As Apple prepares for its iPhone 6s launch, how much do you really know about the construction of these tiny gadgets? In manufacturing plants such as Foxconn, unbearable mistreatment of both the physical and mental kind run rampant. “Appalling,” is the only appropriate word to describe the situation. As these conditions worsened, Foxconn was forced to set up nets outside the building in an attempt to prevent the suicide of their employees. How much worse do these situations have to get before something is changed? Is the human rights issue among Chinese workers one that can be amended, or has the system deteriorated too much?
Check out the brand new Young Post today and drop your comments on this issue using #Iamyoung or #theyoungpost.
Foxconn is on an iPhone 6-related hiring spree, but the giant Apple supplier isn’t only looking for human workforce. IT Home reports that Foxconn may rely on some 10,000 robots to make Apple’s 2014 iPhone models, in addition to humans, with each machine capable of building up to 30,000 units per year, for a theoretical total of 300 million iPhones per year.
Oscar-winning documentary director Alex Gibney got considerable media attention earlier this year for his HBO film “Going Clear: Scientology and the Prison of Belief,” which threw open the doors on the bizarre and abusive internal world of L. Ron Hubbard’s celebrity-centric religious denomination. Now Gibney is back with another newsworthy film, “Steve Jobs: The Man in the Machine” — and in case you were wondering, yes, he does see some parallels. But despite some negative pushback from Apple loyalists, this documentary is far from being a hit-piece on the company’s legendary founder, the most beloved entrepreneur of the information age. (In fairness, Jobs was also the only beloved entrepreneur of the information age. Will people light candles in the street when Bill Gates or Mark Zuckerberg departs this mortal coil?)
We ran along the railway,
arriving in some place called ‘the City’
where we trade in our youth, and our muscle.
Finally we have nothing to trade, only a cough
and a skeleton nobody cares about.
Midnight. Everyone is sleeping soundly,
We keep our pair of young wounds open.
These black eyes, can you really lead us to the light?
I swallowed a moon made of iron
They refer to it as a nail
I swallowed this industrial sewage, these unemployment documents
Youth stooped at machines die before their time
I swallowed the hustle and the destitution
Swallowed pedestrian bridges, life covered in rust
I can’t swallow any more
All that I’ve swallowed is now gushing out of my throat
Unfurling on the land of my ancestors
Into a disgraceful poem.
I want to touch the sky, feel that blueness so light
But I can’t do any of this, so I’m leaving this world
Everyone who’s heard of me
Shouldn’t be surprised at my leaving
Even less should you sigh or grieve
I was fine when I came, and fine when I left.
On the last day of September, a 24-year-old migrant worker in the southern Chinese city of Shenzhen killed himself. Xu Lizhi jumped out of a window of a residential dormitory run by his employer, Foxconn, the huge electronics manufacturing company with a million-strong workforce that makes the majority of the world’s Apple iPhones.
According to accounts from his friends, Xu tried multiple times to leave his job at Foxconn. Applications for positions in libraries and book stores in Shenzhen proved unsuccessful. He also was turned down for a job at an internal library within Foxconn’s compound. Xu moved away for a spell to be with his girlfriend in the city of Suzhou, but that relationship fell through, and he eventually made his way back to Shenzhen and Foxconn.
Xu is not the only Foxconn employee to commit suicide: in 2010, a spate of suicides put the international spotlight on the Taiwanese-run company, which is China’s biggest private employer. Foxconn has since taken effortsto improve working conditions and dormitories. There have been 18 attempted suicides of Foxconn employees in the past five years.
The innovation trap: How the iphone isn’t saving America.
By Martin Hart-Landsberg, PhD
The US economy faces a number of challenges—among them a lack of job creation and an ever-growing trade deficit. Many policy-makers believe that encouraging business innovation is the best response to these particular challenges. Sounds plausible but experience suggests otherwise.
The best example of why simply encouraging business innovation is not the answer for our employment and trade problems is Apple and its iPhone.
The iPhone was introduced in 2007 and has been incredible successful. U.S. sales soared from 3 million units in 2007 to over 11 million in 2009. Global sales topped 25 million in 2009.
While the iPhone is designed and marketed by Apple, almost all the phone’s components are produced by foreign companies operating outside the United States. These components are then shipped to China where Foxconn, a Taiwanese company, oversees their assembly and their export to the United States and other countries. As a result, the iPhone generates few jobs in the United States.
Two economists, in an Asian Development Bank working paper, examined the iPhone 3G production process in some detail. The table below, taken from their study, highlights the main suppliers and the costs of the components they produce for a single phone. Most of the components are supplied by Japanese, South Korean and German firms, although there are also some U.S. suppliers (although who knows where they actually produce their compnents).
The total component cost of an iPhone in 2009 was $172.46. Workers in China assemble the iPhone, but because their wages are low the assembly cost per phone (labeled manufacturing costs in the table below) is quite small, only $6.50 a phone. The total production cost per phone is $178.96.
Because the iPhone is assembled in China all sales in the U.S. mean an increase in Chinese exports (even though the phone is largely composed of inputs produced outside of China) and an increase in U.S. imports. In 2009, China exported more than $2 billion worth of iPhones to the United States. Thus, the iPhone, because of the Apple’s production strategy, also adds to the U.S. trade deficit.
Apple is not alone in embracing China as its production base. China is now the world’s largest exporter of manufactured goods. And, as the chart below shows, the share of Chinese exports that are labled high technology is growing. This trend has encouraged many analysts to claim that the U.S. is now locked in fierce economic competition with China.
However, as we see next, more than 80% of China’s high technology exports are actually produced by foreign companies operating in China. Moreover, these foreign companies have significantly increased their control over this production. In 2002 foreign owned firms that were 100% foreign owned (which means that they had no Chinese partner) accounted for only 55% of Chinese high technology exports. In 2009 they accounted for 68%.
Why do so many transnational corporations choose to locate production in China? The answer is obvious: profits. Apple again serves as a good example. The table below, taken from the Asian Development Bank working paper cited above, shows Apple’s profit-margin on the iPhone. In 2009 it was a whopping big 64%.
Struck by the size of Apple’s profit-margin, the authors of the Asian Development working paper considered whether the iPhone could reasonably be made in the United States. As they note:
The role of the PRC in the production chain of iPhones is primarily the assembly of all parts and components into the final product for re-shipment abroad. The skills and equipment required for the assembly are very basic and there is no doubt that American workers and firms are capable of assembling iPhones in the US. If all iPhones were assembled in the US, the US$1.9 billion trade deficit in iPhone trade with PRC would not exist. Moreover, 11.4 million units of iPhone sold in the non-US market in 2009 would add US$5.7 billion to US exports.
For the sake of discussion, they assumed that assembly line wages in the U.S. are ten times higher than in China. Given that Chinese production workers earn roughly $1 an hour, that is not an unreasonable assumption. The higher wages would mean that the total assembly cost per phone would rsie to $65 and the total manufacturing cost would approach $238. If Apple continued to sell the iPhone for $500, the company would still earn a very respectable 50% profit margin.
Moreover, as the authors point out:
In this hypothetical scenario, iPhones, the high-tech product invented by the U.S. company, would contribute to U.S. exports and the reduction of the U.S. trade deficit, not only with the PRC, but also with the rest of world. More importantly, Apple created jobs for U.S. low skilled workers; those who could not be the software engineers needed by Apple. Giving up a small portion of profits and sharing them with low skilled U.S. workers by Apple would be a more effective way [than depreciation of the exchange rate] to reduce the U.S. trade deficit and create jobs in the United States.
Of course, shifting production to the United States would mean that Apple would earn less money and there is little reason to believe that the company is prepared to sacrifice its profits for the good of the country. If we want to tackle our employment and trade problems were are going to have to do more than promote more attractive conditions for business.
Foxconn to speed up 'robot army' deployment; 20,000 robots already in its factories
June 26, 2013, 10:20 AM — Manufacturing giant Foxconn Technology Group is on track with its goal to a create a “million robot army”, and already has 20,000 robotic machines in its factories, said the company’s CEO Terry Gou on Wednesday.
Workers’ wages in China are rising, and so the company’s research in robots and automation has to catch up, Gou said, while speaking at the company’s annual shareholder’s meeting in Taipei. “We have over 1 million workers. In the future we will add 1 million robotic workers,” he said. “Our [human] workers will then become technicians and engineers.”
No more Made in China iPhones? Japan wants to take over iPhone Manufacturing
According to a report from Digitimes, Japanese manufacturers are currently working on making a concerted effort to secure more orders from Apple, which currently deals mainly with companies based in Taiwan and China.
Apple is without question Foxconn’s largest and most important client. The China-based electronics manufacturing giant has seen its revenue skyrocket since it began building iPhones and iPads for Apple, and 2014 will seemingly be the biggest year yet for the iPhone, with two new models set to debut and as many as 80 million units on order.
Eva Dou on the news that Apple is shifting more of its manufacturing business to Foxconn rival Pegatron:
Executive changes at Apple have also made a difference. Mr. Jobs had been easier at forgiving his favorite manufacturing partner, according to several people familiar with the relationship. Now, instead of relying on the uniquely close partnership between “two leaders with a hero complex"—as one of the people said—Mr. Cook is putting a greater premium on risk diversification, they said.
How many times have you heard that Steve Jobs was more "forgiving” than Tim Cook? Not a lot.
Pegatron Corp., named after the flying horse Pegasus, will be the primary assembler of a low-cost iPhone expected to be offered later this year.
Why am I way more excited about the Pegasus name-drop than the low-cost iPhone name-drop?
It is important to know your boss, or you might land in trouble.
Gou Tai-ming, the Taiwanese tycoon and chairman of Foxconn, was cursed by his employees when he tried to stop them from smoking at the company’s factory in the southern Chinese city of Shenzhen.
Recent video clips circulating on social media show Gou, also known as Terry Gou, asking the unnamed employees to extinguish their cigarettes at the gate of a dining hall where smoking is prohibited.
But Gou’s requests were rejected.
The employees, who apparently failed to recognize him, then asked rudely, “Who are you?”
“It’s none of your *** business,” they said using expletive words.
A furious Gou then warned them of dismissal.
“If they don’t ‘fix’ you, I will do it,” said Gou in anger, as shown in a seven-second video footage. “Foxconn doesn’t need workers like you,” he added.
According to media reports in Taiwan, Gou later urged all his staff to obey the company’s rules and regulations. There have also been tighter inspections to make sure that employees smoke at designated places.
The case has also led to heated discussion on China’s Twitter-like Sina Weibo.
"This is the culture in the manufacturing industry. They pay extreme attention to fire safety. I support Gou!” said a user named @TOM-Qiangzi-Summer.
But there are altering opinions.
"Fire them because they cursed you? This is very mean,” said another user named @TTshenshi.
Foxconn is one of the world’s largest contract electronics manufacturers. The company’s factory in Shenzhen is also the headquarters of its operations in the Chinese mainland. For safety concerns, Foxconn has banned smoking around its premise, including the dining hall area.
China has initiated tougher tobacco control since last year. The capital city of Beijing, for example, rolled out a blanket smoking ban in June covering all indoor public places, workplaces and public transportation – the strictest of its kind in China.