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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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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.

"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)

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