Apple Inc and its main contract manufacturing Foxconn agreed to tackle violations of conditions among the 1.2 million workers assembling iPhones and iPads in a landmark decision that could change the way Western companies do business in China.
Taiwan's Foxconn Technology Group, whose subsidiary Hon Hai Precision Industry assembles Apple devices in factories in China, will hire tens of thousands of new workers, eliminate illegal overtime, improve safety protocols and upgrade workers' housing and other amenities.
It is a response to one of the largest investigations ever conducted of a US company's operations outside of America. Apple had agreed to the probe by the independent Fair Labour Association (FLA) to stem a crescendo of criticism that its products were built on the backs of mistreated Chinese workers. The association, in disclosing its findings from a survey of three Foxconn plants and over 35,000 workers, said it had unearthed multiple violations of labour law, including extreme hours and unpaid overtime.
FLA President Auret van Heerden expects the agreement between Apple, the world's most valuable listed company, and Foxconn, which supplies 50 percent of the world's consumer electronics, to have far reaching affects. "Apple and Foxconn are obviously the two biggest players in this sector," he said in an interview. "Since they're teaming up to drive this change, I really do think they set the bar for the rest of the sector."
That could affect brand names that have contracts with the Taiwanese company, including Dell Inc, Hewlett-Packard , Amazon.com Inc, Motorola Mobility Holdings, Nokia Oyj and Sony Corp. The agreement is a sign of the increasing power of Chinese workers to command higher wages given increasing prices in China, and an ageing workforce that has led to labour shortages. "Foxconn is proposing this better deal," said van Heerden. "Their competitors will be obliged to offer a similar package just in order to get enough workers."
Under the agreement, Foxconn said it will reduce working hours to 49 per week, including overtime, while keeping total compensation for workers at its current level. The FLA audit found workers in the three factories put in more than 60 hours per week on average during peak production periods. To keep up with demand, Foxconn will hire tens of thousands of additional workers and build more housing and canteens.
Comments
Comments are closed for this article.