High stress, high security: the price of an iPhone made in China

Sat, Sep 29, 2012, 01:00

Foxconn is famous for two things: making Apple products and having unhappy staff. A riot at one of its Chinese factories this week was the latest evidence of worker discontent. What goes on behind the doors?

XIAO MA, A 21-year-old from Shanxi working the night shift at Foxconn in Taiyuan, watched last weekend as a row between a young woman working at the factory and a security guard escalated into a full-scale riot.

Dormitory windows were smashed, vehicles burned and thousands of armed police called in as still more people came to join the melee. Dozens were taken to hospital for treatment.

“It was massive. The anger is accumulating here. It’s getting worse,” says Ma. He is hunkered down near a police box across the road from one of the southern gates of the vast facility, which employs 79,000 people. Nearly a million people work for Foxconn in China.

“We are constantly insulted by the leaders of our work units, and we are always being shouted at. The security guards are constantly abusing us,” says Ma, smoking quickly as we speak.

His friend, who gives his surname as Li and is also 21, says what struck him about the riot was the way things escalated so quickly. “Her workmates stepped in to protect her, then more and more came in to help, and it all got very crazy,” he says.

The riot was a big setback for Foxconn, the flagship unit of the Hon Hai group, owned by the Taiwanese tycoon Terry Gou, which has been working flat out to meet increased orders for the iPhone 5.

Two years ago, Foxconn, the world’s largest maker of computer components, was roundly criticised about working conditions after a string of 13 suicides by employees at the company’s plants in southern China.

Foxconn’s close links with Apple, probably the highest-profile company in the world, has been a headache for the company, which is based in California. The chief executive, Tim Cook, visited an iPhone factory in Zhengzhou, in Henan province, last March to shore up the PR fallout.

The suicides in 2010 were blamed on tough working conditions, prompting calls for better treatment of staff. Foxconn was forced to increase wages and to construct safety nets on the roofs of the factory buildings to stop people jumping off.

Since then there has been a succession of incidents: poor performances in labour audits and regular accusations that Apple’s vast profits are being made at the expense of young Chinese workers.

Foxconn employs more than 1.2 million workers in 18 countries, including Brazil, Taiwan, Vietnam and Mexico, although most work in China: in the southern city of Shenzhen, in Chengdu in the west and in Zhengzhou in central China.

It’s hard to overstate how big Foxconn is. There is a very good chance that you have used something with a Foxconn component in it at some point today. As well as making iPads and iPhones, it makes PlayStations for Sony, the Nintendo Wii, PCs for HP and Dell, and equipment for Microsoft and Cisco Systems.

The sign outside the main entrance to the Foxconn plant says: “We are hiring security guards.” That’s hardly surprising, as many of the plant’s security staff were fired after last weekend’s riots. “The security guards are a menace. People don’t want to work for Foxconn because the wages are not so good and the guards are very bad,” says one young woman who is wearing a Foxconn polo shirt and eating noodles.

There are very few middle-aged or older people around the plant. Everyone is young and here to make money quickly. It feels more like a high school or a university cafeteria, as groups of young men and women eat at long tables in a courtyard shopping mall, surrounded by fashion shops and hairdressing salons.

Eating a bowl of the local speciality, cat’s ear noodles, so called because they are shaped like cat’s ears, Xiao Peng – “Xiao” means “Little” and is a common nickname – who is from Shanxi province, says he is working on components for the iPhone 5, and that it has been very busy lately, trying to meet orders. “Salaries are not rising fast. My basic wage is 2,100 yuan [€258]. But I’ve been here for more than two years. It’s difficult to get workers, so the management pays more,” says Peng.

Workers who were brought here from Foxconn in Shandong were promised 1,000 yuan (€123) each as a subsidy, which they had not yet received, and that also led to resentment.

Like most people we speak to, Peng is satisfied with the working conditions, except for the militaristic approach to discipline and the overzealous security guards. His monthly wage, once he does a couple of hours of overtime a day, is 3,000 yuan (€368), which is respectable enough.

His colleague says the new workers are starting on a basic wage of 1,800 yuan (€221), and that angers people who have been here longer. “I’m satisfied with the work, but that kind of thing is unfair,” he says.

They say there are serious tensions within the factory between local employees from Shanxi province and those from other provinces, chiefly Shandong.

Fewer coal trucks are on the roads around Taiyuan, a sure sign that the economy is cooling. But labour is still short, as evidenced by the rows of young men sitting at desks on the street, shouting out at passing jobseekers, trying to lure workers.

One sign says: “Even if you have tattoos and scars, we will find you a job”, and the recruiters offer 400 yuan (€49) for every person you find to work.

In 2008, China enacted a law that means every worker is entitled to an employment contract. However, millions of workers sign up with employment agencies, which are mostly recruiters such as the young men sitting at their desks outside Foxconn. Anyone who signs up with an agency or a recruiter does not get the same pay and benefits as regular workers. The government has said it will try to stop their activities, but they are still operating in plain sight.

One young woman is looking for work for herself and her four friends, and the recruiter tries to convince her to sign with him.

“We want to work in the same workshop together,” she insists. “You can do that, but I can’t guarantee you a dorm together,” he says. “It’s okay, we’ll be getting our own place,” she said.

One man who has just signed up is Lin Fang, a 20-year-old farmer from Shanxi. “I was earning 2,000 yuan [€245] as a farmer, but I can earn more here, once you factor in some overtime,” he says.

There have been online calls for trade unions to be set up to protect workers’ rights, but these are unlikely to bear fruit. Foxconn has factories all over, and local governments are not gong to risk antagonising the company, which seems able to transfer manufacturing capabilities around China, and the world, very quickly.

As well as cheap labour, Foxconn is manufacturing in China because it wants to escape meddlesome labour unions in Taiwan.

The China Labour Watch group in New York, which examines labour practices in factories around China, says the root causes of the riot need to be examined more closely.

According to the researcher Li Qiang, “Foxconn factories, which produce many of Apple’s products, have a history of maintaining militaristic management practices as well as putting an inordinate amount of stress on workers.”

The problem, Li believes, is that the workers are coming from all over China, are required to work 10-hour day and night shifts with little rest, low wages, very strict factory rules on behaviour and verbal and physical abuse by guards.

“These workers must be treated with respect. And both Apple and Foxconn, with billions of dollars in profits every year, have both a legal and ethical obligation to uphold the rights of these workers,” says Li.

Opinion: My Apple, my ethics

At the launch of the iPhone 5, a few weeks ago, Apple’s head, Tim Cook, introduced the customary product video, part of a ritual in which executives sit against a white background and talk about the latest product in awestruck tones. As Apple’s design guru, Jony Ive, discussed the precision required to manufacture them, we saw clips of the production line, with cases being polished and lenses being pieced together. But, tellingly, the arms positioning the components belonged to robots, not to Chinese workers. It was an elegant elision, giving the impression that these pocket-sized computers are made in futuristic laboratories.

In reality, they are effectively hand-made, albeit by hands working on a vast production line. And it’s a production line unlike anything acceptable in the West; stories of mass suicides, gruelling hours and, this week, riots are unimaginable in a world of workers’ rights.

It’s a reality that should discomfort, at the very least, all who use these devices. I got my first Apple laptop, a graphite-and-white clamshell design classic, more than a decade ago. I never had to think about where it was made, never had to worry about the conditions at the factory where it was assembled, never had to feel guilty about exploiting the workers who put it together.

At the turn of the millennium, Apple made its products in Cork and California, where we could be pretty sure staff were getting an honest wage for working in reasonable conditions. The transformation of Apple’s fortunes since then has coincided with a transformation of the electronics industry’s supply chain to a mostly Asian-based manufacturing process. This outsourcing to developing countries and its attendant decline in workers’ rights illustrate a far more worrying truth about the increasingly globalised economy.

The scrutiny that comes with being the world’s most valuable company means Apple is now seen as emblematic of the problems inherent in a globalised supply chain. But I’m worried that the attention on Foxconn and Apple is more convenient scapegoating than honest reckoning about our complicity in exploitation. You can’t be indignant with Apple for profiting from cheap labour without being indignant about China’s rapid economic growth and, worse, the widespread respect for it.

Ultimately, this reflects a world where most western consumers live in wilful ignorance, never allowing themselves to be concerned whether their coffee comes from fairly treated farmers or their chocolate comes from ethically sourced cocoa, never mind the conditions of the workers assembling their trainers or gadgets on the other side of the world.

Developing countries can benefit from the outsourcing of manufacturing. But if we care about Chinese workers, rather than merely about our sense of guilt at enjoying the fruits of their labours, we must export not only our production needs but also the employment standards and workers’ rights that activists spent so long striving for here in the West.

Pressuring Apple to ensure the highest standards in its supply chain is an important step. But we must not think it’s any more than a first step.

Davin O’Dwyer

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