Riots, suicides and more in Foxconn factories
(CNET) ZHENGZHOU, China - If you want to understand why iPhones are made in this corner of the world, look no further than Li Yue.
When I met the effervescent 21-year-old, she was lined up at a kiosk outside the gates of the massive assembly plant owned by Foxconn. Li, wearing a white T-shirt and blue jean shorts and carrying a pink parasol to beat the heat on a scorcher of a June day, was among a group of a dozen or so candidates applying for a job with the Taiwanese firm. Not a specific job, mind you. Any job.
It's not as if Li, who just finished her first year as a student at Henan Police College, didn't have much going for her. She was bright and engaging. She spoke more than passing English. And she conveyed an eagerness to get started.
Foxconn granted her wish. But instead of landing a job at the plant here, which employs more than 190,000 workers, Li boarded a bus that afternoon for Taiyuan, in the Shanxi Province, a 10-hour ride away. It may have been more than she bargained for.
Late Sunday night, the Taiyuan factory, with more than 79,000 workers, was roiled by violence. Foxconn said "a personal dispute between several employees escalated into an incident involving some 2,000 workers," leading Foxconn to suspend operations at the plant for a day. While Chinese authorities are investigating the cause of the riot, Foxconn said that it "appears not to have been work-related." Apple (AAPL) declined to comment on the riot.
The weekend violence is the latest in a growing list of incidents that have heightened concerns over conditions in factories that make iPhones and other high-volume tech products. There have been employee suicides, explosions at two plants that make Apple gadgets, and reports of harsh working conditions. A New York Times investigation of the manufacturing of Apple products in China in January painted a picture of a company that wants to improve the workplace at its partners such as Foxconn but "falters when it conflicts with crucial supplier relationships or the fast delivery of new products."
There are other, less obvious issues adding to tensions in these teeming facilities. Wages may be high compared with other jobs in China, but they are sometimes barely enough to cover rent in the huge dormitories in which employees typically live, and still leave workers with money to send to family members in villages who live on even less. Managers can subject employees to harsh public ridicule that would be unthinkable in Western workplaces. And employees are often reluctant to make waves simply because there are so many other people who would happily trade places with them.
"The employees always say the people outside want a job," one employee told me in an interview, "and the people inside want to quit."
When a major new product such as the iPhone 5 is heading to stores, even more stress is put on that fast-growing manufacturing chain. Apple sold 5 million iPhones over the weekend (up from 4 million for the first weekend of sales for the iPhone 4S), and could sell 10 times that amount by the end of the quarter that closes December 31. Meeting that demand has required an epic buildup of materials, infrastructure, and labor, all while satisfying Wall Street's need for bigger, more historic profits.
Li, who is from Huaiyang, about 120 miles southeast of Zhengzhou, knew all about the suicides at Foxconn. And she had read articles online about the working conditions at the company's plants. But she still lined up for the interview, during which recruiters asked the most basic questions and look for scars and tattoos, according to Li. And she had no qualms about paying the 150 renmimbi, or $24, for a bus ticket to Taiyuan, even for a job that pays 1,550 renminbi a month, about $244. (Foxconn raised wages in Zhengzhou on August 1 to 1,800 renminbi, about $283.)
"It's very hard to get a job at Foxconn," Li said, with her pink purse and a grocery bag full of food in her hand. "They pay more than other companies."
Workers like Li are in such abundance that they've become a resource in much the same manner as aluminum or plastic. They move among cities such as Taiyuan, Zhengzhou, Shenzhen, and others where iPhones are made as needs arise. And as soon as they leave their jobs, they're replaced by other workers, just as eager as Li to get started. That's particularly true as Foxconn opens new factories in inland cities, where opportunities are scarce.
Putting size in perspective
Scale matters when you're trying to satisfy global consumer demand. Foxconn, which makes products for Apple and plenty of other tech giants, including Dell and Hewlett-Packard, is huge, employing 1.1 million people in China. But then, China is massive, with more than 1.3 billion residents.
Consider Zhengzhou. Everywhere you look in the part of the city where Foxconn has set up shop, construction cranes loom. Excavators move dusty, dry earth, while skeletons of long factory buildings and 12-story dormitories form a changing skyline. Chinese media report Foxconn plans to employ 300,000 workers here within a few years, but it's still all Foxconn and Apple can do to keep up with demand.
As absolutely gargantuan as Foxconn's facility is here, Zhengzhou can handle it. The city has 8.6 million residents. Henan province, of which Zhengzhou is the capital, has a population of 94 million. That's the same number of residents as California. And Texas. And New York. And Pennsylvania. Combined. If it were a country, Henan would have the 12th largest population in the world, in an area roughly the size of Wisconsin.
I came to this city because I wanted to explain how an iPhone comes to life and the consequences of meeting prodigious global demand. Beyond the exposes about conditions in the factories that make iPhones, we've also seen troubling reports of pollution caused by the mining for its raw materials and its ultimate disposal.
I contacted Apple during my reporting for this project. The company provided a statement last night.
"Apple is committed to the highest standards of social responsibility across our worldwide supply chain," the company said. "We insist that all of our suppliers provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes wherever our products are made."
True, virtually any major consumer electronics product carries similar labor and environmental issues. The life cycle of an iPhone isn't all that different than that of a Samsung or an HTC phone, and nearly every modern mobile phone is made by Asian contract firms, where worker rights aren't protected by federal and state laws as they are in the United States. Still, the iPhone is iconic. Its introduction in 2007 upended an entire industry and led the shift from desktop to mobile computing. But there's a downside, as the riot in Taiyuan reminds us.
Apple is not ignoring the issue. The company has hired a group to audit workplace conditions, the Fair Labor Association or FLA, as a result of the issues raised in recent months. Last month, the group reported that Foxconn addressed several workplace concerns, such as enforcing ergonomic breaks, changing the design of workers' equipment to guard against repetitive stress injuries, and updating maintenance policies to ensure equipment is working properly.
"In addition to this ambitious project with the FLA, we've been making steady progress in reducing excessive work hours throughout our supply chain," the company said in its statement. "We track working hours weekly for over 700,000 workers and currently have 97 percent compliance with the 60-hour maximum workweek specified in our code of conduct."
And in response to the wave of press coverage about and activist condemnation of the conditions at those plants, Apple Chief Executive Tim Cook took offense at any suggestion that the company is indifferent to the workers in its supply chain.
"Any accident is deeply troubling, and any issue with working conditions is cause for concern," Cook wrote to employees in January, according to an internal e-mail obtained by 9to5mac. "Any suggestion that we don't care is patently false and offensive to us."
Both Foxconn and Pegatron, another contract manufacturer that assembles iPhones in China, declined my request to visit their facilities. But Foxconn, in a statement to CNET made prior to the riot that occurred over the weekend, acknowledged problems and said it is working to improve conditions.
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