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Foxconn factory in China  (Source:
According to Apple executives and Foxconn management, safety is the last thing on Apple's mind

For hardcore Apple fans, rushing out to buy the next iPhone or iPad is a top priority -- even if it means standing in line for hours. But in the words of an anonymous former Apple executive, most people would be disturbed if they knew where their iPhone came from.

Apple's history with suppliers that are abusive to their employees is no secret. Foxconn and Wintek are among Apple's electronics suppliers that have factories in China with horrible working conditions, but no matter how many times violations of Apple's supplier code of conduct are brought to light, the situation remains the same. Now, The New York Times has taken a closer look at the bleak environment that the employees of Apple's Asian suppliers are forced to deal with in its second installment of its iEconomy series.

Apple's supplier code of conduct, which was developed in 2005, states "that working conditions in Apple's supply chain are safe, that workers are treated with respect and dignity, and that manufacturing processes are environmentally responsible." While this code was made with good intentions, it is not being upheld entirely by Apple or some of Apple's suppliers. Employees have complained of working long hours, unsafe working conditions and little pay -- all in the name of assembling iPhones, iPads and iPods at a rapid pace.

"You can either manufacture in comfortable, worker-friendly factories, or you can reinvent the product every year, and make it better and faster and cheaper, which requires factories that seem harsh by American standards," said a current Apple executive, who requested anonymity due to the sensitive topic. "And right now, customers care more about a new iPhone than working conditions in China."

Foxconn, which is Apple's electronics supplier in Chengdu, China, is one of the worst offenders of Apple's supplier code of conduct. Employees and worker advocates have both described the horrible conditions that workers must endure. Many work over 60 hours per week, putting in an obscene amount of overtime. Some work 12 hours per day, six days or more per week. Signs on the walls of Foxconn offer reminders such as, "Work hard on the job today or work hard to find a job tomorrow." There are 24-hour shifts, and 70,000 of the employees are crammed into tiny dorms when they have some time off. At times, about 20 workers would be stuffed into a three-bedroom apartment. There were also issues with the employment of under-age workers.

As if exhaustion and crowded living spaces weren't enough, the conditions within the actual factory were well below satisfactory. Aluminum dust clouded the Foxconn factories due to machines that polished iPad cases, and the factories had poor ventilation systems. A Hong Kong advocacy group called Students and Scholars Against Corporate Misbehavior published a warning, which was sent to Apple, to let the company know about the potential dangers of aluminum dust buildup.

The warning clearly went unnoticed, since two Foxconn factories exploded as a result of the aluminum dust. The first occurred in May 2011 in Foxconn's Chengdu factory, which killed four people and injured another 77. The second occurred in Shanghai and ended up injuring 59 workers while hospitalizing another 23.

The explosions weren't Foxconn's only high-profile issues over the last few years. In 2010, Foxconn's Shenzhen factory, which is responsible for Apple's iPods, iPhones and iPads, experienced a series of employee suicides due to the stressful and exhausting working conditions. There were at least 12 suicides during this time period as well as a riot. To address the issue, Foxconn made employees promise not to kill themselves and installed anti-suicide nets at its facilities.

"Conditions at Foxconn are anything but harsh," wrote Foxconn in a statement after the riot. "All assembly line employees are given regular breaks, including one-hour lunch breaks. Foxconn has a very good safety record. Foxconn has come a long way in our efforts to lead our industry in China in areas such as workplace conditions and the care and treatment of our employees."

Even Apple seemed to defend its supplier's factories overseas. Steve Jobs, former Apple CEO, made the factories sound like theme parks.

"I actually think Apple does one of the best jobs of any companies in our industry, and maybe in any industry, of understanding the working conditions in our supply chain," said Jobs. "I mean, you go to this place, and, it's a factory, but, my gosh, I mean, they've got restaurants and movie theaters and hospitals and swimming pools, and I mean, for a factory, it's a pretty nice factory."

Jobs' statement seems to contradict the company's own audits, though. Apple has been publishing audits of its supplier's factories since 2007, and completed 396 walkthroughs by last year. Each year, there have been several and consistent violations to Apple's supplier code of conduct. For instance, in 2007, Apple completed three dozen audits where two-thirds demonstrated employees working over the 60 hour limit. There were also cases of underage workers, falsified records, improper disposal of hazardous waste and cases where workers were paid below minimum wage (or even nothing at all) as punishment.

"Apple never cared about anything other than increasing product quality and decreasing production cost," said Li Mingqi, a former Foxconn Technology manager at the Chengdu factory. "Workers' welfare has nothing to do with their interests."

Source: The New York Times

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RE: Waiting for the ironic comment
By MrBlastman on 1/27/2012 10:47:58 AM , Rating: 2
what about those shareholders who have invested many times that?

Shareholders? Really, you seriously are going to argue based on that? Okay, fine. Let's take a look. :) I'll even play fair by not picking the lowest point.

April of 2008, AAPL was 173.95 at close, today, AAPL is 445.49. That's in just shy of four years. That's a total return of 156%.

Hmm, they've not only doubled their money in less than five years, they've done way better. Average return a year is expected to be around 5-7%. If you go by long-term averages, it might be 11%. If you look at the last few years, most investors are lucky to have broken EVEN in that same timespan in any other company They have far exceeded this. AAPL has been a complete WIN for anyone holding the stock. There is no need to pay any of these profits to these shareholders.

The thing you don't get is--Apple is now an industry leader. They no longer are the little guy. They are THE guy to beat now. They should be leading by example at this point rather than pulling the whole: "Hey man, it's hip to support Apple because we're bringing down the man!"

They have the profit levels now to easily support infrastructure expansion within our nation. Instead of building some stupid, round fancy corporate headquarters, build factories to do things right, here.

RE: Waiting for the ironic comment
By Reclaimer77 on 1/27/2012 10:57:53 AM , Rating: 2
They have the profit levels now to easily support infrastructure expansion within our nation. Instead of building some stupid, round fancy corporate headquarters, build factories to do things right, here.

Until you acknowledge the decimation of our manufacturing base, and the root causes of that, it's hard to take you serious when you say things like this.

The iPhone cannot be built in America. It just can't. It's really sad that you wont admit this.

By StevoLincolnite on 1/27/2012 7:43:54 PM , Rating: 2
The iPhone cannot be built in America. It just can't. It's really sad that you wont admit this.

Actually... I wouldn't be surprised if it could be built in the US as Apple has such a fat profit margin.

Plus the US Minimum wage is something like only $7 isn't it?
With the dollar worth so low, would be interesting to see if it could be done.

But worker pay shouldn't be an issue, $7 an hour is a pittance when Apple is making $400,000+ profit per employee.

RE: Waiting for the ironic comment
By xti on 1/30/2012 12:10:19 PM , Rating: 2
so...they should give up some profit, because they already 4x'd their investment?

its maximizing profit. not maximizing profit - $1.00.

would it be a nice gesture? sure. but i dont log onto etrade and try to find someone who wants to help the environment or some other crap, im trying to make money.

"We’re Apple. We don’t wear suits. We don’t even own suits." -- Apple CEO Steve Jobs

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