Report: Apple Cuts 0.7 Percent of iPad Profit to Give Factory Workers Big Raise
May 31, 2010 9:15 PM
comment(s) - last by
Apple will lose 0.7 percent of its iPad profits to give the workers that assemble its device a 20 percent raise. Workers at Foxconn are currently struggling after a string of suicides and enduring reportedly poor working conditions.
(Source: Kin Cheung/AP)
A small cut to Apple's profit margin may make a big difference in workers' lives
It took a
string of suicides
to spur it to action, but Apple is finally taking a big step towards trying to ensure that the workers who build its bestselling iPads, iPods, and iPhones enjoy a decent standard of living.
Apple's products are almost entirely manufactured by Foxconn, a China-based unit of Taiwan's Hon Hai Precision Industry. Foxconn builds the sleek devices at its Shenzhen plant in Southern China. While many companies (Microsoft, HP, Dell, Nintendo, Sony, etc.) utilize Foxconn's manufacturing services, the Shenzhen facility primarily serves Apple -- and it's also the site of all of the recent suicides.
The suicides were perhaps foreshadowed by an internal probe by Apple that revealed that several of its international manufacturing partners were
committing abusive employment practices
, such as using child labor or demanding unpaid overtime. According to reports, the latter was
at the Shenzhen facility.
by Chinese news organization
, Apple has now quietly committed a dramatic gesture, offering to finance the majority of the
20 percent raise
in pay to the Shenzhen workers. The raise was long promised to workers, but had remained undelivered for some time now.
The 20 percent raise will cost Apple a little, but not very much. It is estimated to raise the costs of labor for the iPad from 2.3 percent of the cost to 3.0 percent of the cost. Apple still looks to make hundreds in profit off of each unit sold (breakdowns estimated Apple makes
at least $200
per iPad sold).
For the Foxconn workers living in the factory city of Shenzhen, though, the raise will make a world of difference. While some will question why Apple didn't push for higher wages in the first place, it's important to appreciate that it is at least taking action now. One can only hope that HP, Dell, Microsoft, and others step up to the plate and offer to subsidize similar raises at their manufacturing locations -- even if they haven't been struck by the spate of suicides that occurred at Apple's plant.
Apple has not yet officially acknowledge the report, though it has previously stated that it was
concerned about the working conditions at Shenzhen
and that it was evaluating its options.
In other news,
a fire broke out
at the Shenzhen plant this week. It reportedly was unrelated to the suicides. The fire did not do any major damage to equipment, according to reports, and is not expected to impact Apple's production schedule.
This article is over a month old, voting and posting comments is disabled
RE: We're sorry...
6/1/2010 2:12:26 PM
So do you believe Apple should build the iPad in the U.S. and have it
$500 (or more) a piece just to build the cheepest model? Or do you believe Apple should force U.S. wages and working conditions on Foxconn?
Apple has already forced Foxconn to make conditions significantly better than they were a few years back. The other companies using Foxconn did not force the change. Apple did. Apple did it for PR purposes, but Apple forced the changes.
Do they still have a LONG way to go by U.S. standards? Yes. But unless you believe Apple can sell the most basic iPad for 50% more than they currently charge, Apple will not be able to change these conditions overnight.
Do you think no other electronics company uses Foxconn? Do you think no other electronics company uses companies worse than Foxconn?
If you want to not support anything like Foxconn, you'll be stuck buying boutique equipment. There is no way around it other than that. Name any major consumer electronics company and they use Foxconn or companies like Foxconn with working conditions like Foxconn or worse.
"I mean, if you wanna break down someone's door, why don't you start with AT&T, for God sakes? They make your amazing phone unusable as a phone!" -- Jon Stewart on Apple and the iPhone
Foxconn Retracts Letter Asking Employees Not to Kill Themselves
May 28, 2010, 8:51 AM
Foxconn Makes Employees Promise Not to Kill Themselves
May 27, 2010, 4:07 PM
Apple Responds to Foxconn Suicides, Foxconn Website Hacked
May 26, 2010, 6:01 AM
Report: Only Escape From Hellish Apple iPhone Factory Was Suicide
May 19, 2010, 3:25 PM
Apple Reveals Child Labor was Used to Build iPods, iPhones, and Macs
March 3, 2010, 8:55 AM
Retiree Sues Apple For $7,500 for Wiping Honeymoon Photos From His iPhone
November 30, 2015, 10:23 AM
iPhone 7 May Pack 3-4 GB Memory, More Storage; 4-Inch Comeback is Rumored
November 20, 2015, 10:12 PM
OnePlus One, OnePlus 2 Will Receive Android Marshmallow in Q1 2016
November 16, 2015, 9:58 AM
Lenovo Whoa: Motorola Droid MAXX 2 and Turbo 2 Break Cover in Leaks
October 26, 2015, 3:12 PM
Leak: Apple Preps for First Real Android App Foray With New Apple Music App
October 24, 2015, 1:59 PM
Pepsi Smartphone? Empty Calories Coming Soon to the Midrange
October 12, 2015, 11:41 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information