A Foxconn Breakdown: Its Strengths, Strangeness, and Scrutiny

You can't often think of the word "Apple" without thinking of the word "Foxconn" as well. The two are entangled in both business and culture – the former, a result of Foxconn's contract to assemble Apple's iPads and iPhones, and the latter, a result of the continued questions surrounding conditions for the company's million-plus factory workers.

Foxconn tends to only pop up in the news when one of two things happens: Its workers threaten (or commit) suicide or the company decides to expand its manufacturing capabilities to process even more of Apple's current or future devices. But the company has popped up in the press a bit more than usual lately for a number of reasons beyond the "standard" stories listed above. And each of Foxconn's appearances sheds a different light on the company's strengths, strangeness, and scrutiny.

How U.S. Lost Out on iPhone Work

The New York Times recently published a detailed look at the various reasons why technological powerhouses like Apple flock to overseas labor. Apple's reasons for doing so aren't what you might think at first: Foxconn employees aren't just cheaper labor. Rather, Apple's initial decision to move manufacturing to Asia came as a result of foreign companies' tremendous ability to scale and their dominance of the supply chain.

"[Foxconn] could hire 3,000 people overnight," said Jennifer Rigoni, Apple's former worldwide supply demand manager, in an interview with the Times. "What U.S. plant can find 3,000 people overnight and convince them to live in dorms?"

According to the article, Apple initially estimated that it would take up to nine months in the U.S. for the company to find 8,700 industrial engineers to supervise the more than 200,000 assembly-line workers involved in manufacturing iPhones. Factories in China generated this workforce in 15 days.

"The entire supply chain is in China now," said an undisclosed former Apple executive in an interview with the Times. "You need a thousand rubber gaskets? That's the factory next door. You need a million screws? That factory is a block away. You need that screw made a little bit different? It will take three hours."

Foxconn CEO Apologies for Comparing Workers to "Animals"

In a bit of news from the "could not have come at a worse time" department, Foxconn CEO Terry Gou for remarks that he claims were allegedly taken out of context. Speaking at an annual company meeting alongside Taipei Zoo director Chin Shih-chien, Gou asked Chin, "how animals should be managed."

His reason for doing so?

"Hon Hai has a workforce of over one million worldwide and as human beings are also animals, to manage one million animals gives me a headache," said a report by WantChina Times.

Foxconn later issued a statement saying that Gou meant that that all humans are members of the animal kingdom and, as such, perhaps Chin had insight or experience that could somehow translate over to the business world.

"At no time did Mr. Gou seek to portray Foxconn employees in the negative context some media reports have suggested," said Foxconn's statement.

Apple Promises New Inspections

While Apple itself won't be doing the inspecting, the company recently agreed to let outside monitors from the nonprofit Fair Labor Association perform random and unannounced inspections of five percent of the factories that manufacture Apple products. Apple's also posted a full list of its worldwide suppliers as part of its annual Supplier Responsibility Progress Report, a company first.

"Thanks to our supplier responsibility program, we've seen dramatic improvements in hiring practices by our suppliers. To prevent the use of underage labor, our team interviews workers, checks employment records and audits the age verification systems our suppliers use," reads a leaked letter to Apple employees by CEO Tim Cook, sent shortly after the official launch of the 2012 Supplier Responsibility Progress Report.

"These efforts have been very successful and, as a result, cases of underage labor were down sharply from last year. We found no underage workers at our final assembly suppliers, and we will not rest until the number is zero everywhere."

The move comes shortly after an episode of the national radio show This American Life featured an abridged version of Mike Daisey's one-man show, "The Agony and the Ecstasy of Steve Jobs." In the episode, Daisey recounts his personal trip to the Foxconn factory in Shenzhen, China, in an effort to discover just who makes the products that he professes to "worship." Toward the conclusion of Daisey's segment, he calls on Apple to increase its reporting and oversight of the conditions that workers allegedly face in factories like Foxconn's.

According to a blog post on This American Life's website, Daisey doesn't appear to be as pleased with Apple's shift in reporting as other tech pundits are.

"Apple has released a list of its suppliers, but it still hides the companies it audited with anonymity. This makes it impossible to learn anything new about what is going on in Apple's supply chain, to verify anything, or hold anyone responsible. The FLA will audit a tiny percentage of Apple's factories, and also won't make public which factories they audit," Daisey said.

"If Apple would spend less energy finessing its public image, and instead apply its efforts to real transparency and accountability, it could be a true leader for the electronics industry. Apple today is still saying what it said yesterday: trust us, we know best, there's nothing to worry about. They have not earned the trust they are asking for."

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