Apple supply chain

Last updated

Apple Inc. manufactures most of its products in China through partners like Foxconn. Apple's decision to outsource its manufacturing has received significant criticism, due to allegations of poor working conditions, long work hours, and other labor rights violations. In response, Apple launched its Supplier Responsibility program, which aimed to improve Apple's oversight of supplier partners and enforce its ethics policies. It has also attempted to introduce greater diversification into its supply chain by sourcing products from other countries.

Contents

Several product leaks have come from Apple's supply chain rather than its corporate offices, leading Apple to reinforce its secrecy measures. [1]

Overview

Many reports allege that sweatshop conditions existed in factories in China, where the contract manufacturers, Foxconn and Inventec, operate the factories that produce the iPod. One iPod factory, as an example, employed over 200,000 workers who lived and worked in the factory, and regularly performed more than 60 hours of labor per week. The article also reported that workers made around US$100 per month and were required to live on the premises and pay for rent and food from the company. Living expenses—a requirement of keeping the job—typically required that employees spend a little over half of their earnings. The article also said that workers were given buckets to wash their clothes in. [2] [3] [4]

Immediately after the allegation, Apple launched an investigation and worked with their manufacturers to ensure that conditions were acceptable by its standards. [5] In 2007, Apple started yearly audits of the labor conditions of all its suppliers, slowly raising standards and severing relationships with suppliers that did not comply—yearly progress reports have also been published since 2008. [6] [ non-primary source needed ]

In 2010, workers in China planned to sue iPhone contractors over poisoning from a cleaner used to clean LCD screens. One worker claimed that they were not informed of possible occupational illnesses. [7]

A 2014 BBC investigation found excessive hours and other problems persisted, despite Apple's promise to reform factory practice after the 2010 Foxconn suicides. The Pegatron factory was once again the subject of review, as reporters gained access to the working conditions inside through recruitment as employees. While the BBC maintained that the experiences of its reporters showed that labor violations were continuing since 2010, Apple publicly disagreed with the BBC and stated: "We are aware of no other company doing as much as Apple to ensure fair and safe working conditions". [8]

In the period following these exposures, Apple has continued to receive criticism for its labor rights record. Reports in 2015 and 2016 from the labor rights organization, China Labor Watch, noted that Apple's supplier Pegatron's wages were too low to cover living costs by themselves, forcing workers to put in excessive amounts of overtime hours in order to make ends meet. [9] [10]

In March 2017, The Wall Street Journal reported that Apple would begin manufacturing iPhone models in India "over the next two months", [11] and in May, the Journal wrote that an Apple manufacturer had begun production of iPhone SE in the country, [12] In April 2019, Apple initiated manufacturing of iPhone 7 at its Bengaluru facility. [13]

In February 2020, a report by the Australian Strategic Policy Institute listed Apple as a company that was "potentially directly or indirectly benefiting" from forced Uyghur labor. [14] In 2020, Apple lobbyists tried to weaken the Uyghur Forced Labor Prevention Act, a U.S. bill against forced labor in Xinjiang, China. [15]

During the 2022 COVID-19 protests in China, Chinese state-owned company Wingtech was reported by The Wall Street Journal to gain an additional foothold in Apple's supply chain following protests at a Foxconn factory in the Zhengzhou Airport Economy Zone. [16]

Foxconn

Apple's considerable commercial success is partly attributable to the outsourcing of its consumer electronics production to Asia. As the principal manufacturer of products and components for Apple, Taiwanese company Foxconn employed 1.4 million China-based workers in 2013. The workers are part of China's "floating population" of 200 million migrants, at the bottom of what Taiwanese tech entrepreneur Stan Shih calls "the smiling curve". Controlling the upturned edges of the smile—brand, design, and engineering on one side, and marketing, sales, and external relations on the other—is what ensures major profit margins. [17]

Apple, Foxconn and China's workers are stakeholders in high-technology production, but relations between the three are perceived by analysts as imbalanced. Apple was able to capture 58.5 percent of the value of the iPhone, despite the fact that the manufacture of the product is entirely outsourced. Particularly notable is that labor costs in China account for the smallest share: 1.8 percent, or nearly US$10, of the US$549 retail price. While both Apple and Foxconn rely on Chinese workers to perform 12-hour working days to meet demand, the costs of Chinese labor in processing and assembly are insignificant in the overall commercial success of Apple. Other major component providers—such as Samsung and LG—captured slightly over 14 percent of the value of the iPhone, while the cost of raw materials was just over one-fifth of the total value (21.9 percent). [17]

Wages average from $1 to $2 an hour for Foxconn workers, including overtime, and are dependent upon location—such rates are attractive by China's rural standards. Foxconn workers typically complete 50-hour work weeks and 12-hour shifts; however, work weeks of up to 100 hours are not unheard of during peak production periods. Foxconn workers typically cannot afford the iPads and iPhones they assemble. [18]

In 2009 and 2010, the Foxconn factories at the Foxconn City industrial park in Longhua, Shenzhen, China, [19] were heavily criticized in the press, with one source describing conditions as a "white collar prison". [20] In 2009, Foxconn guards were videotaped beating employees. [21]

Foxconn employee suicides

On July 16, 2009, Sun Danyong, a Chinese factory worker employed by Foxconn, committed suicide, after reporting that he lost a prototype model for a fourth generation iPhone. [21] [22] [23] Upon filing his report on July 13, Chinese media reported that his residence was searched by Foxconn employees, and that he was beaten and interrogated by his superiors—actions that are illegal under both Chinese and American law. The incident raised questions regarding Apple's secrecy policy and working conditions in their Chinese factories. An Apple spokesman told reporters that the company was "saddened by the tragic loss of this young employee." [24] Apple's relationship with Foxconn regarding corporate security has been a continuing subject of controversy since Sun Danyong's death. [25] [26]

Apple policy on how it influences the corporate culture of its suppliers is presented in the "Supplier Responsibility Progress Reports" document. [6] Holding suppliers accountable for their errors and omissions in their relationship with Apple is an area of concern Apple takes seriously. In one report, Apple stated:

[our] procurement decisions take into account a facility's social responsibility performance, along with factors such as quality, cost, and timely delivery. When social responsibility performance consistently fails to meet Apple expectations, we terminate business. [6]

Given Apple's stated policy at the time of the death, terminating relationships with such suppliers was potentially difficult without incurring huge financial losses. [27]

Later in April 2010, four workers committed suicide in a single month in the same factory, signifying the beginning of the 2010 "Foxconn suicides" incident. [28] By May 2010, 12 workers had committed suicide at Foxconn's operations in China - although the number of suicides was lower than the general suicide rate in China. [29] Apple, Hewlett Packard, and other clients of Foxconn stated that they were investigating the situation. [22] A total of 18 suicide attempts were recorded at the Foxconn facility in 2010, with 14 attempts resulting in deaths. [30] [31] [32]

In response to the suicides, Foxconn substantially increased wages for its Shenzhen factory workforce, [33] [34] installed suicide-prevention netting, [35] brought in Buddhist monks to conduct prayer sessions inside the factory, [36] and asked employees to sign no-suicide pledges. [37] Workers were also forced to sign a legally binding document guaranteeing that they and their descendants would not sue the company as a result of unexpected death, self-injury, or suicide. After the changes were implemented, it was not clear how employees who fail to abide by the terms of the new agreement will be sanctioned.

Labor force

Foxconn's use of students and minors is part of its pursuit of low-cost, flexible labor. When the fallout of the 2010 suicides left Foxconn with a labor shortage, the Henan provincial government assisted with the breach. The province directed 100,000 vocational students to staff the Shenzhen assembly lines as "interns" (the Chinese term shixi can also mean "trainee") after providing them with nine days' notice. Students were told that those who failed to comply would not be allowed to graduate. [18]

Interns have become a significant component of Foxconn's labor force, constituting as high as 15 percent of the workforce—or 180,000 interns company-wide—at peak times, making it the largest "internship" program in the world. Teachers have been stationed in the factory compound to monitor attendance, and some interns have been as young as 14—by the company's own admission—thereby violating Chinese laws. According to SACOM's Jenny Chan, Foxconn, and other similar manufacturers, are "covertly" using interns to avoid detection and culpability. The young people are hired through the same labor agencies that hire Foxconn's "dispatch workers", who are deprived of standard benefits and protections. [18]

US-based China Labor Watch (CLW) investigated into conditions at three factories operated by Pegatron, which makes equipment for Apple computers and iPhones, and found that Pegatron hired children under the age of 18—the child laborers worked under the same poor conditions as adult staff. In total, 10,000 employees aged between 16 and 20 worked in crowded production rooms, performing the same tasks as adults. Some of the children were paid less, and others did not have their wages paid on time. [38]

In 2020, The Information reported that Apple discovered on multiple occasions that one of its Chinese-suppliers, Suyin Electronics, relied on child labor, but took three years to fully cut ties with the company. Ten former members of Apple's supplier responsibility team said that Apple has been slow to cut ties with other suppliers that repeatedly violate Apple's labor policies when doing so would decrease profits. [39]

Working conditions

Workers who assemble iPhones, iPads, and other devices often labor under harsh conditions, according to employees inside the Foxconn plants. According to company reports and advocacy, Apple's suppliers in China have improperly disposed of hazardous waste and falsified records. [40]

Forty-nine young workers were poisoned at the Lianjian Technology factory in Suzhou Industrial Park by the toxic chemical hexane, used to wipe clean the iPad display screens and speed up efficiency. To save money, the factory did not provide proper ventilation during the cleaning process, and workers developed neurological problems, the loss of motor function, numb limbs, and complained of constantly fainting and being overcome by a debilitating fatigue. Some of these sick workers were eventually bought off with a lump payment of 8,000 or 9,000 yuan (US$1,200–$1,400), but only after signing an agreement stating they would not bring claims against Apple or its supplier companies in the future. [41]

An explosion in May 2011 at a Foxconn iPad factory in Chengdu, China, killed four people and injured 18. Employees worked excessive overtime—in some cases, seven days a week—and lived in crowded dorms. Some said they stand so long that their legs swell until they can hardly walk. [40]

See also

Related Research Articles

<span class="mw-page-title-main">Apple Inc.</span> American multinational technology company

Apple Inc. is an American multinational corporation and technology company headquartered in Cupertino, California, in Silicon Valley. It designs, develops, and sells consumer electronics, computer software, and online services. Devices include the iPhone, iPad, Mac, Apple Watch, Vision Pro, and Apple TV; operating systems include iOS, iPadOS, and macOS; and software applications and services include iTunes, iCloud, Apple Music, and Apple TV+.

<span class="mw-page-title-main">Sweatshop</span> Workplace that has socially unacceptable working conditions

A sweatshop or sweat factory is a crowded workplace with very poor or illegal working conditions. The manual workers are poorly paid, work long hours, and experience poor working conditions. Some illegal working conditions include poor ventilation, little to no breaks, inadequate work space, insufficient lighting, or uncomfortably/dangerously high or low temperatures. The work may be difficult, tiresome, dangerous, climatically challenging, or underpaid. Workers in sweatshops may work long hours with unfair wages, regardless of laws mandating overtime pay or a minimum wage; child labor laws may also be violated. Women make up 85 to 90% of sweatshop workers and may be forced by employers to take birth control and routine pregnancy tests to avoid supporting maternity leave or providing health benefits.

A contract manufacturer (CM) is a manufacturer that contracts with a firm for components or products. It is a form of outsourcing. A contract manufacturer performing packaging operations is called copacker or a contract packager. Brand name companies focus on product innovation, design and sales, while the manufacturing takes place in independent factories.

Hon Hai Precision Industry Co. Ltd., trading as Hon Hai Technology Group in China and Taiwan and Foxconn internationally, is a Taiwanese multinational electronics contract manufacturer established in 1974 with headquarters in Tucheng District, New Taipei City, Taiwan. In 2021, the company's annual revenue reached 6.83 trillion New Taiwan dollars and was ranked 20th in the 2023 Fortune Global 500. It is the world's largest contract manufacturer of electronics. While headquartered in Taiwan, the company earns the majority of its revenue from assets in China and is one of the largest employers worldwide. Terry Gou is the company founder and former chairman.

<span class="mw-page-title-main">Fair Labor Association</span>

The Fair Labor Association (FLA) is a non-profit collaborative effort of universities, civil society organizations, and businesses.

China Labor Watch (CLW) is a U.S. based non-profit organization founded by labor activist Li Qiang in 2000. It works with governments, nonprofits, businesses and other groups to highlight and put a end to labor abuses involving Chinese workers. It produces investigative reports, classes for Chinese workers, and a hotline for these workers.

<span class="mw-page-title-main">Sweatshop-free</span>

Sweatshop-free or sweat free is a term first used by American Apparel, a famous American clothing brand, which means coercion-free, fair-compensation for the garment workers who manufacture their products. The aim of sweatshop-free wish to ensure that all employees are treated fairly and products are made in good working conditions. Sweatshop-free standards include the right to collective bargaining, non-poverty wages, safe workplaces, back wages, and non-harassment. It has been heavily featured in American Apparel’s advertisements and become a common term in the garment industry.

Pegatron Corporation is a Taiwanese electronics manufacturing company that mainly develops computing, communications and consumer electronics for branded vendors. It also develops, designs and manufactures computer peripherals and components. Pegatron's primary products include notebooks, netbook computers, desktop computers, game consoles, handheld devices, motherboards, video cards and LCD TVs, as well as broadband communication products such as smartphones, set-top boxes and cable modems.

2010 Suzhou workers riot was an incident that occurred on January 15, 2010 in Suzhou, People's Republic of China involving workers dissatisfied with the company's treatment of its employees as well as compensation problems.

<span class="mw-page-title-main">Labor relations in China</span>

As the economy of China has rapidly developed, issues of labor relations have evolved. Prior to this reform, Chinese citizens were only allowed to work where they originated from. Since 1978, when China began labor force reforms, the overwhelming majority of the labor force were either working at State owned enterprises or as farm workers in the rural countryside. However, over time China began to reform and by the late 90's many had moved from the countryside into the cities in hopes of higher paying jobs and more opportunities. The only connection between the countryside and the city soon became that there was a huge floating population connecting them. Independent unions are illegal in China with only the All-China Federation of Trade Unions (ACTFU) permitted to operate. China has been the largest exporter of goods in the world since 2009. Not only that, in 2013 China became the largest trading nation in the world. As China moved away from their planned economy and more towards a market economy the government has brought on many reforms. The aim of this shift in economies was to match the international standards set by the World Trade Organization and other economic entities. The ACTFU that was established to protect the interests of national and local trade unions failed to represent the workers, leading to the 2010 crackdowns. However, these strikes were centered around foreign companies.

<span class="mw-page-title-main">2010 Chinese labour unrest</span> Labour dispute

The 2010 Chinese labour unrest was a series of labour disputes, strike actions, and protests in the south of the People's Republic of China that saw striking workers successfully receive higher pay packages.

The Foxconn suicides were a spate of suicides linked to low pay and brutal working conditions at the Foxconn City industrial park in Shenzhen, China, that occurred alongside several additional suicides at various other Foxconn-owned locations and facilities in mainland China. The series of suicides drew media attention, and employment practices at Foxconn—one of the world's largest contract electronics manufacturers—were investigated by several of its customers, including Apple and Hewlett-Packard (HP).

The 2011 Chengdu Foxconn explosion occurred on May 13, 2011 in Chengdu, Sichuan province, People's Republic of China.

SACOM, or Students and Scholars Against Corporate Misbehaviour is a non-government organization founded in 2005 by a group of students and scholars from tertiary institutions in Hong Kong. SACOM monitors and publicizes the misconducts of multinational corporations through first-hand investigations in supplier factories.

<span class="mw-page-title-main">Xu Lizhi (poet)</span> Chinese poet and factory worker

Xu Lizhi was a Chinese poet and factory worker. Xu worked for Foxconn and attracted media attention after his suicide, after which his friends published his collection of poems.

Science and Technology Park (深圳富士康龙华园区) is a technology park in Longhua Town, Shenzhen, in the south of China, that is Foxconn's largest factory site worldwide. It gained notoriety in 2010 after a spate of suicide attempts, many of them successful, by employees at the Foxconn facilities in the area, totaling 15 attempts that year, 10-13 of which were fatal.

<span class="mw-page-title-main">Apple and unions</span> Apple Inc. related worker organizations and unions

Apple Inc. workers around the globe have been involved in organizing since the 1990s. Apple worker organizations have been made up of retail, corporate, and outsourced workers. Employees have joined trade unions and formed works councils in Australia, France, Germany, Italy, Japan, United Kingdom and the United States.

With over 1 million union members in China, the Foxconn Trade Union is the world's largest trade union, and is also a company union. Hon Hai Precision Industry Co., Ltd., better known as Foxconn, is the largest private employer in China, with 1.4 million employees. In 2006, Foxconn workers established the first trade union in Shenzhen, China.

Luxshare Precision Industry Co. Ltd., also known as Luxshare-ICT, is a Chinese electronic components manufacturer.

<span class="mw-page-title-main">KYE Systems</span> Taiwanese computer peripheral manufacturer

KYE Systems Group, or KYE, an abbreviation of Kung Ying Enterprises, is a Taiwanese computer peripheral manufacturer that designs and manufactures and markets human interface devices such as mice under their own brand, Genius. The company also manufactures on an OEM basis for companies such as HP and Microsoft. The company was founded in 1983 and has opened offices internationally.

References

  1. ↑ Miller, Chance (2021-03-24). "Apple doubling down on supply chain security to prevent leaks, including biometric data collection". 9to5Mac . Retrieved 2023-01-16.
  2. ↑ Musgrove, Mike (2006-06-16). "Sweatshop Conditions at IPod Factory Reported". ISSN   0190-8286 . Retrieved 2023-01-16.
  3. ↑ Kahney, Leander (June 13, 2006), "Judging Apple Sweatshop Charge", Wired
  4. ↑ Dean, Jason. "The Forbidden City of Terry Gou". Wall Street Journal . Retrieved 2023-01-16.
  5. ↑ Morphy, Ericka (January 31, 2008). "Apple, IT and the Specter of Sweatshop Labor". Mac News World. Archived from the original on May 8, 2013. Retrieved May 1, 2010.
  6. 1 2 3 "Apple - Supplier Responsibility" (PDF). Apple Inc. Retrieved February 12, 2015.
  7. ↑ Chen, Brian X. (May 14, 2010). "Workers Plan to Sue iPhone Contractor Over Poisoning". Wired .
  8. ↑ "Apple under fire again for working conditions at Chinese factories". The Guardian . December 19, 2014. Retrieved December 20, 2014.
  9. ↑ "Study Casts Doubts on Apple's Ethical Standards". China Labor Watch . February 24, 2016.
  10. ↑ "Poor Working Conditions Persist at Apple Supplier Pegatron". China Labor Watch . October 22, 2015.
  11. ↑ Roy, Rajesh; Purnell, Newley (March 23, 2017). "Apple to Start Making iPhones in India Over Next Two Months" . The Wall Street Journal . Retrieved May 24, 2017.; Gartenberg, Chaim (March 23, 2017). "Apple reportedly to start manufacturing iPhones in India". The Verge . Retrieved May 24, 2017.
  12. ↑ Roy, Rajesh; Purnell, Newley; Mickle, Tripp (May 17, 2017). "Apple Assembles First iPhones in India" . The Wall Street Journal . Retrieved May 24, 2017.; Mayo, Benjamin (May 17, 2017). "Apple has started production of iPhone SE in India, shipping to customers later in May". 9to5Mac . Retrieved May 24, 2017.
  13. ↑ "Apple starts iPhone 7 production in Bengaluru". livemint.com. April 2, 2019. Retrieved April 2, 2019.
  14. ↑ Xu, Vicky Xiuzhong; Cave, Danielle; Leiboid, James; Munro, Kelsey; Ruser, Nathan (February 2020). "Uyghurs for Sale". Australian Strategic Policy Institute . Archived from the original on 2020-08-24. Retrieved 2021-01-20.
  15. ↑ Albergotti, Reed (November 20, 2020). "Apple is lobbying against a bill aimed at stopping forced labor in China". The Washington Post .
  16. ↑ Yang, Jie; Tilley, Aaron (3 December 2022). "Apple Makes Plans to Move Production Out of China". The Wall Street Journal . Retrieved 4 December 2022.
  17. 1 2 Chan, Jenny; Ngai Pun; Mark Selden (2013). "The politics of global production: Apple, Foxconn and China's new working class". New Technology, Work and Employment. 28 (2): 104–105. doi:10.1111/ntwe.12008. S2CID   154073206.
  18. 1 2 3 Perlin, Ross (2013). "Chinese Workers Foxconned". Dissent . 60 (2): 46–52. doi:10.1353/dss.2013.0024. ISSN   1946-0910.
  19. ↑ Mozur, Paul (December 19, 2012). "Life Inside Foxconn's Facility in Shenzhen". The Wall Street Journal . Retrieved December 21, 2014.
  20. ↑ Carlson, Nicholas (April 7, 2010). "What It's Like To Work In China's Gadget Sweatshops Where Your iPhones And iPads Are Made". Business Insider .
  21. 1 2 "The Foxconn Suicides". The Wall Street Journal . Retrieved 2023-01-16.
  22. 1 2 Dean, Jason; Tsai, Ting-I. (May 27, 2010). "Apple, H-P Investigating Foxconn's Steps to Deal With Suicides". The Wall Street Journal . Retrieved 2023-01-16.
  23. ↑ Carlson, Nichoas (July 27, 2009). "Life Inside A Chinese Gadget Factory". Business Insider .
  24. ↑ Worker commits suicide over misplaced iPhone, Yahoo! News, July 22, 2009, archived from the original on December 10, 2011, retrieved August 1, 2009
  25. ↑ Apple suppliers maintain tight security to avoid leaks: Foxconn said to have 'special status' in China, MacNN, February 17, 2010
  26. ↑ Apple's Recent Strike in Suzhou is Sign of Continued Bad Labor and CSR Practices in China, All Roads Lead to China, January 21, 2010, archived from the original on January 23, 2021, retrieved April 30, 2010
  27. ↑ Moore, Malcolm, Big suppliers in China hold sway over Apple [ permanent dead link ], Express Buzz, March 7, 2010.
  28. ↑ Blodget, Harry (April 7, 2010). "Apple-Supplier Factory Worker Tries To Kill Herself – That's 4 In 4 Weeks". Business Insider .
  29. ↑ "Suicides at Foxconn: Light and death". The Economist . May 27, 2010. Retrieved April 24, 2012.
  30. ↑ Lau, Mimi (December 15, 2010). "Struggle for Foxconn girl who wanted to die". South China Morning Post . Wuhan, Hubei.
  31. ↑ Tam, Fiona (October 11, 2010). "Foxconn factories are labour camps: report". South China Morning Post .
  32. ↑ "Foxconn worker plunges to death at China plant: report". Reuters . November 5, 2010.
  33. ↑ "Foxconn suspends operation at a facility in India". Reuters . 2010-07-27. Retrieved 2023-01-16.
  34. ↑ "Foxconn to raise wages again at China plant". Reuters . 2010-10-01. Retrieved 2023-01-16.
  35. ↑ Buskirk, Eliot Van. "Foxconn Rallies Workers, Leaves Suicide Nets in Place (Updated)". Wired. ISSN   1059-1028 . Retrieved 2023-01-16.
  36. ↑ "Suicides at Foxconn Light and death". The Economist . May 27, 2010. Retrieved December 20, 2014.
  37. ↑ "Chinese Factory asks for 'no suicide' vow". NBC News . May 26, 2010. Retrieved May 26, 2010.
  38. ↑ Armitage, Jim (July 30, 2013). "'Even worse than Foxconn': Apple rocked by child labour claims". The Independent . London.
  39. ↑ Sonnemaker, Tyler (2020-12-31). "Apple knew a supplier was using child labor but took 3 years to fully cut ties, despite the company's promises to hold itself to the 'highest standards,' report says". Business Insider . Retrieved 2022-10-08.
  40. 1 2 Duhigg, Charles (January 25, 2012). "In China, Human Costs Are Built Into an iPad". The New York Times . Retrieved November 20, 2013.
  41. ↑ Litzinger, Ralph (2013). "Labor in China: A New Politics of Struggle". South Atlantic Quarterly . 112 (1): 172–178. doi:10.1215/00382876-1891314.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.