Print 31 comment(s) - last by Gondor.. on Aug 9 at 10:35 AM

Apple isn't the only one

Apple, Inc. (AAPL) has been thoroughly scrutinized by everyone from semi-accurate monologists to writers for The New York Times for reported Chinese labor abuses.  Interest piqued after a string of suicides at a primarily Apple manufacturing plant in Shenzhen highlighted poor working conditions among employees.

Apple's own yearly audits acknowledge such issues -- such as occasional child labor violations.

But it's hardly alone.  Samsung Electronics Comp., Ltd. (KSC:005930), the world's top smartphone maker, is now being forced to answer similar tough questions. A report by the advocacy group China Labor Watch accused its supplier HEG Electronics of using child labor at a plant in Huizhou, China.

Samsung does perform regular audits of its Chinese suppliers, but the audits are subcontracted to local Chinese third-party firms, a practice some say opens the door for lies and corruption.  

In the wake of the recent allegations Samsung has promised a new audit of HEG, sending a team of its own South Korean employees over by the end of the week to inspect the plant.  Samsung writes:

Samsung Electronics has conducted two separate on-site inspections on HEG's working conditions this year but found no irregularities on those occasions.

A team of inspectors consisting of Samsung personnel from Korea headquarters will be dispatched to Huizhou, China on August 9, and it will immediately launch an investigation and take appropriate measures to correct any problems that may surface.

Samsung Electronics is a company held to the highest standards of working conditions and we try to maintain that at our facilities and the facilities of partner companies around the world. 

Galaxy S worker
Samsung is accused of using contractors who use child labor to manufacture
its smartphones and tablets. [Image Source: BGR]

While not exactly a surprise visit, this could force HEG to at least avoid the most flagrant of labor abuses (or as Antoine Dodson would say, time to "hide your kids").

In a way Samsung has benefited from secrecy.  The company does not publish the results of its internal labor audits, while Apple does.  Thus much of the criticism leveled at Apple has been due to that company's willingness to share just how sordid the dark side of Chinese manufacturers are.

In most cases these violations boil down to manufacturers cutting corners, looking to pad their profits by pushing employees to work conditions considered "inhumane" by American and European standards.  

Those issues aside, it cannot be discounted that the electronics manufacturing industry has been a boon to the Chinese economy, lifting millions of workers out of the respectively back-breaking work in the fields into easier, better-paying factory jobs.  

This is evidenced by the fact that even amid outrage from American advocacies regarding labor conditions, their virtually never a shortage of willing workers in China, given the fact that the alternatives  too the "rough" factory life are, in reality, often far worse.

Sources: China Labor Watch, The Verge

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RE: Samsung
By Solandri on 8/8/2012 7:46:24 PM , Rating: 2
Receiving seemingly good value products from China isn't going to help local income.

Your company needs to buy a managed router. You can buy the $1000 USA made one. Or you can buy the cheap $500 China made one, and have $500 left to spend on something else.

That's how it helps your local income. The trade deficit with China amounted to only $300 billion dollars in 2011 ($400b imports, $100b exports). Total trade deficit was about $700 billion ($2.2t / $1.5t). The U.S. GDP is a bit over $14 trillion.

So for every net $1 sent to China, we're spending $47 domestically. If eliminating that $1 sent to China results in domestic spending dropping to $45 due to decreased productivity, then it's a net negative effect on the economy. You'd be cutting off your nose to spite your face.

RE: Samsung
By someguy123 on 8/8/2012 10:16:18 PM , Rating: 2
That's assuming that China will never compete outside of random goods. We've already outsource practically all customer service to India, as well as bringing in Indian/Chinese workers overseas, causing the whole visa problem, and gradually China is increasing living conditions and schooling for its general population. Sooner or later they will be producing those goods and people who will be willing to work at similar competency while demanding lower pay. Where exactly do you go from there?

Working under the assumption that Asia is nothing more than cheap labor is what eventually allowed guys like Samsung to take over the market, and the reason why China's economy is skyrocketing.

RE: Samsung
By Reclaimer77 on 8/9/12, Rating: 0
RE: Samsung
By someguy123 on 8/9/2012 1:53:52 AM , Rating: 2
Enlighten me. I see the eurozone crumbling and trying to keep Greece from breaking out, the US economy the same as ever, while China's economy continues to grow. What exactly do you guys expect? For these people to just give us back our money for nothing?

RE: Samsung
By Gondor on 8/9/2012 10:35:10 AM , Rating: 2
Actually Greece should have never been allowed to join in the first place and should have gotten thrown out long time ago. Fiscal rules were set and they are not adhering to them ... the longer everyone else caters to those lazy Greek bums, the worse.

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