at Foxconn Electronics Inc.'s Chengdu plant
last Friday have caused the original design manufacturer (ODM) to close all of
its workshops until they are inspected.
Foxconn, which is a subsidiary of Hon Hai Precision Industry Co., is based in
Taiwan and has several electronics factories across China. In fact, Foxconn is
China's largest electronics exporter for companies like Microsoft Corp.,
Nintendo Co., Dell Inc., Hewlett-Packard Company, Sony Corp. and Apple Inc.
On Friday, a Foxconn factory in Chengdu, which is known for assembling Apple's
iPad as well as iPad components, suffered fiery explosions that
killed three employees and injured another 15. Six of the injured employees
have been released while the other nine remain hospitalized for the time being.
Reports say the explosion was caused by a buildup of flammable dust over the
plant's polishing workshop.
Combustible dust is a known problem for electronics manufacturers, which
normally utilize pulverized plastics or aluminum for everyday operations. This
dust, being in fine particle form, presents a higher risk for explosions
because "more burnable surface area is exposed."
According to reports, a labor rights group called Students & Scholars
Against Corporate Misbehavior (Sacom) had warned the Foxconn plant about the
excess dust during an investigation back in March and April. The group noted
that at least part of the plant contained too much aluminum dust. In addition,
Sacom published its findings in a report on May 6 saying that employees even
complained about inhaling the dust. But as of right now, it is unclear if
Sacom's report specifically mentioned the scene of the explosion.
Now, Hon Hai has announced that all of its workshops that are responsible for
polishing electronic products and parts are closed
until further notice. Further inspections will determine when the
workshops will resume, but a spokesman for Hon Hai estimates that inspections
could take about two days.
"The workshops could be back online as soon as they pass the test,"
said the Hon Hai spokesman.
Temporarily closing these workshops is absolutely necessary for safety-related
reasons, but Foxconn recognizes that these closings could also negatively
affect the world's electronics supply. Since Foxconn is one of the leading
electronics assemblers, an extended suspension could cause an inventory buildup
as well as an inability to finish products, causing disruptions throughout
certain processes like packaging. In addition, Foxconn may have to hire
expensive labor in Shenzhen, and could even potentially lose major contracts to
competitors like Taiwan's Quanta Computer Inc. or Singapore's Flextronics Inc.
While last week's tragic event presents new problems for Foxconn, it isn't the
first setback the ODM has experienced in recent years.
Foxconn's Apple plants seem to be a problem in particular due to the tech
giant's popularity and pressure to produce quality products at low prices and
higher quantities. With Apple being Foxconn's biggest client, Foxconn didn't
hesitate to do whatever it took to meet Apple's demands.
Last year, the Chengdu plant was opened just to increase manufacturing of
Apple's ever-popular iPad and iPad 2. The plant was placed in Chengdu because
labor is cheaper there, and it would decrease overall costs.
During that time, employees who worked in Foxconn's Apple plants started to
complain about the terrible working conditions. Many employees even committed suicide to
escape Foxconn's increasing pressure and horrible working conditions.
Foxconn handled the situation by issuing contracts that
forbid employees from committing suicide, as well as offering pay raises and
installing anti-suicide nets.
Apple has only praised Foxconn for working so diligently on its products, and
feels it is not to blame for the suicides. Apple has not commented on Friday's
While there's no telling exactly how long inspections will take on the
polishing workshops, Hon Hai insists its only concern is in regards to the
employees who were hurt or killed by the explosions.
"Our focus now is on providing support to the families of the deceased
employees and ensuring that the injured employees have all the medical care and
other support that they require," said Hon Hai's spokesman.