Working at Foxconn 

This is part II of a post on the manufacture of Apple products.

http://open.salon.com/blog/toritto/2012/02/12/as_american_as_apple_1

Who makes your iphone? Apple?

No.

Who actually makes your iphone - puts it together, packs it in a box and ships it off to Apple Stores?

It is actually manufactured by Hon Hai Precision Industry Company, Ltd.

Commonly known as Foxconn.

Who the hell is Foxconn you ask?

Foxconn is the world’s largest manufacturer of consumer electronics. It’s clients include Acer, Cisco, Dell, HP, Intel, IBM, Microsoft, Nintendo, Nokia, Panasonic, Sony, Toshiba and Vizeo.

But Foxcomm’s largest customer is Apple. It is Foxcomm which manufacturers the tens of millions of iphones and ipads at "Foxconn City" in Shenzhen, China. It is the largest employer in China even though it is headquartered in Taiwan. Money makes strange bedfellows.

You will find Foxconn anywhere you can find cheap labor. It has operations in Mexico, Brazil and India but China contains its largest factories by far.

Foxconn City, also known as ipod City is a walled complex of 1.2 square miles where hundreds of thousands of semi-skilled workers labor six days a week in 12 hour shifts. Foxconn City includes 15 factories, dormitories, a swimming pool, its own radio and TV station, its own fire brigade, grocery store, bank restaurants and a hospital.

Nothing like Foxconn exists in the United States.

To Apple executives, Foxconn City was further evidence that China could deliver workers — and diligence — that outpaced their American counterparts.

Tens of thousands of workers earn less than $17 a day for 12 hours. When one Apple executive arrived during a shift change, his car was stuck in a river of employees streaming past. "The scale is unimaginable," he said.

Foxconn employs nearly 300 guards to direct foot traffic so workers are not crushed in doorway bottlenecks. The facility’s central kitchen cooks an average of three tons of pork and 13 tons of rice a day. While factories are spotless, the air inside nearby teahouses is hazy with the smoke and stench of cigarettes.

When CNN reporter Stan Grant met with an 18-year-old factory worker referred to as "Miss Chen," he introduced her to the product that she's spent long hours assembling for the first time. The young woman was astonished by the Apple iPad and exclaims, "Wow, I want it." Chen's job is to install iPad screens, but she's never seen the finished product. Neither could she afford the product.

A recent report of factory conditions reiterates a recent New York Times expose that delved into the dark side of manufacturing Apple products.

"They use women as men, and they use men as machines. There's another way of saying it," Chen said. "They use women as men and they use men as animals."

The company has been scrutinized for a spike in suicides in 2010, factory explosions detailed in the Times article and covering up poor working conditions during audits.

Recent allegations lift the blame from the factories and point it at Apple. Geoffrey Crothall of the non-governmental agency China Labor Bulletin blames the disparity between Apple's profits and Foxconn's compensation.

"These companies are making huge profits but workers feel that they are not getting a fair share," Crothall told CNN. "But just because Apple is making a profit doesn't mean they are passing that onto Foxconn; the margins are slim."

In its defense, Apple's labor standards are higher than the industry standard and have increased the number of audits they performed last year. It's worth noting that Apple isn't the only company benefitting from the cheap labor overseas. However, the counter argument is that Apple is a leader in the industry and must set the bar even higher for itself.

Foxcomm made that iphone you are holding. It has a well deserved reputation for unsafe labor conditions, underage employees, inhumanely long hours and a spate of worker suicides.

Chief executive Terry Gou hasn’t helped his company’s image with comments like one recent public statement that compared the company’s one million employees to animals in a zoo.   "Hon Hai has a workforce of over one million worldwide and as human beings are also animals, to manage one million animals gives me a headache," Gou said at the event.  according to WantChina Times, which translated Gou's remarks.  Gau is one of the world's richest men according to Forbes.

Last fiscal year (ending September 2011) Apple reported sales of $108 billion and net profits before taxes $34.2 billion. For the last 14 weeks of 2011, Apple smashed its own record with sales of $46.3 billion and net profit of $13 billion.

That cheap labor sure pays off - especially when you can shrug your shoulders - "Hey, they don’t work for us!".

Enjoy your phone.

Now let me ask the question again.

How "American" is Apple and companies like it?   Seems to me not very "American" at all.   The jobs are overseas where tens of thousands of Chinese workers live in dorms and earn $17 for a 12 hour day..  The profits are stashed overseas.  Apple contributes massively to our balance of payments deficit with China.  Apple holds the patents overseas and remits "payment" to a foreign subsidiary as a tax deductible "expense". 

Yet Apple enjoys the benefits of our property law.  The benefits of U.S. military protection.  The ability to spend unlimited amounts to influence elections.  The hoards of Congress protecting its interests.  The clout of our media and open access to our market.  Yet Apple feels no social obligation.  It's only obligation is to make more.  The only thing not in China are the Apple executives.

Besides the phone you continually play with, like crack, what have they done for us lately?

Where is the big loss if they left?