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Foxconn Technology Group in China is reported to supply the world with almost 50 percent of its electronics, so obviously it has a significant impact on the technology sector. Apple, among other leading tech companies, engages Foxconn to manufacture its iPhones and iPads, designed in the U.S.
Taiwan-owned Foxconn is a successful company, but it may be hiding some serious labor problems. If and when these problems ever become fully known, it could rock the technology industry.
Apple has one of the highest market capitalizations in the world, and a change at Foxconn could be material to Apple’s business, too. Most leading tech companies source their products in emerging markets, and this same problem may exist for them too.
Americans and Europeans are consuming increasing quantities of Chinese-made goods, and even after scandals over poisonous toys and drywall, we were not able to look behind Chinese-factory walls and speak to their workers. There are few reports out of China, but one report over the past few years was pretty scary. Workers were threatening group suicides and Foxconn resorted to installing safety nets at its factories to catch jumpers.
The Chinese government often censures the media, blocks access and intimidates investigatory journalists. So what are our options for learning more about the production of the goods we consume? When Western companies outsource production to emerging markets, can they evade Western regulations, product and labor standards too? How does this mesh with consumer protection rules and rights?
There’s good news today, "Apple Opens Suppliers’ Doors to Labor Group." I think Apple’s actions to join the Fair Labor Association (FLA), and open its supplier Foxconn’s factory doors is a reaction to the efforts of playwright and journalist Mike Daisey. In the style of filmmaker Michael Moore, Daisey communicates his activist message through entertainment, as a means of breaking through media channels.
This past year, Daisey dropped a bombshell of news out of China about what’s happening behind Foxconn’s factory walls in Shenzhen, China. Many editors question the creditability of a part-time independent journalist, playwright and performer, with no ability fact check his story.
Considering the news today about Apple joining FLA to open Foxconn’s doors to audit, I hope we soon learn if Daisey is telling tall tales or reporting the truth. For example, the media reported that Foxconn paid raises to distressed workers, but the media did not report or confirm Daisey’s claim that Foxconn also raised the rent on workers, negating any net increase in pay. The media has reported on children working, and poor working conditions, but not to the extent of Daisey's findings.
Mike Daisey’s Play
I saw Mike Daisey’s play in November called "The Agony and Ecstasy of Steve Jobs." Daisey, a self-declared Apple aficionado tells the good, bad and ugly of Steve Jobs and Apple. The “ugly” comes from Apple's activities in China.
The performance starts out funny, but it turns into a tale of morality. The "ecstasy" of the story is the great electronics like Apple's products, and the "agony" refers to how iPhones are made by children and others in poor workplace conditions in China.
Daisey says he went to Foxconn, avoiding Chinese censorship and prison, to interview children workers who work 12- to 16-hour days with no breaks, doing the same repetitive job, with dangerous chemicals in some cases. They sleep in bunk beds stacked eight high, packed like sardines in tiny rooms.
This provocative play asks, “How can you derive ecstasy based on another human being's agony?" By the end of the play, almost every tech user in the audience felt guilty, disturbed and disgusted.
Steve Jobs was an ideal subject. As Malcolm Gladwell recently pointed out in the New Yorker, Jobs was one of the greatest "tweakers" of the high-tech age. Jobs perfected what others invented first. That's not a demotion from inventor, as Gladwell explains that tweakers improve inventions into mass-market successes. Jobs was a passionate perfectionist and he understood what customers wanted. He was great at convincing others they wanted it, too. Jobs was also cheap and demanded the lowest costs possible on his products. That's why Apple and others use manual low cost labor in China rather than robots in the U.S. or elsewhere.
Playwright and performer of "Agony and Ecstasy" Mike Daisey says 50 percent of all electronics sold in America and Europe are manufactured in Shenzhen, China at Foxconn and similar companies. Shenzhen was a tiny town of a few thousand but under the Chinese Communist Party master plan, it grew to a 14-million people factory town. Think Henry Ford model T assembly line in Charlie Chaplin's famous film Modern Times — only this is far worse.
Daisey explains that the factory owners hide the children and horrible conditions from the public and customers like Apple.
If President Obama and Congress want to fix China, then they should focus on this problem, rather than just currency manipulation, subsidies, dumping and trade infractions. This sweatshop problem strikes at the heart of the real underlying issue.
This is a developing story. I emailed David Barboza of The New York Times yesterday after reading his good article “Foxconn Resolves Pay Dispute with Workers.” He wrote back that much more is on the way. Stay tuned.
