Leadership

Suicides at iPhone manufacturing plants cause corporate change

Foxconn's founder takes positive steps to alleviate issues that led to 11 suicides at the factory that makes iPhones.

If any of you get down about your job--maybe your boss is a creep, the hours are too long, the company vending machine doesn't offer a creative variety--think for a moment about Foxconn, and this image:

That's the Foxconn (the industrial complex in Shenzhen that produces Apple's iPhones). Last year, eleven employees of Foxconn committed suicide by jumping to their deaths from factory windows. The image shows the company's initial response to the tragedies--three million square meters of mesh netting wrapped around the building to catch jumpers.

(An interesting side note: A similar means of deterrence was proposed in October of 2008 for the Golden Gate Bridge, which averages one suicide every two weeks.)

When I first saw the story about the nets, I thought that was perhaps the most shocking, reactionary corporate act I'd ever heard of. But, fortunately, that action was accompanied by some long-term changes that the industrial giant's leaders hope will change the lives and well-beings of its employees before they get to the point of suicidal thoughts.

They've set up a 24-hour counseling center staffed by 100 trained workers and they increased wages for factory workers by 50 percent. Finally, Terry Gou, Foxconn's founder, hired Burson-Marstellar to help devise a formal public-relations strategy.

Now, here's where I get cynical. Why was the public relations strategy needed? Because Foxconn's partners--Apple, IBM, Cisco, Microsoft--might try to distance themselves from Foxconn in light of the suicides? And by "distance" I mean take their business elsewhere? Absolutely.

I only hope the initiatives they've implemented for the workers themselves are more meaningful and deeper than a PR strategy. It looks like it's been moving in the right direction, according to this Businessweek article, The man who makes your iPhone.

About

Toni Bowers is Managing Editor of TechRepublic and is the award-winning blogger of the Career Management blog. She has edited newsletters, books, and web sites pertaining to software, IT career, and IT management issues.

18 comments
robo_dev
robo_dev

Here with our shiny iPhones we tsk-tsk about how the companies that make them basically operate sweatshops. Sweatshops where somehow workers, for whatever reason, choose to end their life versus quitting their job. But at the end of the day, are we morally responsible for creating ideal working conditions for workers in other countries? Those factories do what they are allowed to do, by their laws, under the rule of their government. The workers there are not imprisoned, they can get up and leave any time they want to. There are billions of people in millions of factories who work under terrible conditions for little money. There is no evil intent for all this misery, it's the intersection of capitalism with societies which tolerate this sort of condition. As consumers we cannot fix that, and consumers really do not want to fix it, either. For each one person who 'feels bad' about poor working conditions, there are a million who really do not care how the sausage is made, they just want to eat it. By some high-profile press stories, we might embarrass them into making some token changes so that the 60 Minutes news crew can leave, and then go back to business as usual once the camera lights go off. The point to all this is that all this collective hand-wringing of these stories is a waste of time. Consumers want cheap electronics, nations with millions of poor people with lax environmental, labor, and human rights laws can and will give us the cheap electronics we want. There is no economic incentive for any other result, and thus no real change is going to happen. If you think we can 'change China' to make their working conditions good, I say, good luck with that. This sort of thing will continue because companies like Apple are not charitable organizations. Their goal is to make money, period. Could Apple setup a nice air-conditioned factory in rural Iowa to make the iPhone? Yep...but this would put them at a competitive disadvantage with others in the marketplace as the cost of the iPhone would be double or triple what it costs today. Sales would plummet, the Apple board would fire those responsible, and go back to business as usual.

Michael Kassner
Michael Kassner

It will be interesting to see if the Facebook issue comes into play.

Dr_Zinj
Dr_Zinj

Apple, IBM, Cisco, Microsoft Should companies be allowed to mistreat their employees, or by proxy, their contracted employees so badly that they suicide just because they can make their product as cheaply as possible? This is the other, ugly side of off-shoring.

nv1z
nv1z

@robo_dev, that is another part of the problem when something like this happens. People look for someone or something to blame and do not care whether or not it is the correct person or thing. As I said in my post, one needs to correctly diagnose the problem. You get people who blame the sweatshops and ignore the fact these people are not prisoners. Then you get someone who argues that they *are* prisoners because the alternative is starvation. Others want to close down the "sweatshops" on some misguided moral ground, ignoring the fact that *all* the people would then starve. Before criticizing a company and labeling them a "sweatshop" I would like to see a study that compares wages and other conditions to other companies in the area. As you pointed out, no one seems to want to blame the people who took their own life. Heck, that would be insensitive.

dragon_keepers
dragon_keepers

No they would not the price would only go up to what people would pay. If all the stupid people that have to have the latest bit of kit just waited a few weeks the price would come down. As with every thing when first released the price is high but the it drops. there is no need for this, the price should be cost pluse a percent not cost pluse x what we think the idiots will pay

bill.andersen
bill.andersen

Myopia Of course we are all morally responsible for working conditions at plants/factories where our products are made. Globalisation and off-shoring shouldn't stop at profiteering, it has to encompass health and safety too just like workers in the West would expect, and companies who take their manufacturing businesses to these countries should ensure beforehand that the workers are being treated fairly. BUt of course, they don't! It is more and more sickening with each and every exposure of these types of scenarios where the poorest of people are exploited by huge corporations, whether directly or indirectly. If you business is involved it is responsible, and should be made responsible for the welfare of the employees. If you think there is no evil intent in all this misery and using the excuse that its the intersection od capitalism which "societies tolerate" is wrong too because for the most part societies are kept in the dark for fear of the possibility of lost profits or failed products if this sort of information were to get out. You further state that there is no economic incentive for further change in these practices, well that is the problem in a nutshell, there has to be less profit for companies, and better quality for consumers, better conditions and wages for employees, and fair play for all. If Apple's iPhone were to be priced realistically, against what it actually costs to make it, for example, instead of the gross profiteering that is happening and which is the root cause of all the problems in this world at present. The answer is for all of us here in the West to be more responsible, we don't need half of what we buy, we always want the latest greatest gadget or phone, and its time we all took a step back and asked ourselves, "Do I really need this item?" We, the consumers, must slow this runaway juggernaut down, and stop making excuses and bleating like this Robo_Dev person, that there is no other way.....there is always another way, and usually a better way too!

martin.smith
martin.smith

Robo_dev makes some valid points, but doesn't address the fact that China is a developing nation. Factory conditions like this existed in the west in the 18th and 19th century, but reforms, economic progress and technology have addressed this. We should expect China to develop this way, I think they would want this for their people, I imagine Apple could do without the publicity too. Change can happen, and we should all insist on it. Fair Trade organizations are a perfect example of how this can happen: here in the UK a lot of cocoa, sugar, tea and bannanas are now Fair-Trade marked and it's become a "brand" in itself. I don't see why this can't happen with technology. I'd also note that the company managed to find enough to give the workers a 50% rise. Perhaps share-holders (including pension fund holders etc) should accept some of the blame as much as consumers . . .

AnsuGisalas
AnsuGisalas

You seem to say that production cost is close to 100% of an iPhone, after all, if the Iowa plant has triple the costs, then you predict the finished product to be also three times as expensive. But you only pay for the intellectual properties once, so I don't think that holds up entirely. It doesn't undermine your point significantly, though.

delta47
delta47

see the movie.. they might want to add it to the play :P

delta47
delta47

yup.. good side is we (the people they had off shored it too ) get the money. hehehe

Bishop234
Bishop234

Wow...and I thought I was the only person who remembered that...

HICKERSONZ
HICKERSONZ

I don't believe the average consumer will ever have enough information to make the "right" decision based on the reported working conditions in a factory around the world from us in a culture that we know little or nothing about. If you have brand X, Y and Z and brand Z has a factory where there are reports of lots of suicides who is to say that X and Y are not just as bad or worse. Maybe X and Y are just bribing the right people so that their attrocities don't get reported. I think it's simple minded to think that because you read a news report, feel bad and buy a different product that it's going to change what is basically a problem in a foreign society. If you think you know exactly where the lines should be drawn then go for it, but I believe it's a nieve attitude. I think it's the responsibility of the company ownership and management to treat their employees "decently"; and pay a wage that is acceptable within their society. If a business does not live up to the requirements or norms of the society where they practice then #1 they may go out of business becaues they're employees are unhappy, not productive and leave and #2 it's the responsibility of the society to demand change in the case of extreme abuse... the way that US citizens demanded change when the stories of child labor and sweatshops became known to this society. I don't think that's making "excuses". I think it's acknowledging realities in the world we live in. I also hope that the world will change for the better, as it has in the US and other "developed" nations, but even in these "developed" nations there are working conditions that many would still consider barbaric and de-humanizing. I spent two years in a US based tech support call center that was very high pressure. I didn't like the working conditions and eventually quit when I found a better job, but the call center work gave me valuable experience and training that helped me get a better job and it fed my family until I could move up. Some people might consider some call centers "sweat shops".

Bishop234
Bishop234

Those sweatshops keep the prices low. Perhaps these(much needed in respect to human rights and the human condition) reforms are needed, but then you have to factor in the mechanics of such reform - unions - and all the +/- that unions bring with them. There are other ways to reform, but going with a "whole ball of wax" mentality, your union setup will will be chock-full lawyers, arbitrators, negotiators and all sorts of other legalese daring-do. Product quality will rise for a time, then it will plummet as workers will not have to apply any sort of work ethic to the task, as the worker is protected from fallout by the union. Oh, and the higher wages and bennies for the workers will equate to higher prices. You can bet that the hikes will NOT come out of the executive salaries... THEN the reform for the union itself will come into play, and all that... Ultimately ending up with some high ranking state official declaring that all unions are bad for business...

Zorched
Zorched

Don't forget the country this happened in is the same country responsible for Tienanmen Square. This is what really gets me. It's a communist country so they can perform any atrocity they want and the only recourse the rest of the world has is to move production elsewhere, and the corporations are far too greedy for that. Those ultimately to blame are the overpaid execs of the corporations deciding to do this manufacturing there. They want to keep their over bloated paychecks coming and will do so at any cost. If they could get away with treating Americans this way, they would in an instant. China just happens to be a perfect location for their brand of greed because they can pay people 57 cents an hour (average as of 2009) and work them till they drop and the government doesn't care as long as they get their cut. Remember, as an employee there, if you leave that company there's thousands willing to take your place, so if you want dinner on the table you do what they tell you. With the recession, Americans are starting to understand this feeling.

StormForge
StormForge

Sweatshops CAN change. Occasionally, they are still found in the US. Organized labor changed the poor labor conditions in this country and helped probably 1/2 the population rise into the middle class. Did this cost something? Of course it did, and it also provided many many more consumers that fueled the growth of the economy. There is an old mill in West Warwick, RI, that was still there, abandoned, still unmarked the last time I was there. It was probably built in the 18th century but appears to have operated into the late 19th. The floors of the building, the ceiling height, is between 4 and 5' high, maybe even less. Why were the ceilings so low? They used a cheap, compliant, ignorant labor force. The used children. Given the conditions that existed for adults, they probably worked 80-120 hours per week, perhaps more, in very hazardous conditions. The businesses operating the sweat shops would not have changed without the actions of organized labor and the changes in federal law.

sinnistar
sinnistar

No claim was made that the Iowa plant would have triple costs. The costs could be 5 or 10 times as much as a plant in China for all you know. All that was said was that the end product would cost more. It's such a minute point anyway so I'm not really sure why you had to pick at it but since you did I thought it necessary to point out how you failed miserably.

spin498
spin498

You are absolutely right, no claim was made. I guess you missed the 'if' in AnsuGisalas' comment. But that's just a minute point isn't it? Oh wait it changed the whole context of the comment and makes your post snarky, sorry I felt it necessary to point that out.

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