Showing posts with label Foxconn. Show all posts
Showing posts with label Foxconn. Show all posts

Friday, July 31, 2020

Voice From The Back: “Modern” Britain (2010)

The Voice From The Back column from the July 2010 issue of the Socialist Standard

“Modern” Britain

There is a notion about that because in Britain we have a new political situation of parliamentary sharing that something has changed about the class division of society. It is just not true. “At St. James’s club in London, a new toast is overheard: ‘To the Nineteen.’ This refers, as you no doubt spotted at once, to the 19 Old Etonians who have become prime ministers. Jolly good.” (Sunday Times, 16 May) “Almost four-fifths of the new cabinet are millionaires, according to an analysis by The Sunday Times. As the government prepares to wield the axe on public spending, research reveals that 18 of the 23 full-time cabinet members have seven-figure fortunes, collectively worth about £50 million.” (Sunday Times, 23 May) So modern Britain looks a lot like old Britain. The people who produce wealth – the working class are exploited by the owning class. Wake up fellow workers we need a new society.


The Chasm Of Class

At a time in the USA when many members of the working class find themselves unemployed and their homes re-possessed it is worthwhile looking at how the American capitalist class are dealing with the economic downturn. Time-share mogul David Siegel and his former beauty queen wife Jacqueline have had to sell their Florida mansion for a mere $50 million. The 30 bedroom house and estate, named and modelled on the palace of Versailles in France, includes a boat house, a ballroom, an Olympic-size pool, a theatre and a baseball field. “The 23-bathroom house may appeal to a buyer so wealthy they do not even move in, said local estate agent Kelly Price. ‘Versailles will probably be a house that will appeal to the uber-wealthy who don’t even think about the issue of money,’ she added. ‘It might be a second or third home. For all we know, it could be a seventh or eighth home.'” (Metro,27 May) Useful productive members of the working class are homeless while the useless parasite class have multiple mansions – that is capitalism for you.


Nice Suicides

“Steve Jobs has said the Chinese iPhone factory where 10 workers have killed themselves this year is actually ‘pretty nice’. Speaking at the All Things Digital conference in California, the Apple CEO also brushed aside questions about his relationship with Google … Taiwanese electronics manufacturer Foxconn makes Dell, Nokia and Apple products at its factory in Shenzhen, China. As reported by The First Post, the latest suicide came last week, when a 23-year-old worker jumped to his death from a building roof. Jobs denied Foxconn ran a sweatshop and told the conference that Apple was working with the company to get to the bottom of why so many people were killing themselves. ‘You go in this place and it’s a factory but, my gosh, they’ve got restaurants and movie theatres and hospitals and swimming pools. For a factory, it’s pretty nice,’ said Jobs.” (First Post, 2 June) What millionaire Mr Jobs does not mention is that the workforce stand for a 12 hour work day under constant camera surveillance for the princely sum of £90 per month and live in factory-owned dormitories. The factory is considering improving conditions by introducing “soothing” music, dancing instructors and a suicide hotline! The mindless repetitious factory 12 hour slog may seem “pretty nice” to Mr Jobs as he counts the millions of dollars extracted from the exploitation of these Chinese workers, but at least one worker last week decided to end his “pretty nice” servitude.


Class Divide In China

The awful gap between the rich and the poor in modern China was illustrated by two recent news items. A series of industrial disputes leading to strikes has broken out in China. “They began at Honda’s car plant in the south near Hong Kong. Since then, disputes, demonstrations and picketing have broken out at electronic firms, vehicle parts makers and other factories as far away as Shanghai. Even the 8,000 workers who make the balls used in the Fifa world cup in South Africa are reported to have gone on strike after discovering that one football is sold for the equivalent of a fortnight’s salary.” (Sunday Times, 13 June) According to the chief executive of Rolls Royce Motor Cars “China is now our second largest market, with about 20 per cent of sales, and is doing very, very well.” …. “The Phantom model starts at £235,000 and the Ghost, the new baby Rolls launched this year, at £165,000. The Phantom is about presence, about making a statement. That is why it is so popular in China.” (Times, 7 June) This immense conspicuous consumption is only possible out of the sweated labour of the Chinese working class toiling for a fortnight for the pittance of the price of a football.



Wednesday, October 30, 2019

Apple, Foxconn and The iConomy (2012)

From the March 2012 issue of the Socialist Standard

Apple, the creators of the iMac, the iPod, the iPhone and iPad as well as other must-have devices, are now industry leaders in providing personal computing and related technologies. But amongst the latest gadgets and a total income of over $108bn (2011), what of the company’s workers and workforce? How do they fare under the influence of a company with more money than the US Government? (In July 2011 because of the debt-ceiling crises, Apple at one point had bigger cash reserves than the US State). Not so good would be the short answer.

Apple itself employs around 60,000 people worldwide and by some accounts can be a strange place to work. Despite the famous informality of jeans in the office, reports in a recent book (Inside Apple by journalist Adam Lashinsky) claim working for Apple is like being ‘in a cult’. With overbearing management, extreme secrecy and even ‘lock-down rooms’ constructed inside other rooms to prevent information being leaked outside the company, ‘paranoid’ may not be too strong a word. Many employees have been fired for discussing their jobs outside work and it is rumoured that company spies operate in bars and venues used by employees. Lashinsky states: ‘So there’s no confusion, the penalty for revealing Apple secrets, intentionally or unintentionally, is clear: swift termination.’ An ex-Apple employee goes further saying that Steve Jobs (now deceased) would make it clear before any media ‘company broadcast’ about new developments or products, that ‘Anything disclosed from this meeting will result not just in termination but in prosecution to the fullest extent our lawyers can.’

Lashinsky also describes Apple as ‘cultish’, and states that ‘neophytes are entrusted with only so much information’. He goes on: ‘As with any secret society, trustworthiness is not assumed. New additions to a group are kept out of the loop for a period of time, at least until they have earned their manager’s trust.’

A senior Apple engineer said: ‘People are so committed that they go home at night and don’t leave Apple behind them. What they do at Apple is their true religion.’ It is alleged that Apple operates around the concept of disclosure – Jon Rubinstein, a former senior hardware executive at Apple, says, ‘We have cells, like a terrorist organisation. Everything is on a need-to-know basis.’ So much for the ‘be inspired every day’ tag line on Apple’s recruitment page, then.

Outside America and Europe things are worse though. Despite early Apple claims to be ‘made in America’ the company have for years been outsourcing work to China and other far eastern countries. One of the main contractors for Apple abroad is a Taiwanese concern called Foxconn, part of the Hon Hai Precision Industries Company. With factories in China and Taiwan, Foxconn is staggeringly huge and is now estimated to employ well over a million people – 500,000 work at its huge Shenzhen facility in China alone. These mega factories are small cities in themselves with shops, barbers, banks and other facilities within the factory complex. Workers are housed in huge dormitories and never leave the site. Overcrowding is rife.  One online estimate states that it is ‘five times the density of population as Mumbai’. Working hours are long and pay is very low by western standards. In 2011 no fewer than ten workers killed themselves in the Shenzhen plant alone and another three attempted the same act. Many jumped from buildings, including one who had lost a prototype iPhone, prompting a media outcry.

The company responded in typically business-like fashion by introducing a new anti-suicide clause in its workers contracts – apparently those desperate enough to want to take their own lives will think again if it means a breach of contract. They also cynically raised wages twice in one week in 2011 which brought the average basic pay of an employee from 1200 to 2000 yen a month, or roughly from £130 to £200.

Death may not come by one’s own hand here though. In May of 2011, Foxconn again hit the headlines when a massive explosion ripped through the plant where the shiny aluminium backs for Apple’s iPad2 are polished, killing three workers and injuring many more.  From reading online news reports, however, the biggest worry seems not to be about the dead and their families but about whether the gadget-hungry fools in the West would get their iPad2 on time.

Workers in China travel far to get jobs in this plant. An in-depth article in the New York Times (25 January) reported on one such individual. It stated: ‘When Mr. Lai finally landed a job repairing machines at the plant, one of the first things he noticed was the almost blinding lights. Shifts ran 24 hours a day, and the factory was always bright. At any moment, there were thousands of workers standing on assembly lines or sitting in backless chairs, crouching next to large machinery, or jogging between loading bays. Some workers’ legs swelled so much they waddled. ‘It’s hard to stand all day,’ said Zhao Sheng, a plant worker.’

The article goes on to say ‘Banners on the walls warned the 120,000 employees: ‘Work hard on the job today or work hard to find a job tomorrow.’ Apple’s supplier code of conduct dictates that, except in unusual circumstances, employees are not supposed to work more than 60 hours a week. But at Foxconn, some worked more, according to interviews, workers’ pay stubs and surveys by outside groups. Mr. Lai was soon spending 12 hours a day, six days a week inside the factory, according to his paychecks.’

The long hours and low pay are not the only issue. The NYT article notes that: ‘Mr. Lai’s college degree enabled him to earn a salary of around $22 a day, including overtime — more than many others. When his days ended, he would retreat to a small bedroom just big enough for a mattress, wardrobe and a desk.’

‘Those accommodations were better than many of the company’s dorms, where 70,000 Foxconn workers lived, at times stuffed 20 people to a three-room apartment, employees said. Last year, a dispute over paychecks set off a riot in one of the dormitories, and workers started throwing bottles, trash cans and flaming paper from their windows, according to witnesses. Two hundred police officers wrestled with workers, arresting eight. Afterward, trash cans were removed, and piles of rubbish — and rodents — became a problem.’

Sadly, Mr Lai was one of the workers killed in the explosion at the iPad plant. He suffered 90% burns and died in hospital two days later, his girlfriend only recognising him from his legs. The explosion was later found to have been caused by aluminium dust igniting as three polishing lines worked continuously to keep up with demand a few weeks after the iPad2 was launched. In the drive for profits at any price, though, neither Apple nor Foxconn paid much heed it seems. Just seven months later in December 2011 an iPad factory in Shanghai exploded from……..igniting aluminium dust, resulting in 59 injured, 23 of them hospitalised.

Foxconn, however bad, are not the only villains in the piece and Apple has to take a lot of the blame. When the world’s media started publishing stories about these conditions, notably an undercover report from the Daily Mail, Apple were shocked into action. A massive auditing operation of their suppliers was carried out and the results published. Some of these results showed allegations of under-age workers (under 16 in China) being hired – one audit in 2010 acknowledged 91 employees found to be under this age or were when they were hired at Foxconn alone. Although seemingly going in the right direction, there is a large element of smoke and mirrors being deployed. As a former Apple executive with firsthand experience commented in the NYT report ‘Noncompliance is tolerated, as long as the supplier promises to try harder next time…’

But others disagree. Business for Social Responsibility (BSR) has twice been used by Apple to advise on such issues: ‘We’ve spent years telling Apple there are serious problems and recommending changes,’ said a consultant ‘They don’t want to pre-empt problems, they just want to avoid embarrassments.’

While Apple may indeed have spent 2010 getting more adept at identifying problems and forming action plans to put things right, the company’s own report admits that if situations have not been resolved within 90 days of an audit, it will only ‘continue to collaborate with the supplier towards further improvement.’ It is obvious that the die has been cast – Apple really has nowhere else to go to get its products made: it needs its suppliers as much as they need Apple. Both are caught in the relentless quest for profit at any cost. This is borne out by Apple being approached by companies desperate to become a new supplier. When Apple decides to see if they can supply a particular product or part, they contact the company. The NYT reports says: ‘When the news arrives that Apple is interested…small celebrations erupt. Then, Apple’s requests start.’

Apple typically asks suppliers to specify how much every part costs, how many workers are needed and the size of their salaries. Executives want to know every financial detail. Afterward, Apple calculates how much it will pay for a part. Most suppliers are allowed only the slimmest of profits. So suppliers often try to cut corners, replace expensive chemicals with less costly alternatives or push their employees to work faster and longer, according to people at those companies.

‘The only way you make money working for Apple is figuring out how to do things more efficiently or cheaper,’ said an executive at one company that helped bring the iPad to market. ‘And then they’ll come back the next year, and force a 10 percent price cut.’

The financial evidence for the above is also available. A recent Bloomberg chart shows that from 2007 and the introduction of the iPhone, Apple’s profit margins have increased to over 30%. Over the same period, Hon Hai Precision Industry (Foxconn’s parent) has stayed steady at just 1.5%.  

‘Hon Hai is willing to sacrifice margins so it can get volume and scale,’ said Vincent Chen, in the same candid report.  Chen is an analyst at Yuanta Financial Holding Co in Taipei who has a ‘buy’ rating on the stock. ‘Apple is also getting so large that it needs a supplier that can provide such scale.’

The iPad is ‘very difficult to make,’ Hon Hai founder and Chairman Terry Gou told shareholders in June. Gou’s strategy has earned him the nickname ‘Low-Cost Terry,’ according to Chen.’

Low cost indeed, but high profit for Apple. The real cost as always, is being incurred by millions of Chinese and Far Eastern workers, living in huge de-humanising factory complexes and  working long hours for little pay in often dangerous conditions. And not just at Foxconn. At another Chinese plant, this time owned by Wintek, the workers actually went on strike. They had been asked to use a noxious chemical called n-hexane which is known to cause nerve damage and paralysis. The substance replaced rubbing alcohol to clean iPhone screens, as it evaporates to the air three-times faster and speeds up production. Over a hundred employees suffered injuries as a result of its introduction, prompting the industrial action. The NYT noted:

‘In its supplier responsibility report, Apple said it had ‘required Wintek to stop using n-hexane’ and that ‘Apple has verified that all affected workers have been treated successfully, and we continue to monitor their medical reports until full recuperation.’ Apple also said it required Wintek to fix the ventilation system.

That same month, a reporter interviewed a dozen injured Wintek workers who said they had never been contacted by Apple or its intermediaries, and that Wintek had pressured them to resign and take cash settlements that would absolve the company of liability. After those interviews, Wintek pledged to provide more compensation to the injured workers and Apple sent a representative to speak with some of them.’

Half a year on, trade and business reports highlight the cut in prices being paid by Apple to Wintek for their services. Business has spoken, unlike Wintek which declines to comment on the issue.

So are Apple alone? Not really. They are merely following, very successfully in monetary terms, the rules of capitalism – namely rule Number One – Profit at All Costs. Moving production from a heavily regulated and therefore expensive country like the USA to a relatively unregulated and therefore much cheaper country like China makes perfect economic sense from a capitalist’s point of view. The market dictates all. An Apple executive sums up this attitude with a salient point: ‘You can either manufacture in comfortable, worker-friendly factories, or you can reinvent the product every year, and make it better and faster and cheaper, which requires factories that seem harsh by American standards, and right now, customers care more about a new iPhone than working conditions in China.’

The reality of modern capitalism is that it transcends national borders. Barack Obama once asked Apple CEO Steve Jobs, ‘when are those manufacturing jobs coming back to the USA?’ Jobs famously replied, ‘Those jobs are never coming home.’ This exchange highlights the way that capital does not heed the often spouted patriotism and rhetoric of politicians but deals in cold hard financial facts. Workers would do well to note this and adjust their own attitudes accordingly. Perhaps if we cared less about new gadgets at any cost, humane and environmental, and instead forged stronger links with workers around the globe, we too could adopt a truly global resistance to the onslaught of capital and start paving the way towards socialism and the end of sweatshops and the consumer culture altogether.
David Humphries

Up close and personal (2012)

From the March 2012 issue of the Socialist Standard

Mike Daisey, who makes his living performing monologues on stage, is a self-confessed technology devotee, ‘an Apple aficionado’, ‘a worshipper in the cult of Mac’ – for 15 years or more a total Apple geek. Then one day he says he ‘started to think, and that’s always a problem for any religion, the moment when you begin to think.’ He decided he had to find out for himself what was actually going on within the Apple empire so he assumed the guise of a journalist and set off for Shenzhen, now China’s third largest city with a population of 14 million but just a small town thirty years ago. This is where Foxconn has a massive complex making electronics for Apple, Dell, Nokia, Panasonic, Sony and Samsung.

This is the facility infamous for the netting stretched around the outside of the buildings to thwart suicide attempts. Daisey found a place outside one of the gates away from the many security guards and with the help of a translator interviewed workers who queued up to talk to him, some only 12, 13 or 14 years of age and legally too young to be employed. He learned of the no talking rule on the assembly line, of the supposedly officially enforced eight hour shifts actually being 12 and often 16 hours, of the concrete box 12 foot by 12 foot dormitories with up to 15 beds, of the cameras on the assembly line, in the rooms, in the corridors, everywhere. And everything hand assembled because it’s cheaper than installing expensive high tech assembly equipment.

For more detail on Mike Daisey’s experiences in China researching Apple listen to or read ‘This American Life’ (LINK).

Blogger's Note:
From the above link, "NOTE: This American Life has retracted this story because we learned that many of Mike Daisey's experiences in China were fabricated".

Apple and the Great Chinese Take-Away (2012)

From the March 2012 issue of the Socialist Standard
 Last year Apple earned over $400,000 in profit per employee – more than Goldman Sachs, Exxon Mobil or Google. Apple has 43,000 employees in the US and 20,000 overseas; however, their contractors’ employees number around 700,000 engineers, assemblers, etc., in Asia, Europe and elsewhere (LINK).
Why China? Why not the US?
When Steve Jobs demanded new scratch-free screens for the new iPhone at short notice a Chinese company tendering for the contract constructed and prepared premises including on-site dormitories and a warehouse filled with glass samples with engineers on hand. Just in case they got the contract. They got it. And when the screens were ready and in transit to the Foxconn assembly line 8,000 workers were woken up around midnight, given tea and a biscuit and began a 12 hour shift, producing over 10,000 iPhones a day. According to one executive, ‘no American plant can match that.’ Apple had estimated that around 8,700 industrial engineers would be needed to ‘oversee and guide’ a 200,000 strong assembly line of workers who would be employed in manufacturing iPhones. Company analysts had forecast it would take up to nine months to find that many qualified engineers in the US. In China it took 15 days.

In 1983 the Apple Mac was ‘made in America’; by 2004 Apple products were in large part manufactured and assembled abroad. Currently the software and Apple’s ‘innovative marketing campaigns’ are created in the US by 100 full-time employees and the semiconductors are made in Texas by 2,400 employees of South Korea’s Samsung.

Manufacturing the iPhones in the US would increase the price of each phone by about $65 whilst the profit is often hundreds of dollars per phone. The main factor for having moved the vast majority of jobs to China is not the cost of wages but more to do with ‘inventory costs, supply chains and the time involved in scaling production up and down’, plus it’s still easier to bypass labour regulations and to hire and fire in China than in the US.

It is for reasons like these that so many ‘middle-wage’ jobs have disappeared in the last two decades from the US. Any new jobs that are created there are mostly in the service industry – restaurants, call-centres, hospitals and temporary work, with little upward mobility opportunities. Apple’s own high-tech plant in California became an Apple Care call centre with jobs at $12 per hour.

Martin Hart-Landsberg points out that the manufactured goods of China’s top exporters, though recorded as Chinese products, include around 60% of all items and 85% of the high-tech items produced by foreign companies operating in China. He also cites figures from the US Bureau of Labor Statistics showing manufacturing employment in China falling between 1994 and 2006 from 120.6 million to 111.61 million and, in particular, urban manufacturing (mostly foreign) falling from 54.92 million to 33.52 million. Significantly of total urban employment most growth was in the casual wage or self-employment area – 80 million of 81.7 million ‘informal’ workers.

The Chinese Take-Away
Of the thousands of jobs that have been created from developments in US solar and wind energy, and semiconductor fields within the last decade, much of the actual employment has been abroad. US facilities have been closed to re-emerge in China where executives say they are competing with Apple for shareholders. They are obliged to rival Apple’s growth and profits to survive. Capitalism and its shareholders have no regard for workers wherever they are; their loyalty is to the god of profit only.
Janet Surman