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This weekend a video showing Foxconn guards roughing up an employee also leaked, raising questions over whether Apple's demand for secrecy is leading to employee abuse.   (Source: Shanghaiist)
Is the real story here the suicides themselves, or the abusive working conditions revealed by the investigation?

Last week we reported on a shocking expose conducted by the Chinese newspaper Southern Weekly which revealed harsh working conditions at a Foxconn plant that assembles iPods, iPads, and more.  The poor working conditions were brought into sharp focus after a string of suicides at the plant, including one questionable death of an employee that lost an iPhone prototype.

On Friday another employee took their life, raising the death toll to 8 this year. And along with the report came a recently leaked video of security guards at the company's Beijing facility allegedly beating up an employee.

Many questions surround the suicides and their potential connection to employee abuse.  Among the most common questions is whether the Foxconn suicide toll is abnormal.

Many observers have noted that China has a high suicide rate.  This is certainly true.  China's suicide rates have been slowly falling for the last several years, but they're still among the world's highest.  In 2007 the rate was at 286,000 suicides a year.  That's about 21.4 people per 100,000 people.  According to the latest World Health Organization figures, this rate has dropped to around 13.9 suicides per 100,000 people.

Given that figure, it would be easy to assume that Foxconn's Apple plant would typically have a suicide rate of about 46 people a year, given that it officially employs over 330,000 people (some reports have put the true figure at closer to 400,000 people).

However Foxconn's own statistics raise more questions regarding the situation.  Foxconn reported only 3 suicide deaths at the plant in 2009 (in line with the premise that a well employed work force has a lower suicide rate).  There have been no widespread reports of suicides at Foxconn motherboard plants this year.

The rash of recent suicides comes as employees have been being pressured to work long hours to fulfill demand for Apple's popular iPhones and iPads.  Also there's the recent video and fresh reports of security staff antagonizing employees in wake of Apple's demand for unparalleled secrecy at the plant.  One of the three suicides that occurred at the plant last year came after security staff beat an employee who lost a prototype of the fourth generation iPhone.  Foxconn guards have also beat up reporters trying to interview workers at Apple's secret plant.

Apple's own recent internal audit complained that many of its suppliers were engaging in abusive working practices, including forcing employees to work unpaid overtime, and using child labor.  It did not tell which suppliers were found in violation.

It is important to consider that Apple is certainly not the only company whose products are manufactured by Chinese employees reportedly working in poor conditions.  Intel, Nintendo, Sony, Dell, Hewlett Packard, Microsoft, and Amazon are among Foxconn's other customers.  Nonetheless, the pressure in terms of secrecy at these facilities (and corresponding employee abuse) may not be quite as high.

At the end of the day, the question now becomes how to receive these numbers.  Are they acceptable given that they still seem better than China's population as a whole?  Or are they unacceptable given the reportedly hellish working conditions at the plant, that may be directly causing the suicides?  And regardless of that debate, should the true story here perhaps be that the workplace conditions at Apple's manufacturing partners border on abuse?

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Why can't we do anything about this?
By corduroygt on 5/23/2010 11:44:45 PM , Rating: 2
I am against protectionism, but still, can't we pass a law that bans such companies from selling their products in the US?

RE: Why can't we do anything about this?
By sleepeeg3 on 5/24/2010 2:21:24 AM , Rating: 2
Apparently you are for protectionism.

We basically wouldn't have computers to debate this on DailyTech if there were no Foxconn. Those support brackets around the CPU on every motherboard? Foxconn. Many motherboards, PCBs for peripheral cards, etc are directly manufactured by them and just rebranded.

I would support getting rid of Apple, though. :)

By corduroygt on 5/24/2010 4:11:27 AM , Rating: 3
I doubt that making sure Foxconn doesn't beat its employees would cause an increase in our computer prices. Also, if Foxconn won't comply, we still have Asus and others to take its place.

By semo on 5/24/2010 5:11:05 AM , Rating: 2
+1 for getting rid of Apple.

Also, money is just someone elses labour. Metal and silicon are just dirt and rocks. Most of what you pay for a product is labour costs and if you want something cheap then someone along the chain would have to be beaten into submission until they give out their labour for almost nothing.

China, India, etc.. provide you with cheap goods because they are cheating, i.e. they are getting much more labour time than they are paying for.

I've come across people that sew garments which end up with versace and armani labels and these people get paid onlye a few cents per cotton tshirt. They are so quick to make that the employees end up getting an average working class wage... and that's in a non-3rd world country

RE: Why can't we do anything about this?
By theapparition on 5/24/2010 10:15:39 AM , Rating: 5
We basically wouldn't have computers to debate this on DailyTech if there were no Foxconn.

Thanks for the laugh.

Computers predate Foxconn by many, many years. Foxconn are not designers, innovators or anything of the sort. They are contract manufacturers, that's it. The only reason they have a large percentage of the market now is because they are cheap. Very cheap.
Thier labor rates are so ridiculously low because they force thier workers into virtual servitude.

I'm not going to get into the debate about the morals of making thier employees work 16hour days for months on end, but if Foxconn were to disappear tomorrow, computers would still be here, would still be fine, but might cost a few dollars more. That's the only effect Foxconn has on the industry.

By erple2 on 5/26/2010 3:33:47 PM , Rating: 3
Computers predate Foxconn by many, many years. Foxconn are not designers, innovators or anything of the sort. They are contract manufacturers, that's it. The only reason they have a large percentage of the market now is because they are cheap. Very cheap.

I remember when computers predated Foxconn. You could get an Apple Lisa for under 10,000 USD (that's 1983 USD). You could also get the far less expensive Macintosh in 1984 for a cheap 3000 USD.

Innovation doesn't have to simply mean doing something first. Doing it cheaper, faster, more consistently, and being able to deliver said products to a previously un-represented (not just underrepresented) consumer is also innovation.

You wouldn't be able to do what you're doing today because the cost of the hardware would be prohibitively expensive that communities "on the internet" may not exist as we know them if companies like Foxconn didn't drive down the cost of hardware to such an insane degree.

You could make the argument that if Foxconn didn't exist today, someone else would have made computers far more affordable, and therefore more ubiquitous. But I'd argue that isn't necessarily the case. Computers weren't really "in the mainstream" until relatively recently (at least, not to the extent they are today). Because there are Foxconn's of the world, the heavy hitter players in the internet discovered there was an untapped market for small consumers (not those that need/want to spend > 3000USD for a computer).

RE: Why can't we do anything about this?
By erple2 on 5/26/2010 3:35:34 PM , Rating: 2
I'm not going to get into the debate about the morals of making thier employees work 16hour days for months on end,

Then you clearly don't in the software business. :)

OK, OK, it's only 12 hour days for the past months on end...

RE: Why can't we do anything about this?
By AnnihilatorX on 5/27/2010 12:28:26 PM , Rating: 2
I think if Blizzard stop banning gold farmers from China, people would have better paid and life (at least it's 16 hours on a computer game not staring at some iPads)

By phxfreddy on 5/28/2010 7:06:26 AM , Rating: 2
Rate of suicide in china : 13.9/100,000 per year
Number of Foxconn employees: approximately 400,000
Number of suicides since the beginning of the year: 10
Annualized foxconn worker suicide rate for the first 5 months of 2010: 6.0/100,000, or less than half the rate of China

So I am left concluding some anti capitalist is pushing the Foxconn story.

By KaTaR on 5/28/2010 1:52:32 AM , Rating: 3
I know it's hard to believe after reading the one-sided blogs, but the truth is Hon Hai / Foxconn treats their employees far better than the other EMS companise is China. Unfortunately their better treatment of their employees is what has lead to this problem. No way right? keep reading.

Hon Hai / Foxconn is the only Chinese EMS company that gives its minimum wage workers free insurance that pays their families 100,000 RMB in the event of a death, any death (including suicide). That is around 8.5 years worth of gross earnings at the minimum wage level in Shenzhen (1100 RMB per month). For inland China (where all the assembly workers come from) its closer to 14 years worth of minimum wage gross earnings (650 RMB per month).

They got the insurance for free because Hon Hai was trying to be better than the other true 'sweatshops' out there. They pay higher wages (they are not the cheapest assembler) and benefits. Their peers do not (inlcuding Asutek, BYD, etc). It's simple business 101: A company doesnt get that successful and big (20% of all EMS outdourcing, HP, Apple, etc) unless they treat all their stakeholders well. If they were really treating their workers as bad as this blog makes it out to be they would have been out of business years ago. No major US company would have risked the brand image to save a few bucks here and there. Unfortunately, I think the death insurance amount is so big (14 years worth) that it attracted a few people who wanted to cash in.

Think about it. People have a choice where they work (even in China). They choose to travel a long way from inland to Shenzhen to work specifically for Hon Hai / Foxconn. They could have stayed local, or worked for some other factory, etc. Their economy is booming, they are not desperate. They can also quit and go home if they do not like it. It's not a walled city, just a bunch of buildings clustered in an area the size of around 10 city blocks within the city of Shenzhen itself. They can walk out if they dont like it.

So I think the added benefits lead to this mess by attracting a few people who wanted to take advantage. As a result of this media frenzy, the Shenzhen goverment recommended that Hon Hai / Foxconn cut the free insurance benefits to the minimum required by law, which is 9000 RMB (1 - 2 years of gross minimum wages).

Lets see what happens to the suicide rate once the financial incentives are gone. The sad part of the story is that benefits for all the decent hard working Chinese are getting cut (at the request of the goverment) because of this media frenzy. Well at least you now know the truth. And Mick, have some self respect and do some friggin research before you write man. At least try and present both sides of a story.

"If you mod me down, I will become more insightful than you can possibly imagine." -- Slashdot

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