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OM in the News:Thinking About Foxconn

November 7, 2012

In describing Foxconn, China’s massive contract manufacturer, Fortune (Oct.29, 2012) writes that the firm “has become synonymous with emblematic 21st-century workplace misery.” In September, worker brawls triggered riots at its assembly plant in central China. From January – June, 2010, 14 workers at Foxconn’s massive operation in Shenzhe — a facility  puts together iPads and iPhones — committed suicide at the company dorms, while 4 others tried and failed. Apple responded by hiring the Fair Labor Association, a global monitoring group, to report on conditions at Foxconn. The findings (high rates of worker accidents and forced overtime) prompted Apple CEO Tim Cook to pledge he’d work with Foxconn to improve conditions.

No one disputes that Foxconn needs to make significant changes. But often lost in the criticism of Apple and Foxconn is some local context. Although Foxconn may run its plants in a way that appalls Westerners, it turns away nearly 3 workers for every one it hires in China every year. Nor is Foxconn simply a sweatshop doing low-tech assembly of devices. Ranked 43rd on the Fortune Global 500, the firm is an innovator too. It is “the only company on the planet that could mass-produce such an array of products so quickly on the same production lines,” says one China expert.

And while the central government in Beijing has tried to pressure the company to clean up its act, local officials are constantly wooing Foxconn to set up new operations in their provinces. Officials in Henan, for example, helped the company recruit thousands of young workers to a new iPhone 5 factory in the city of Zhengzhou.

Recently, the nonprofit China Labor Watch issued a report on HEG Electronics (a major Samsung supplier) that documented the use of child labor in its factories. The report concluded: “Working conditions at HEG are well below those general conditions in Apple’s supplier factories.”

Discussion questions:

1. Why is Apple tied to Foxconn?

2. What human resource issues discussed in Chapter 10 are violated at Foxconn?

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