Concerns about wages, working conditions herald change at Foxconn

In recent weeks, Foxconn Technology, a giant Taiwan-based electronics manufacturing services company, has faced unwelcome attention related to working conditions in some of its factories in China, detailed at length by The New York Times. Under pressure, Foxconn announced that it would increase wages at its Chinese factories between 16 and 25 percent and reduce overtime hours.

Taking heat along with Foxconn (a division of Hon Hai) is one of the company’s biggest customers, Apple. The world’s largest company by market cap was thrust into the spotlight along with Foxconn by the New York Times stories and by an explosion in one of Foxconn’s Chinese factories that assembles Apple products, which killed four workers and injured several others.

Apple and other major Foxconn clients like Dell and H-P — along with consumers of their products around the world — face an ethical question: how to balance the desire to keep consumer electronics prices low against the human cost of doing so. Over the last few years labor rights groups have alleged abuses in Foxconn’s Chinese facilities — long hours, low pay, child labor, hazardous working conditions, and employee suicides. Apple and Foxconn have strongly denied the allegations of harsh working conditions, but Apple has conceded that there have been violations of its own code of conduct. Apple has since hired an outside organization to audit the working conditions at the overseas plants where its products are made. The company has also released a list of its suppliers and has called for more scrutiny of its entire supply chain.

Like Apple, Foxconn is very good at what it does. Overseas contract manufacturing is not going away. Neither is global consumer appetite for electronic gizmos, especially those that get faster, smarter, and just plain better as their prices continue to drop. But Apple’s huge run of success brings tighter focus on the issue of working conditions in the offshore factories that make its products. More consumers may view Apple products through the prism of what it might be like to work in one of those factories and ask themselves, “Am I part of the problem, and if so, what do I want to do about it?” Apple and Foxconn will be listening for the answers.

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Photo by Matt Wakeman, used under a Creative Commons license.

James Bryant

James Bryant is a writer and editor for the First Research team at Hoover's.

Read more articles by James Bryant.

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