By Chi-Chi Zhang, CNN
February 6, 2012
Chengdu, China (CNN) -- Miss Chen stares curiously at the iPad. Even though she works overtime in a factory in southwestern China that manufactures them, she's never seen the finished product.
"Wow, I want it," said Chen, brushing her finger across the glossy screen with curiosity and amazement.
The 18-year-old student from a village outside of the southern megacity of Chongqing is one of more than one million factory workers at a Chinese company that helps manufacture products for Apple Inc.'s lucrative global empire, which raked in a record $46.3 billion in sales last quarter.
At a factory about an hour west of Sichuan's capital Chengdu, Foxconn Technology Group, one of Apple's biggest manufacturing partners. Foxconn employs hundreds of thousands who work day or night shifts, eating and sleeping at company facilities, as they help build electronics products for Apple and many other global brand names, such as Amazon's Kindle and Microsoft's Xbox.
Chen's name has been changed for this story. She told CNN that all her Foxconn colleagues have been instructed not to talk to any reporter or "criminal liability shall be investigated according to law."
Apple criticized for factory conditions Report: Chinese workers threaten suicide
Rights groups like Hong Kong-based China Labour Bulletin and Students and Scholars Against Corporate Misbehavior say that Foxconn's stringent military-like culture is one of surveillance, obedience and not challenging authority. Workers are told obey or leave.
It's an oppressive culture that labor groups say contributed to a slew of suicides in 2010 at the company's Shenzhen plant -- prompting Foxconn to install nets in an effort to prevent employees from jumping.
As a poor college student with no work experience, looking for job in China's competitive market is an uphill battle. So when Chen was offered a one-month position at Foxconn during the Spring Festival -- with promises of great benefits and little overtime, she jumped at the chance.
Her heart fell after arriving at the Foxconn factory, when she found out only senior employees get such benefits and sick leaves. Ms. Chen said she's also forced to work overtime on a regular basis.
"During my first day of work, an older worker said to me, 'why did you come to Foxconn? Don't ever think about it again and leave right now'," said Chen, who plans to return to her studies at a Chongqing university soon. "Foxconn employees have a saying, "they use women as men and men as machines."
Foxconn is a part of Taiwan's Hong Hai Precision Industry Co. which supplies iPads and iPhones. Foxconn recently released a statement defending its corporate practices, stating its employees are entitled to numerous benefits including access to health care and opportunities for promotions and training.
"Foxconn takes our responsibility to our employees very seriously and we work hard to give our 1.2 million employees in China a safe and positive working environment and compensation and benefits that are competitive with all of our industry peers in that location," said Foxconn in an email statement to CNN.
In response to questions from CNN, Apple released this statement: "We care about every worker in our worldwide supply chain. We insist that our suppliers provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes wherever Apple products are made. Our suppliers must live up to these requirements if they want to keep doing business with Apple."
In an email to Apple employees, CEO Tim Cook said the company cares about every worker and "any accident is deeply troubling, and any issue with working conditions is cause for concern."
Despite widespread reports of poor working conditions, some experts say Foxconn factories still offer better benefits and surroundings than most factories in China -- providing air conditioning, heating and clean dorms for its employees.
"These companies are making huge profits but workers feel that they are not getting a fair share," said Geoffrey Crothall of China Labour Bulletin. "But just because Apple is making a profit doesn't mean they are passing that onto Foxconn; the margins are slim."
Crothall said it's important to empower workers. But it's also a challenge for Apple to find a manufacturer that delivers the quality and speed Foxconn can with its vast resources, he added.
After three weeks of applying more than 4,000 stickers a day onto iPad screens by hand and working 60 hours a week in an assembly line, Chen says she's ready to go back to school and study hard so she'll never have to return to Foxconn.
"It's so boring, I can't bear it anymore. Everyday is like: I get off from work and I go to bed. I get up in the morning, and I go to work. It is my daily routine and I almost feel like an animal," said Ms. Chen, who aspires to become a biologist.
When asked why humans do machine-like work at Foxconn, she responds, "Well, humans are cheaper."
By Paul Armstrong, CNN
February 6, 2012
Earlier this month Apple released its annual supplier responsibility report which detailed alleged workplace health and safety protocol violations by its suppliers.
One of its chief suppliers, Foxconn, has been at the center of a storm in recent months after workers at some of its plants in China staged strikes and even threatened mass suicide to win better working conditions.
Who is Foxconn?
Foxconn is part of Taiwan-based Hon Hai Precision Industry Co., one of the world's largest suppliers of components for the electronics industry. Much of its manufacturing division is based in mainland China, where it assembles a range of products including Apple's iPhone and iPad, Amazon's Kindle and Microsoft's Xbox.
With 1.2 million employees in China alone, production takes place at more than 12 factories across the country, including the giant Longhua plant in the southern city of Shenzhen -- the company's biggest manufacturing facility, and employer of almost half of its Chinese workforce.
Foxconn produces an estimated 40% of the world's consumer electronics.
Who does it do business with?
Apple and Foxconn: Who makes your iPhone Apple criticized for factory conditions Report: Chinese workers threaten suicide China's Apple black market
Foxconn makes everything from motherboards and gaming consoles to MP3 players and smartphones for some of the world's biggest electronics brands, including Dell, Sony and Hewlett-Packard.
However Apple is its prized partnership. The company has seen phenomenal sales growth in mainland China in particular and opened Asia's largest Apple Store in Shanghai in September. The company announced in July that its revenue from the Greater China region, which includes Hong Kong and Taiwan, reached $8.8 billion for the first three quarters of the fiscal year, a more than six-fold increase over the same period a year earlier.
Last week, analysts at investment bank Morgan Stanley predicted the U.S. tech giant could sell 40 million iPhone handsets in China alone in 2013 when it agrees to deals with more Chinese telecom providers.
This compares to the 68.5 million iPhones Apple sold worldwide in 2011.
What is it accused of?
Though Foxconn has a reputation in the technology field for its efficiency and low overhead, critics say workers are treated like machines for low pay in an oppressive military-style environment -- employees typically eat, sleep and work at the giant complexes.
"They wake up, they have breakfast, they go to work, they work a solid shift, they come back to their dormitories and they sleep ... it's a very dehumanizing place, and the workers are little more than machines there," said Geoffrey Crothall of the China Labour Bulletin, a Hong-Kong based non-profit group that tries to protect workers' rights across China.
In 2010, Foxconn raised workers' pay twice at its factory in Shenzhen after a spate of suicides, Chinese state media reported at the time.
In January, Microsoft issued a statement saying it was investigating a report that workers at a plant that manufactures the Xbox game system had threatened mass suicide in a pay dispute. Foxconn would only say that there was a protest at its Wuhan factory in Hubei province in central China and that it was over.
Last year, an explosion at a Foxconn plant that produces Apple's iPad2 killed four people and injured 18 more. Chinese officials said the blast may have been caused by combustible dust in a polishing workshop. The incident, in the southwestern city of Chengdu, followed a report by rights group Students and Scholars Against Corporate Misbehavior (SACOM) that workers at the same plant do not have adequate training in the use of chemicals and do not have regular on the job health checks.
A number of workers SACOM said it spoke to when compiling the report complained of allergies being ignored by Foxconn, poor ventilation and inadequate personal protective equipment.
What has it said?
Though Foxconn maintains its workers are treated well, Chairman Terry Gou made an unprecedented public apology in 2010 after the suicides. Foxconn said it had introduced counselors, started a 24-hour phone counseling service and opened a stress room where workers can take out frustration on mannequins with bats.
In January the company published a statement saying it is "committed to honoring and respecting the codes of conduct of our customers, our own policies and practices, and the laws and regulations of the jurisdictions where we do business."
Addressing specific criticisms, the company said all employees were given regular breaks, access to healthcare, a safe environment to work in and the opportunity for promotion to other technical or line management positions.
The statement concluded by saying Foxconn was "not perfect" but had made "tremendous progress" with the positive impact its programs were having on employees.
What does Apple say?
Apple CEO Tim Cook recently responded to a report in the New York Times that described the "human cost" of building an IPad at the Foxconn plants.
In an email to Apple employees, he said the company had never turned a blind eye" to the problems in its supply chain and any suggestion it does not care about the plight of workers is "patently false."
"We care about every worker in our worldwide supply chain" the company added in a statement issued Sunday. "We insist that our suppliers provide safe working conditions, treat workers with dignity and respect and use environmentally responsible manufacturing processes wherever Apple products are made. Our suppliers must live up to these requirements if they want to keep doing business with Apple."
In the 2011 edition of its supplier progress report, Apple said Cook and other senior company representatives had visited Foxconn's Shenzhen plant a year earlier to evaluate conditions there following reports of suicide attempts.
Apple then commissioned an independent review by a team of suicide prevention experts. This team was asked to conduct a deeper investigation -- which included speaking with workers and site managers -- evaluate Foxconn's response, and recommend strategies for supporting workers' mental health in the future.
According to this year's supplier progress report, workers in Shenzhen now have access to free psychological counseling, including a 24-hour hotline, to get advice on their personal and professional concerns. Apple also pointed to the establishment of its employee assistance program (EAP), which is focused on social-support networks and "maintaining employee mental health."
The 2012 report also provided a list of Apple's leading production suppliers for the first time, with each one subject to an audit of safety and the environmental conditions. It said one of the most significant improvements had been in clamping down on labor violations -- specifically the use of underage workers.
The same report also responded to last year's deadly explosion at Foxconn's Chengdu plant, saying new requirements for handling combustible dust throughout its supply chain had been established. These included better ventilation and more comprehensive inspections at production facilities.