Apple getting some negative publicity) for it's employees. Thus, any industrial espionage (rampant in China, but also in other parts of world) and "reprisals" not authorized by Foxconn in Taiwan can occur.

My interpretation of the events is the Foxconn employee Mr Sun is suspected of stealing/selling the prototype phone. The head of security, Mr Qinmin, then shakes him down, mafia style at least once, resulting in buglary and assult charges filed. Now, it is possible either 1) Qinmin is threatening to expose him and ruin him, or 2) Qinmin continued threats/harrassments severly distressed Sun, or 3) Qinmin goes full mafia on Sun, and is covering it up to look like a suicide (or any other possibility). If these scenarios are true, it isn't good at all for Foxconn/Apple, even if Qinmin acted completely on his own because no matter what, he is an employee of Foxconn.


How is 5000 yuan = 3560 USD
By zsunjian on 7/28/2009 6:36:25 PM , Rating: 2
quote:
The average salary of a worker in one of China's cities was 5,000 yuan ($3,560 USD) in 2007


To DT, how is 5000 yuan equal to 3560 USD? Last I checked, the currency exchange rate is about 1 USD to 7 RMB (yuan), or 6.83 to be precise. Even if you're exchanging and translating monthly wage of 5000 yuan into a annual salary, you'd still not get $3560. You get (5000*12)/6.83 = 8784 USD. And in any case I doubt if any city in China has a average monthly wage even close to 5000 yuan. Major cities like Shanghai or Beijing probably have an average monthly wage around 1500 to 2000, I'd guess.
And this is besides the point. The income discrepancy between manual labor vs white collar jobs is much larger in China than in the US, and geographical income discrepancy is also huge. The average income in "one of China's cities" is hardly predictive of the earning potential of this young man.




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