Foxconn makes no profits on iPhones: activists

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.