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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 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.


"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














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