Tim Cook has sent a letter to all Apple employees stressing how much the company cares about industrial accidents in its Chinese factories. It comes a day after a graphic story in the New York Times about an explosion in a Chinese iPad factory and two weeks after Apple released a new Supplier Code of Conduct that goes into …
What's the difference between a code of conduct and a contractual obligation. Well with a code of conduct Apple can say that it's not their fault if the factory owners choose to breach it. A contractual obligation would mean that Apple's suppliers would almost certainly have to put their prices to Apple up in order to meet that obligation.
so why doesn't one of the other companies that use these same manufacturing plants step and put in place a contractual obligation? admittedly, it'd benefit all the other clients of the plant too, but the positive press it'd generate would be amazing too.
Apple is an American company, while the Foxconn plant in question is in China. That contract wouldn't be worth the paper it was written on in a Chinese court.
Who said they use the same plants? The use the same supplier. Big difference there. So why would the other companies want to come in to the rescue about a different plant and force better ductwork in a plant their products are not produced? Would Foxconn even do anything as customer X doesnt have anything made in Plant Y anyway.
To put it a different way, Foxconn has more than one plant. Why don't we hear about these issues at the other plants? Even Foxconn city consists of 15 factories.
Facetious by-line, stupid article.
"Those costs obviously don't include software, advertising, design, transport, packaging, but give an indication of the high profit margins that Apple gets off each handset."
That's a whole lot of stupid packed into such a short paragraph. The figures you quote "obviously" don't include some of the largest cost centres (software, design) and yet you're still willing to punt them around as though they mean anything? Anyone still quoting iSupply teardown figures as anything other than a bill of materials, while failing to acknowledge just how much Apple ploughs into the product design and experience, needs to be relieved of their posting privileges.
Is there any danger of some actual, you know, journalism around here? Rather than just helping the ignorance in the echo chamber get a little louder? Did you happen to read the responses from Chinese citizens to the NYT article? Factories that make Apple products are basically *the* place to work, because conditions are so much better than those at factories that produce domestic brand products. Clearly that fact doesn't support the author's agenda, so no surprise it got omitted.
"Did you happen to read the responses from Chinese citizens to the NYT article? Factories that make Apple products are basically *the* place to work, because conditions are so much better than those at factories that produce domestic brand products"
Still doesn't make them good or safe places to work - it's all relative. The sad fact is the workers just don't know how bad they're getting it in the "good" plant because all they have to compare it against is the even worse domestic plants. Put those Chinese workers in a Nissan plant in Japan / UK and they'd keel over in surprise at how different things are when safety is a consideration.
Even the "good" Apple plants are evidently run like C19 mills - instead of flour / cotton floating freely ready to explode / cause terminal lung damage they have aluminium. They could take measures to remove the risk, but Apple (like everyone) are looking for min costs. Why increase your costs by filtering the air when you can just pluck another 20 souls from the labour queue?
Don't fall for the "we take safety" seriously line from *anyone* using Chinese labour. It's cheap for a reason, and I don't mean it's not very good.
"you quote "obviously" don't include some of the largest cost centres (software, design)"
Really? Design, how hard is it to design rounded corners? What about advertising and legal? Especially legal....
"Factories that make Apple products are basically *the* place to work"
As you point out, these things are relative, however that does not necessarily make these places "good" places to work, maybe they are, but only if the other choice is quarrying slate with your teeth.
At no point did I say that the conditions at the factories which make Apple products were "good", merely that they were better. They *could* be good for all I know, but I simply don't and I suspect no-one else likely to comment on here really knows either. The author certainly doesn't.
How hard is it to design rounded corners? Well for people like Samsung, easy, once companies like Apple have done all the real work. It's easy for a lazy eye to think everything is obvious after the fact, but if that's the case why weren't any of these other companies producing phones that looked like the iPhone before the iPhone?
It's pretty obvious that Cook isn't satisfied with how things are, but Apple is a convenient whipping post for every sloppy hack with an axe to grind or a point to score who can't be bothered to do any research.
Re: Nissan plant @Ross 7
Interesting you mention Nissan plant safety since in today's news:
"One Killed In Accident At Smyrna Nissan Plant"
Must be a shock to you that accidents happen at Nissan even in the US of A...
Thank you Ian Davies
for giving me such a good Friday laugh. I especially liked the irony in the statement "...every sloppy hack with an axe to grind or a point to score who can't be bothered to do any research."
I'm sure your iKnighthood is in the post.
What part of Apple's financials, where they say they made $43.82B in gross profit on $108.2B in revenue do you not understand? Or do you not allow the financial facts that Apple files with the SEC about itself affect your judgement? The cost of "software, advertising, design, transport, packaging" doesn't change things enough to alter this issue for Apple.
Perhaps you could try replying to the post I wrote, rather than the post you imagined I wrote.
@The Man Who Fell To Earth
Well Apples gross revenue was $46.33 billion with net profit of $13.06 billion, so one must wonder were you got the $108.2B figure from? Out of your arse maybe?
"How hard is it to design rounded corners? Well for people like Samsung, easy, once companies like Apple have done all the real work."
Good $DEITY, are you actually saying that rounded corners didn't exist before crApple used them, oh! I see, posted Friday @18:14, did you go to the pub early this Friday?
As for prior art, how about this, the iPhoney is a copy of a 4,500 year old design
Apple are missing a trick here
Because of their famed reluctance to respond to journalists/hacks.
They could be making a bog song and dance over this but they are not. I am sure that there are plenty of other companies who would be making sure that if they did this, the world would notice. Their PR Depts would make sure of that.
Whilst I don't like their current stance of trying to sue the likes of Samsung etc, I have to applaud this stance by their senior management.
Now where's my tinfoil hat. I'd expect the 'I hate everything Apple' fanbois will be along soon.
...aluminum should be aluminium.
Unfortunately it is actually aluminum, us Brits misspell it, not the Septics in this instance.
Agree with us Brits though with the Yank version as a variant.
"Unfortunately it is actually aluminum, us Brits misspell it, not the Septics in this instance."
It's a lot more complicated than it might first seem...
Al Yoo Mini-Um
Maybe she was just miniumizing that little detail?
Most companies while saying they care about the people employ do not, complain and get a "if you do not like it here you can always leave". So they are going to care even less about ones working for one they have do work for them, price is all they care about and how it looks not how it is.
He's on shakey ground here. If he's going for the 'we care' message, he has to deliver, otherwise it'll be blatantly obvious that Apple DOESN'T care.
I think governments should say to megacorps, look if you want to sell your product here, 70% of the manufacturing needs to occur here.
Apple cares all right, but it's pricey and you have to pay every couple of years to renew their care for you.
Building here isn't practical
Unless you want it to cost *even more*
If you're talking about the UK, then have a read of paragraph 6 in http://www.raspberrypi.org/archives/509 - no wonder nothing is made in this country any more
I knew our politicians/civil servants/rulemakers were dumb, but I didn't realise just how dumb they were...
The whole point of outsourcing is to cut costs by producing your kit in factories that can do it cheaper. Cheaper usually means cheaper workers and less regulation. This has been happening for years, in fact back in the 70's and 80's Amstrad were using companies such as Orion to produce their computers in factories in South Korea. Orion produced kit for everyone and their dog and I suspect the iPad factory does as well.
Nearly every piece of electronics in your home or office is made in this way. So if people start beating themselves up over their iPhone they had also better start thinking how their DVD player was made, or their kettle. The only difference is Apple are high profile and are perceived to be a bunch of hippies and not the greedy bunch of capitalist pig dogs they really are.
off-shoring weakens the domestic economy by sending jobs and income abroad.
The Big Pile of Stupid is the fact that the domestic production costs would be only very slightly higher - probably no more than a grand total of $30 - but there would be more money floating around in the US or Euro economies from taxes and discretionary worker spending.
Demand and final profits would be higher still without off-shoring.
But this doesn't suit the neanderthal Harvard management mind-set, which is as much about politics and power differentials as it is about prosperity.
So Chinese workers will keep being killed, and US and Euro workers will keep being unemployed and/or poor.
I doubt you could make such things in the EU or the US even if you wanted to. The machinery, natural resources and skills simply aren't there. It will take decades to correct this.
care to tell me where you're numbers come from?
Here's the experience of someone who DID try to manufacture electronics domestically. It would take 4x as long, was substantially more expensive (primarily due to taxes), and would have made the entire project non-viable.
"I’d like to draw attention to one cost in particular that really created problems for us in Britain. Simply put, if we build the Raspberry Pi in Britain, we have to pay a lot more tax. If a British company imports components, it has to pay tax on those (and most components are not made in the UK). If, however, a completed device is made abroad and imported into the UK – with all of those components soldered onto it – it does not attract any import duty at all. This means that it’s really, really tax inefficient for an electronics company to do its manufacturing in Britain, and it’s one of the reasons that so much of our manufacturing goes overseas. Right now, the way things stand means that a company doing its manufacturing abroad, depriving the UK economy, gets a tax break. It’s an absolutely mad way for the Inland Revenue to be running things, and it’s an issue we’ve taken up with the Department for Business, Innovation and Skills."
See the Raspberry Pi article from a few days ago, the skills are there, it could be made but for some ridiculous reason ourlords and masters have decided that even UK designed silicon has a swingeing tax penalty applied to it when it's imported*, this makes it prohibitively expensive to manufacture hi-tech here. Oh and we have those pesk health and safety laws as well as environmental rergulations that have to be obeyed too.
*Of course, the answer is to fab the silicon here too but again, that's expensive here too, see above for reasons.
"The Big Pile of Stupid is the fact that the domestic production costs would be only very slightly higher - probably no more than a grand total of $30 - but there would be more money floating around in the US or Euro economies from taxes and discretionary worker spending."
While I don't disagree with the last statement, $30 x 10 million iPhones == $300 million. That's not exactly chump change.
Producing in the UK
There's history as to why everything went offshore. Because the Japanese had a head start on solid state kit, all the British stuff suddenly looked unreliable and overpriced. Remember when you couldn't move for TV's made by companies such as Bush, ITT, Fidelity, etc? Made In The UK stickers proudly stuck on the back.
Then Sony and Panasonic came along with kit everyone wanted and was reliable. Remember the first time you saw the picture on a Sony Trinitron? The British manufacturers died out or just got the likes of Orion to make their TV's for them.
Once it's gone the cat is out the bag. Ironically the Japanese kit were were all falling over ourselves to buy in the 80's is now made in China. And in 20 years it'll probably be India instead.
You don't want to be fabbing chips in your own back yard, lad. Horribly polluting business, Toxic Superfund class stuff. Cadmium in the groundwater and all that.
Indeed, nasty polluting processes are used in chip manufacturing which is why it's expensive to produce them in a country that gives a rats arse about the environment and workers.
"...it’s an issue we’ve taken up with the Department for Business, Innovation and Skills."
A classic exercise in futility. What is and is not dutiable / taxable on import into the EU is decided by the EU and HMRC is bound by the EU TARIC database in this matter. The only place this goes is (assuming that they can be arsed) the British Government raising it with the EU and getting told to fuck off by whichever Commissioners are getting their lunches paid for by the Far Eastern tech industries.
Does Apple care enough to bring all manufacturing to the U.S. and only get by making 80% of their current profits? I didn't think so... B.S. lip service from talking heads.
"That's a whole lot of stupid packed into such a short paragraph. The figures you quote "obviously" don't include some of the largest cost centres (software, design) and yet you're still willing to punt them around as though they mean anything? Anyone still quoting iSupply teardown figures as anything other than a bill of materials, while failing to acknowledge just how much Apple ploughs into the product design and experience, needs to be relieved of their posting privileges."
This BOM profit also ignores the 30% revenue from iTunes/App Store stuff, so I'd say it all works out roughly fairly.
Matt Piechota, I think the logic was, that we'd pay $30 more for our shiny, shiny. That way the difference wouldn't matter.
What I think, TheOtherHobbbes meant, was that if there were all these extra people employed domestically making iPhones etc, there would be more disposable income per capita and therefore the extra $30 on the price of an iPhone wouldn't matter.
The point RaspberryPi make is a very sober and depressing one and one the policy makers should be addressing.
If we keep outsourcing and letting global megacorps avoid paying due taxes, sooner or later, all we'll have done is move the money and power from the West to the East.
"The May 2011 explosion in a Foxconn factory in Chengdu was blamed on aluminum dust and took place in a unit where workers polished iPads; it left four dead and 18 severely injured.
HP, Microsoft, Dell, IBM, Nokia use exactly the same manufacturers, as Cook points out."
HOWEVER, what were the chinese polishing which contributed to the dust which exploded? iPADS! Not a plastic-framed HP, IBM computer or Nokia phone. So far, most of the accidents seem to be related to Apple parts. Maybe other corps don't use certain materials due to inherent dangers in their manufacture or refining?
...maybe you're just fluffing around in the dark and don't have a clue what you're talking about?
Nah, no need to fluff around in the dark when the article cites the cause of the explosion....
This might interest some readers...
"Han praised Apple for agreeing to random inspections. “Oftentimes, the company knows when an inspection is coming and they plan for it by constructing a new plan to circumvent the inspection or reducing the number of employees,” she says.
Still, there is much progress for Foxconn to make, says Han. She notes that China has passed relatively robust wage-and-hour and employee-safety laws, but Foxconn and other suppliers routinely ignore such laws, while the government looks the other way. “It sounds basic, but actual compliance with these laws would be a big step in the right direction,” she says.
“The problem is that in China, the unions are government sponsored, not independent. So if there is strong support in the government for a particular industry, the union is not going to come in and demand new things for workers,” says Han.
Despite the setbacks, Chinese workers are already making progress in improving their lot, with our without Apple, says Han. “There’s an awaking that to the fact that they can assert their rights.”"
More at the URL
We would all gain if the cost of labour would rise in China. Demanding better working conditions would certainly help.
I remember when "MAD" had a sticker with the text "Made by slave labour in the USSR" to be stuck on, for instance, cars made in the USSR.
Now they could provide us with ones with the text "Made by slave labour in China" to be stuck on iThings.
Well, Apple is, of course, the only company, exploiting cheep labour in China.
History, dear people
Great comment by @Ian, but I would add a couple things that's been mentioned elsewhere.
The NYT know how to report on important news, but also how to propagandize like Pravda did, let's be honest. (We all know how reliable anonymous sources have been these last 10 years, though they do have a place when used responsibly per Glenn Greenwald).
If you read the NYT article closely, Apple's 40% margin is not really the deciding factor to be in China, it's the flexibility and massive engineering manpower that's available 24 hours/day on 6 hours notice when a component needs to be changed after a product mgmt decision...that is absolutely NOT possible in the US now.
Also, I love that while we've been saving billions on Chinese products since Nixon set the table for us with Mao in China in 1973-ish, all of a sudden, there's indignation? Come on. (Anyone hear about the China supply-chain mafia kingpin, known as Walmart? Duh.)
Every country is going to go through their Industrial Age exploitation phase like the US did 110 years ago with the Triangle Fire and the UK with the London "black fog" earlier. We can speed it up a bit now, but everybody: Please, get off your high horses...
And China, India, Brasil may have a tougher time, because of the fine mess that Wall Street/City created for us...along with their humungo populations that need to get off an agricultural, non-modern economy and raise their standards-of-living.
Tough decisions, all around.
(Though, let's all keep wasting time taking potshots at an innovative gadget company with a 5% global PC share, 8% phone share & 58% tablet share, while all the other Fortune 500 firms get a pass in China. Makes sense.)
"HOWEVER, what were the chinese polishing which contributed to the dust which exploded? iPADS! Not a plastic-framed HP, IBM computer or Nokia phone. So far, most of the accidents seem to be related to Apple parts. Maybe other corps don't use certain materials due to inherent dangers in their manufacture or refining?"
What baloney - better turn off all the electricity to your house and go and live in a cave as people die mining the coal, oil and gas used to generate power. Then you better walk to work as cars are dangerous as is the petrol. Then consume nothing as whatever you do there is a human 'life' cost somewhere.
while his comment is baloney
so is yours
big difference between as many as 5000 miners dying per year in China from accidents and the current US average since the 1990s of well under 100 per year ...
we have around 20,000 injuries per year in mining .. if the death to injury ratio is about the same in China, that's about a million mining injuries per year for the *Peoples* Republic
I'll agree their is risk (which our miners are well aware of), however, I think it wrong to have allowed China in the WTO considering that country's horrible record on basic human rights
it is NOT fair trade .. and there are many more important issues in the world today than whether you can have a shiny new vanity smartphone for 10% less or a coffee maker for $20 at Walmart, all resulting in decreasing real wages and profitability of companies that manufacture in their western homes
that being said, western governments need to make the business environment more friendly and less expensive tax-wise .. a good example is Canada in North America, and despite high wages and very good working conditions, Germany, who are the 2nd largest net exporters of goods ( 2nd largest trade surplus ) in the world
"Matt Piechota, I think the logic was, that we'd pay $30 more for our shiny, shiny. That way the difference wouldn't matter."
No - the manufacturers and the jobs would go elsewhere. Manufacturers make products in China as the cost of labour is relatively cheap - if it were to get more expensive they would lose those jobs. You are not in the real world if you think people would just pay $30 extra to have it made in the US rather than in China.
How many people buy Fairtrade fruit - the answer is very little. You go in the supermarket and see Fairtrade bananas and normal ones - most people but the normal ones as they are a bit cheaper.
"We would all gain if the cost of labour would rise in China. Demanding better working conditions would certainly help."
Oh really - no what would actually happen is those jobs would move to the Philippines / somewhere else and those Chinese workers would be out of a job (probably in a worse position).
Why are people not looking at Nokia or the other phone makers - Apple only have about 8% of the phone market - I'm sure the other 92% are using just the same factories.
Manufacturers are going to keep using China (or would move somewhere cheaper with just the same issues). A manufacturer could not afford to pay a lot more than their competitors do for labour in the long term - it's just not competitive.