Foxconn makes no profits on iPhones: activists

Foxconn makes no profits on iPhones: activists

Summary: Apple secured a "zero profit" deal to receive iPhones from Chinese technology manufacturer Foxconn, according to a worker rights activist group, which has linked the factory's poor wages and working conditions with a number of young worker suicides.

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TOPICS: Apple, iPhone
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Apple secured a "zero profit" deal to receive iPhones from Chinese technology manufacturer Foxconn, according to a worker rights activist group, which has linked the factory's poor wages and working conditions with a number of young worker suicides.

In an open letter to Apple CEO Steve Jobs, Hong Kong-based Students and Scholars Against Corporate Misbehavior (SACOM) said he should personally intervene to improve wages and worker rights at Foxconn.

Apple, the world's biggest technology company by market capitalisation, and Foxconn made headlines after a number of young workers committed suicide, which labour groups and unions have attributed to the long hours of repetitive work for very low income.

On Tuesday 8 June, SACOM organised protests outside Apple stores and the shareholder meeting of Foxconn's parent company Hon Hai Precision Industry Co. The same day Apple announced a new model iPhone, SACOM penned an open letter to Jobs and declared an international day of remembrance for the workers who have died at the Foxconn factory.

The letter claimed that pricing agreements secured by Apple and other vendors have contributed to the poor conditions in Foxconn factories, where workers have committed suicide.

"Industry sources suggest that Apple awarded 2009 iPhone orders to Foxconn when Foxconn agreed to sell parts at 'zero profit'," SACOM wrote. "Under the direct pressure of Apple and other buyers, Foxconn pays production line workers at its Shenzhen plant only 900 yuan (AU$159) a month for a 40-hour week.

"This subsistence level wage is not enough to meet workers' needs and compels workers to work up to 100 hours of overtime a month."

"They submit themselves to management scrutiny on the job, and their low income and limited free time restricts their options outside of work. The result is a community of people under intense stress with few resources where it is much more likely for people to succumb to feelings of powerlessness and depression.

"This is, we believe, the source of pressure behind the recent suicides."

ZDNet Australia has contacted Apple for comment, but had not received a response at the time of writing.

To improve the enforcement of workers' rights, SACOM has called on Apple to raise unit prices of orders and revise purchasing practices, including its supplier code of conduct.

"The iPhone, iPad and other Apple gadgets sell for hundreds of US dollars. Does Apple believe consumers prefer an 'acceptable' level of suicide over spending a little more to give workers a life they find worth living?

"We propose that this reform should rest on the building block of workers' involvement in decisions that concern them."

SACOM also took aim at Foxconn and called for an independent review of its management systems and overtime agreements.

"No where does Chinese law give Foxconn, its employees or Apple the right to 'agree' to ignore elements of the law they do not like.

"Foxconn employs 420,000 people only in Shenzhen; 800,000 in China. If Foxconn's 420,000 Shenzhen employees reduce hours from only a 60-hour work week to fully comply with Chinese law, Foxconn would need to hire close to 100,000 more people!"

However, Foxconn chairman Terry Gou told attendees at the company's shareholder meeting that no laws had been broken.

Gou cited data from the Taiwan Suicide Prevention Center that said most of the workers who committed or attempted suicide had romantic or family relationships, while three had psychological problems, Bloomberg reported.

Topics: Apple, iPhone

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9 comments
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  • With 800,000 employees in China, World Health Organisation's suicide rates (http://www.who.int/mental_health/prevention/suicide/suiciderates/en/) would suggest Foxconn is actually well below the China average, no? One suicide is a tragedy, but is there really a story here?
    malcolmgroves
  • If you don't mind using data from 11 years ago, and then take into account the extremely generalised nature of this data (13 suicides per 100,000 people, that are reported, no demographic information), then you can probably say that the suicides are rather a non-story (I wouldn't though).

    But the real story here is how western companies are paying Chinese workers next to nothing to assemble their high-tech goods. Clearly these companies need to look at treating their workers (even workers that are outsourced) correctly. With the profits these guys make each year surely they can afford to drop their margin on the latest yuppie device a little?
    m00nh34d
  • A US$20 increase in the price of an iPhone would go unnoticed to the average consumer, yet (if every cent of that $20 went directly to the workers) their wages would DRAMATICALLY increase.

    Lets assume that an average worker assembles only one iPhone per day (obviously it's more complicated than that because each worker typically only assembles one small piece of the phone, not the whole thing, but anyway...) then that would equate to an extra $400 a month - a 250% increase!
    Dean Harding
  • It's certainly far less efficient at population control than the one child per family rule, but perhaps we should just bring Apple production back home to the US and buy alot more robots.
    ShockMe
  • How about all the other company's that have goods manufactured by Foxcon? Dell and Hewlett-Packard; the PlayStation 2 and PlayStation 3 for Sony; the Wii for Nintendo; the Xbox 360 for Microsoft, cell phones for Motorola, the Amazon Kindle, and Cisco equipment. [http://en.wikipedia.org/wiki/Foxconn]

    I know why..... It's fun to hate Apple! Yay, lets pick on Apple because they are egotistical and just mean and snobby and stuff...

    Don't get me wrong I believe that we are in the midst of the greatest transfer of wealth in human history. I can only hope that my fellow brothers and sisters in places that are considered 3rd world get equal wages, treatment, technology, healthcare, education, and general well being as I have been lucky to enjoy all of my life. One day I believe that as a human species we will achieve this. I have hope in human beings because even though we have seen unimaginable atrocitys, we have also made exceptional progress torwards a future where every man woman and child on earth share an acceptable quality of life and ability to follow their dreams whatever they may be. (end tangent)
    rustyshakleford
  • Moonhead, if you have better, more recent data than this (as of May 2003) then happy to see a link to it, but otherwise this is the best we have to go on.

    As to your other comments, you might be right, but then that is a much broader story about outsourcing and MNC's activities in lower-cost markets. Suicides at one manufacturer that appear to be below the national average are hardly relevant, beyond making a great headline.
    malcolmgroves
  • Greedy US company executives exploit Chinese workers so that they can pay themselves obscenely fat bonuses.
    Yoda7
  • On the comment re. # of suicides per 100,000: what time frame was that? Per year, per month, per week, per decade...?
    plk2
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