Apple Is Making Life Terrible In Its Factories (theregister.co.uk)

An anonymous reader writes: Pressure from Apple to lower costs is driving worsening conditions for workers at the company's manufacturing partners.
This according to watchdog group China Labor Watch, which says that under CEO Tim Cook, the Cupertino giant has asked the companies that assemble its products to cut their own costs, and those demands have led them to cut back on worker pay and factory conditions. Specifically, the group reports that Pegatron has been passing on financial pressures from Apple by committing multiple violations of Chinese labor laws on fair pay and workplace safety.
"Working conditions are terrible, and workers are subject to terrible treatment," China Labor Watch writes. "Currently, Apple's profits are declining, and the effects of this decline have been passed on to suppliers. To mitigate the impact, Pegatron has taken some covert measures to exploit workers."

Comments

see what the Union free work place get's you!

[Joe_Dragon]

see what the Union free work place get's you!

Re:see what the Union free work place get's you!

[unixisc]

But this is Communist China, which should be a workers' paradise!!! Say it ain't so!

Re:see what the Union free work place get's you!

[hey!]

Where independent unions are banned.

Basically when China and Russia gave up on socialism, they created a version of capitalism in the image of what they imagined capitalism to be; not the kind of liberal society you find in advanced Western democracies with their regulated market economies and worker's rights guarantees.

Re: see what the Union free work place get's you!

[chadenright]

Having a fiduciary duty to make a profit does not extend to or excuse a violation of law, or asking others to violate law. That's what you "fiduciary duty" people seem not to get; that duty does not supercede law, ethics or morality in any way. Stop making excuses for the sociopaths making the world a worse place for your kids to live, and stop holding their actions up as a paradigm that you and everyone else should follow. Seriously. Just stop.

Re: see what the Union free work place get's you!

[tomhath]

stop holding their actions up as a paradigm that you and everyone else should follow.

Can you point out in GP's post where I can find the part about "making excuses"?

He was mocking the idea that a union would help in a country that's supposed to be socialist (yeah, we all know that real socialism doesn't exist anywhere).

Re: see what the Union free work place get's you!

[sjames]

You are assuming we exist to serve an economy. But an economy isn't a living thing and that's not how it works. An economy has no rights.

The economy exists to serve the people. It has no other justification.

Not all coercion is in the form of physical force. Work for slave wages or starve, for example, is a form of coercion.

Unions are a worker's way of reminding management that without workers, they would have to actually labor themselves or starve.

Re:see what the Union free work place get's you!

[Dorianny]

Where independent unions are banned.

Basically when China and Russia gave up on socialism, they created a version of capitalism in the image of what they imagined capitalism to be; not the kind of liberal society you find in advanced Western democracies with their regulated market economies and worker's rights guarantees.

Actually the Chineese Capitalist system looks remarkably similar to the American "Gilded Age." The horrible exploitation of labor during this period is what gave rise to Unions and the "Progressive Era." How things are going to play out with China's single party system is anybody's guess but so far the Ruling party has shown little tolerance for Organized labor. Russia is a very different story, their economy is based largely on exploitation of natural resources, mostly oil. As John McCain put it "Russia is a gas station masquerading as a country". They have little on the way of private Capital investment, the linchpin of a Capitalist system

Re: see what the Union free work place get's you!

[OhPlz]

The only thing a labor union would do here is to drive the business elsewhere. Either some other Chinese company would get the work, or they'd find someplace outside of China with even fewer legal protections. The old school checks and balances don't work with global mega-corps.

Re: see what the Union free work place get's you!

[Anonymous Coward]

There is no fiduciary duty to make a profit, this is a myth that keeps on getting told.

Re: see what the Union free work place get's you!

[Anonymous Coward]

"unless they are being coerced"

Funny how much like coercion an empty belly is.

Re:see what the Union free work place get's you!

[allcoolnameswheretak]

Really one of the big ironies of history is that the capitalist economies have better working conditions, a healthier environment and a broader middle-class than any communist state has ever had. And the only reason why China is doing comparatively well at the moment is because they have embraced capitalism.
Where does this leave us? Marx and Engels == complete fail?

Of course you can always argue that true communism was never actually implemented, as communist states somehow degenerate into dictatorial regimes that suppress freedoms. But perhaps the very ideal of communism is doomed to fail because something as intricately human as free trade and a market economy can only be abolished by means of suppression.

Re: see what the Union free work place get's you!

[Anonymous Coward]

You put the "douche" back in fiduciary.

Re:see what the Union free work place get's you!

[ShanghaiBill]

Where independent unions are banned.

Independent unions are not banned in China. They were before 2008, but labor rights in China have changed a lot since then. Most importantly, unions now have the right to declare strikes against private companies (but not at SOEs). These strikes are generally tolerated by the government, especially at foreign owned companies. Pegatron is a foreign company (Taiwanese).

I am skeptical about the claims made in TFA for several reasons. First, in the past, these sorts of claims have often turned out to be fabricated. Second, the only actual evidence is some photos of employees drying their clothes by hanging them up. News flash: 90% of the world dries clothes that way. Third, most labor centers in China, including Shenzhen, Shanghai, etc. are suffering from labor shortages, and if conditions at Pegatron were really bad, the employees could cross the street and get a better job in about 10 minutes.

Re:see what the Union free work place get's you!

[Anonymous Coward]

How things are going to play out with China's single party system is anybody's guess but so far the Ruling party has shown little tolerance for Organized labor.

And they will continue to quash it hard. They see how unions in the west are often political organizations as well and that the most well-meaning of unions eventually become political machines. Obviously the CCP is having none of that! Even if the politics could be kept out of it, the idea of a large organization of people is reprehensible to the CCP. Turns out that if people are unified and they start to disagree with the administration's policies, unrest and upheaval are not far away. The CCP has one mission: keep the CCP in power.

Xi's administration has made a public crusade out of stamping out corruption but while doing so, he has tightened the screws on control. Censorship has been worsening since my first visit in 2011--and that's impressive considering how bad it was the first time. This year, I found it utterly unbearable.

Re:see what the Union free work place get's you!

[unixisc]

Somehow, it's hard to argue that Communist China, where companies are allowed to operate at the whims of the Beijing Regime, is 'capitalist'. Just that they've gone from Communist to a party controlled oligarchy, where companies can do what they like, as long as they grease the party bosses in Beijing. Maybe Tim Cook should hook up w/ Kim Jong Un and see if they can build their next factory in Pyongyang? Since his main enemy is South Korea based Samsung, the Korean standoff can get replicated in the mobile world as well

Re: see what the Union free work place get's you!

[Anonymous Coward]

As said above: There is no such duty to make a profit! Certainly not at the "expenses" entailed in this article.

Re:see what the Union free work place get's you!

[tomkost]

That's a great comment, especially the last sentence. I've not thought of it that way before, but spot on!

Re:see what the Union free work place get's you!

[SuricouRaven]

Perhaps both communism and free-market capitalism are only abstract ideals that can never be fully demonstrated in the real world?

Re:see what the Union free work place get's you!

[Anonymous Coward]

not the kind of liberal society you find in advanced Western democracies...

You probably meant: "in fairy tales".

...with their regulated market economies and worker's rights guarantees.

Do you mean those that have been steadily wiped out over the last 30 years in most western countries as a result of the fall of the USSR, globalization, lower tariffs, the WTO, privatizations, etc...? I remember when in the '80s in my country salaries were mandated to be linked to inflation, no company could even dream to outsource production otherwise it would pay a 50% tariff, layoffs were heavily limited by the "just cause" principle, the rich paid a 70% tax rate and could not export capitals, healthcare was entirely public... ah, good times.

Re: see what the Union free work place get's you!

[Joce640k]

Apple should be negotiating the best rates it's from its suppliers. In fact, being publicly traded, it would be unethical not to.

No it fucking wouldn't.

You don't actually know what "ethics" are, do you?

PS: Apple also has a responsibility to maintain a good public image. Bad public image affects sales.

Re: see what the Union free work place get's you!

[Anonymous Coward]

When the employers are colluding you can't "leave" as there's nowhere better to go.

Unions are the solution in that case as they (when successful) equalize the game. When labor colludes and says "we won't work for you until you do X" the employers have to make concessions or shut down, as they can't hire "somebody else" if the union is successful at uniting the pool of qualified labor on the issue. Juts like they employee can't go 'somewhere else" if everywhere else is juts as bad.

When unions fail, it's usually because enough people are willing to put up with the employer's shit that they can't leverage a strong bargaining position, because the cost of the demands is high enough that the employer can move the factory more cheaply than resolve the issue, or some otehr party is intimidating the union preventing it from gaining adequate support.

Re:see what the Union free work place get's you!

[nickmalthus]

There are a variety of online articles that contradict your claim that independent labor unions are allowed in China such as this one , this one, and this one. Perhaps Chinese labor unions are defined in law but protections are not enforced in practice like their environmental regulations.

Given Chinese censorship of news and social media it is difficult for anyone including Chinese citizens to know exactly what takes place in that country. I am more inclined to believe the accusations of dissidents than the wealthy authoritarian party's propaganda.

Re: see what the Union free work place get's you!

[nickmalthus]

That is exactly why the globalist want to ratify the TPP, TTIP, and TISA so that their corporate rights are protected everywhere but local labor rights can be litigated out of existence.

Re: see what the Union free work place get's you!

[DaHat]

Bigger Q: Why is it we tend mostly to only hear outrage stories about factories producing Apple goods?

Are the factories building Google, Samsung & Microsoft devices so much better? Or are they doing what it takes not to tick off the government powers that be?

Re: see what the Union free work place get's you!

[Dare nMc]

> The only thing a labor union would do here is to drive the business elsewhere

Sorry, you would have to give some reason to back that up. This was a short term push, exactly what a union typically has rules to avoid. If the factory wasn't competitive before this push to lower costs, then it would already have lost the work. When they attempt to cut corners in safety for workers in a competitive factory, union rules and the threat of a walkout absolutely would stop that. Moving the product to a new factory would incur significant costs, and a short term loss in productivity. So with a union trying to lower short term costs at the costs of workers wouldn't work. Without a union, it takes time for workers to find other jobs. So even if no one would take this job, it would take time for the workers leaving to restore protections.
These are not 0 skill jobs, they have to teach skills that take time to learn, and many take specialties, that not everyone can do, due to good sight, good hand eye coordination, often small strong hands.
Also the labor share in China doesn't appear to be on par with the rest of the world. Since labor is 2-3% of costs of manufacturing in china, retooling a factory is going to be more costly than doubling the labor wage.

Re:see what the Union free work place get's you!

[unixisc]

Communism would probably work fine in a country that was a combination of rich and underpopulated, like some of the Gulf countries. Say, if Kuwait was Communist, nothing would happen - they'd have enough money to cover everyone even as implemented by Lenin and Trotsky

Re: see what the Union free work place get's you!

[ShanghaiBill]

Are the factories building Google, Samsung & Microsoft devices so much better?

Pegatron is a contract manufacturer, and the Apple, Google, Samsung & Microsoft devices are all made in the same factories by the same workers.

Re:see what the Union free work place get's you!

[ShanghaiBill]

There are a variety of online articles that contradict your claim that independent labor unions are allowed in China

The ACFTU is a government run umbrella organization for labor unions in China. But unions do NOT have to join. Even for unions that do join, they have the right to independently declare strikes. The links you provide point out (correctly) that unions in China face big challenges. How is that different than America, where union membership has dramatically declined, and service workers are proving difficult to organize?

These factories tend to offer better jobs than any alternative available, and many workers come from the countryside, work for a few years to build up a nest egg, and then return home to their families. The transient nature of the workforce means they aren't willing to sacrifice now for future gains.

I am more inclined to believe the accusations of dissidents than the wealthy authoritarian party's propaganda.

These accusations do NOT come from Chinese dissidents. China Labor Watch is an American organization based in New York.

Re:see what the Union free work place get's you!

[danbert8]

Communism can only succeed in a world where everyone is selfless and will work for the benefits of others. When people act in their own self interest for their own profit, capitalism is far more efficient and a better system to minimize poverty and suffering.

Re:see what the Union free work place get's you!

[Anonymous Coward]

You kinda haven't looked at places in the US (or elsewhere in the first world) where factories have closed bc the owners are chasing cheaper labor.

They're hellholes, without hope.

And the capitalists look at the long-term unemployed in gutted towns and call them 'losers' and 'leeches' for needing government services rather than understanding that the system that employed and abandoned them in large numbers distorted the local economy to the point where the loss of jobs destroys an entire community.

Re: see what the Union free work place get's you!

[OhPlz]

Companies aren't going to look at the costs of resolving each grievance. That's not the problem. The real issue is that unions pose an unknown risk in terms of production and cost. If workers do walk out and the production process comes to a halt, that creates a long list of problems for the company. That's why some companies shut down operations when a union gets voted in. It's not worth the risk to them versus moving the factory elsewhere. Those costs in moving production can be reduced by getting other countries to compete for the business. They'll get lured in with tax cuts or other incentives. Either that or they'll automate the work. The US serves as a perfect example of how ridiculous union demands can get over time. They served a purpose in the beginning, but become a liability to the point where companies sent the work to places like China. Yes, the unions weren't the only reason for the move, but they certainly had a role in it.

Re:see what the Union free work place get's you!

[ShanghaiBill]

Perhaps both communism and free-market capitalism are only abstract ideals that can never be fully demonstrated in the real world?

Absolute zero Kelvin is also an abstract idea. But that doesn't mean Minnesota isn't colder than Florida. In the real world, there is no country that is completely capitalist, and none that are completely communist. But if you look at the top three capitalist countries based on the ease of starting and running a private business, they are Singapore, New Zealand, and Denmark. If you look at the three most communist, they are Cuba, North Korea, and Eritrea. Where would you rather live?

Re: see what the Union free work place get's you!

[UnderCoverPenguin]

The economy exists to serve the people.

Which people?

More and more, it's the 0.1% at the top.

Re:see what the Union free work place get's you!

[tnk1]

Maybe Tim Cook should hook up w/ Kim Jong Un and see if they can build their next factory in Pyongyang? Since his main enemy is South Korea based Samsung, the Korean standoff can get replicated in the mobile world as well

He would, except for those pesky sanctions that would cause him to be thrown in jail if he tried.

North Korea could potentially be a rather good place to find cheap labor.

Problem is... it may eventually be cheaper to buy and operate robots than to actually try and train up North Koreans. Considering their current situation, they're mostly uneducated technically, although if Apple needs a ballistic missile built, they may be a little more up to the task.

Re:see what the Union free work place get's you!

[tnk1]

Although I agree with the notion that they're both probably unattainable goals in reality, they don't necessarily reflect two polar opposites where the middle of the two actually is better.

The way this looks to me, we keep coming down to which large organization we want to control things. Some people want it to be the government, some people think corporations are better.

I admit in their "pure forms", both communism and the free market are supposed to dissolve into individual freedom, but no one who has ever tried either one of those has even attempted to make that concept a reality. The reason for this is simple. Someone is always trying to gain advantage by forming an organization to gain control of resources. The capitalists do it in the name of "efficiency" and the communists and other revolutionaries do it in favor of "guiding the population" and more practically, "protecting from counter-revolutionary forces".

Admittedly, there is a certain efficiency in forming an organization, and if you could force the organization to complete a single goal, and then release the resources and dividends instead of self-perpetuating, it could be worth it. But this never happens. The end of the Party and the dissolution of the State into the Worker's Paradise was never going to happen due to self-interest and limited resources. If everyone had as much energy and resources as they could want, this wouldn't be a problem, but that's never going to happen.

Re:see what the Union free work place get's you!

[Areyoukiddingme]

But perhaps the very ideal of communism is doomed to fail because something as intricately human as free trade and a market economy can only be abolished by means of suppression.

Marxism depends on the presence of super-abundance. Marx was anticipating the time when machines would take over essentially all human labor. He was well ahead of his time, and he's still somewhat ahead of his time even today, all discussions about UBI to the contrary.

Regardless, the necessary and sufficient conditions for Marxism have never existed. "Free trade" and a market economy are mechanisms that exist for the sole purpose of coping with scarcity, which they do with varying degrees of success. Marxism is a proposal for dealing with post-scarcity. We had better hope it gets adopted when post-scarcity actually materializes, or there will be trouble. (Though if any species could manage to impose artificial scarcity on a post-scarcity technological base, it would be humans.)

Re:see what the Union free work place get's you!

[currently_awake]

So they re-created a capitalistic society, as envisioned (and described) by Karl Marx? It's ironic that a communist country (created to escape the evils of capitalism) would so perfectly re-create the society their country was created to escape. It would be like the US becoming a feudal theocracy.

Re: see what the Union free work place get's you!

[sjames]

It is supposed to be all of the people, but yes. It has been increasingly perverted to serve only the very wealthiest.

Re:see what the Union free work place get's you!

[currently_awake]

Capitalist economies have better working conditions because we export the low value jobs to other places. We have a healthier environment because we export the dirty industries to other places.

Re: see what the Union free work place get's you!

[DaHat]

Correct, though Pegatron is by no means the only contract manufacturer used over there, nor by the companies mentioned.. yet it's only Apple built products we hear about. Why?

Re:see what the Union free work place get's you!

[HornWumpus]

No, the point is they created a caricature of a capitalist society as envisioned and described by Karl Marx.

Marx didn't understand capitalism, at all. Neither do the people in charge of China. It will bite them in the ass.

Re: see what the Union free work place get's you!

[ShanghaiBill]

yet it's only Apple built products we hear about. Why?

People buy devices from Samsung, Microsoft, Dell, etc. for pragmatic reasons, and aren't much concerned about how they are made. Many people buy Apple products for the image and status they project. So people care more about the Apple brand being besmirched. If "Apple" was replaced by "Samsung" this story would have never been posted on Slashdot, because no one would care.

Re: see what the Union free work place get's you!

[HornWumpus]

The Chinese desperately getting their capital out of China isn't a testament to their government's abilities.

We're getting close to the end game, which will be ugly for everyone, but mostly for China.

Re:see what the Union free work place get's you!

[khallow]

The ACFTU is a government run umbrella organization for labor unions in China. But unions do NOT have to join. Even for unions that do join, they have the right to independently declare strikes. The links you provide point out (correctly) that unions in China face big challenges. How is that different than America, where union membership has dramatically declined, and service workers are proving difficult to organize?

One huge difference is that you can get thrown in jail for crossing someone. There's no equivalence here between the Chinese and US labor situations.

Re:see what the Union free work place get's you!

[ShanghaiBill]

One huge difference is that you can get thrown in jail for crossing someone.

I assume you are referring to the teachers arrested and jailed last month in Minnesota. But similar things have happened in China, so the situation is not as different as you think.

Re: see what the Union free work place get's you!

[Dare nMc]

I have heard the right wing crap before. Basically comes down to thinking workers are so stupid they don't realize they wont have a job if they bankrupt the company. In reality, since they workers have the bigger vested interest in than a company than is about stockholders, or millionaires not working at the factory every day. In those cases, the union typically hires, and knows more about the company, and what it takes to keep it running efficiently than the board.
Union contracts also usually give more stability, not less. You set a cost, and expectations. They have set times to negotiate changes, and know better the local pay scales. It is true, companies that think of employees as necessary evils to attempt to screw over, are generally the ones with unions you hear about. A well run and managed company will have no issues with a union. If the unions run the others out of business faster, it's all good, in my book.

> They served a purpose in the beginning
Since China is in the state where they do not have trustworthy government and regulations, it is exactly like those days now. The people need a voice that can voice the issues and suggest improvements, rather than just quitting or just ending up dead. As the workers are the ones who know best what is happening in the factory, if you can get them involved in a way they can have someone they can trust to talk to, and voice grievances through, it will make everyone's lives better.

A few bad Unions do happen, and I am not happy that most unions in the US are getting more focused on taking care of retirees than actual workers. But I have never seen them kill a company, other than one that was destined to fail anyway.

Re: see what the Union free work place get's you!

[currently_awake]

Possibly you forget the sweatshop stories about Nike? These things tend to go in cycles, and the press (mostly owned and operated by rich friends of the government) really doesn't care to report on more of the same.

Re:see what the Union free work place get's you!

[khallow]

I assume you are referring to the teachers arrested and jailed last month in Minnesota.

Again with the false equivalence. Let's read that story in question.

Minneapolis police reported 21 protesters were arrested willingly after blocking Eighth Street at Nicollet Mall and refusing orders to disperse.

When I said "cross someone", I didn't mean block a road. And what were the consequences?

All 21 of the protesters arrested in Minneapolis were ticketed and released, according to the St. Paul Federation of Teachers.

Re:see what the Union free work place get's you!

[ShanghaiBill]

Can you provide a specific example of someone in China jailed for "crossing someone" as a result of union activity?

Overall, American citizens are more than four times as likely to be incarcerated by their government as Chinese citizens.

Re: see what the Union free work place get's you!

[ctmurray]

It "pays" to bash Apple. There are entire funds/people who make a living seeding the news with stories like this, and then they short the stock. Yes all the factories for all the hardware vendors are a difficult life, compared to our standards. But these are good jobs in China. Apple has efforts, maybe meager ones - who is to say, to insist upon better conditions with their suppliers.

Re: see what the Union free work place get's you!

[OhPlz]

Investors have investments in the company. Everyone else just works there. What you're saying probably sounds great in front of a roomful of union members or people thinking about unionizing, but it doesn't really help solve anything. Unions do not provide stability. When a union strikes, the company grinds to a halt. If that company tries to service its customers by bringing in replacement workers, the union does everything possible to interfere, with violence on occasion. I used to work in telecom and I always knew when the "talks broke down" because the circuits would start failing. Those oh-so-vested workers would go out and sabotage the network as they walked off their jobs knowing the entire community would be harmed, all to gain an unfair advantage in their hostage negotiations. Those strikes can go on for a long, long time, regardless of how well the company is run. You're dishonest if you're suggesting that only the leadership of a company can be greedy. Unions go bad over time. They use thuggish behavior and the threat of strikes to make increasingly absurd demands. The workers end up no less greedy than the management, perhaps more so because they're entirely willing to let the company fail.

China has its share of problems as does any developing nation. The problem is that they're caught in a catch-22 situation. When their protections of workers, students, and the environment catch up with those of developed nations, the cost of doing business there will have caught up with developed nations. Once that happens, they're going to need some way of convincing companies to stay, or have companies of their own to take up the slack. The global corps will just move on to the next low-cost-country, or bring the work back to its origins if there's not enough of a savings to make it worth moving elsewhere. I doubt that any company's leadership at any point in history has ever said "hey, I'm thrilled that our workers just unionized because this is going to make everything so much better."

Re:see what the Union free work place get's you!

[zedaroca]

Capitalist economies have better working conditions, a healthier environment and a broader middle-class than any communist state has ever had

The third world is capitalist. The first and the third are capitalists, the second was "communist". That is the nature of capitalism, the small top do well and the large bottom doesn't. Also, Communist countries weren't supposed to have a middle-class.

1. Have a look in the working conditions in South Asia (don't forget India), Africa and South America;
2. Consider what you said that China is just a dictatorial regime and that now they are in fact capitalists;
3. Now count the true size of the capitalists middle-class and reevaluate the capitalists working conditions and environment.

Chinese history is pretty hard. They were worst before the revolution, got much better after, and are getting much better with this capitalist dictatorship. The "bad" working conditions that Chinese are enduring now aren't much different than what always happened in the other South Asian countries. They have been in a path of conditions improvement.

Since they were so far behind, and there was an obvious improvement (specially in illiteracy and starvation), I don't think its fair to compare where they got in the relatively short Communist time with where the rich capitalists of the first world were after centuries of exploiting the third world and slave labor (and continuing to do so). Plus, they had to reorganize the country after being seriously involved in WWII (actually the 2 Sino Japanese war).

Re:see what the Union free work place get's you!

[khallow]

Several incidents are describe in this story:

1) workers receiving 6 to 8 months in prison for protesting unpaid wages.

2) Arbitrary detention of several labor leaders in Guangdong province.

3) Wu Guijun, labor activist detained for more than a year for "gathering a crowd to disrupt traffic", the same activity that you cited in your original post which lead to a short term detention and fine.

Re: see what the Union free work place get's you!

[Dare nMc]

> I doubt that any company's leadership at any point in history has ever said "hey, I'm thrilled that our workers just unionized because this is going to make everything so much better."

I agree, find me a manager that admits their sub par, and then I can show you a manager that would appreciate a unions help.

>Unions do not provide stability. When a union strikes, the company grinds to a halt.

That is anecdotal at best. If you purely take the one point in time when both management and the union broke down, and apply that one point in time and decide that happens at every shop constantly. I know I saw the other side, I worked as a union guy, and saw a company bought out by a company who had management that knew it all, so much they opened a new factory in a new state for tax breaks and were pulling machines from the one I was at and close it over time. They had no idea how to make tires and it immediately failed, never making a sale-able product with the same machines working perfectly before moved. The only reason they had a profit was because the union guys were running the factory, fixing machines, and making improvements together.

Re: see what the Union free work place get's you!

[DaHat]

You are suggesting then that not enough buyers of Samsung (the #1 smartphone maker at present), Google (the #1 search & email provider) & Microsoft (the #1 desktop & corporate OS provider) aren't socially conscious/vocal enough to care where their devices come from... but that the socially conscious/vocal ones are buying Apple... and rather than saying "screw these profit hungry scum-bags! I'm going to buy a certified 100% free-trade, locally sourced organic smartphone!"

I really don't think it's that complicated... I can't help but think that Apple hasn't done as good of a job of greasing the right palms the way their competitors seem to have to largely avoid similar stories.

Re:see what the Union free work place get's you!

[spazzmo]

For the moment, they are all being eroded away in the name of globalism.

Re: see what the Union free work place get's you!

[OhPlz]

You're using an anecdote to counter my anecdote? Strikes happen. For a while, you could use UPS's strikes to tell what time of the year it was. Verizon was the same way, and Fairpoint is now carrying on that tradition. Our local school teachers even threatened and prepared for a strike even though it's forbidden by law in my state. The supermarket's warehouse people went on strike and were publicly ridiculed at the end of the supermarket's parking lot by the people trying to get food. Strikes are hardly rare. These are things that I've seen in my town firsthand. I was even a member of the AFL-CIO at one point, I feel fortunate to have left it for greener pastures.

I've been bullied by union labor in the past so I'm not terribly keen on hearing how great you think they are. Try to run a small company in a big city with union thugs threatening to "f you up" if you don't hire them to do the work. Utterly disgraceful. The unionized police are no help either. It's all thuggery and mob mentality. If they don't get what they want then they make threats. If the threats don't work, they break stuff. If breaking stuff doesn't work, they strike. I've never had non-union labor behave like that, not ever. The labor unions breed a sense of entitlement and fill their members with the type of worker party "the company can't run without us" bravado that's simply not so.

Of course, that's my experience in the US. China obviously isn't there yet. But they'd best be careful if they want to keep their economy running.

Re:see what the Union free work place get's you!

[rwise2112]

see what the Union free work place get's you!

Actually, according to this, 90% of China's workers are in a union. The US for comparison is at 12%.

Re: see what the Union free work place get's you!

[lsatenstein]

Having a fiduciary duty to make a profit does not extend to or excuse a violation of law, or asking others to violate law. That's what you "fiduciary duty" people seem not to get; that duty does not supercede law, ethics or morality in any way.

Stop making excuses for the sociopaths making the world a worse place for your kids to live, and stop holding their actions up as a paradigm that you and everyone else should follow. Seriously. Just stop.

The question to answer is "What is the net-net profit" that Apple really needs? Are the directors drawing too much salary, forcing a squeeze on shareholders and Apple's suppliers? Is it time for suppliers to tell Apple that supplier owners and their employees health and basic financial well being are being impacted?

Is it that Apple sales are down, because their software quality is down? Is it that Apple is being sued by the European Union that claims that Apple evaded taxes and paid only 50Euros per million dollars of revenue, and the Union will win?

Re:see what the Union free work place get's you!

[khallow]

That's a remarkably thin guilt by association fallacy. Somehow being founded by a person who has received public recognition from a public corporation of the US (with the express purpose of promoting democracy) is now tantamount to being a puppet of the US. And said tenuous recognition is now being largely funded by the US.

Perhaps you could come up with evidence for your assertions?

Re:see what the Union free work place get's you!

[shutdown -p now]

Russia is a very different story, their economy is based largely on exploitation of natural resources, mostly oil. As John McCain put it "Russia is a gas station masquerading as a country". They have little on the way of private Capital investment, the linchpin of a Capitalist system

It was only under Brezhnev that USSR made exploitation of its natural resources the staple of its budget.

Re: see what the Union free work place get's you!

[david_thornley]

I have stock in the company I work for. If it goes bankrupt, I lose the invested money, but that's less than 10% of my liquid assets. The other effect of bankruptcy would be that my income would 95% cease, and that would be much more significant. The people with the most interest in the stability of the company are very likely workers.

Re:see what the Union free work place get's you!

[david_thornley]

Some of us want the government and business to be somewhat at odds. As an individual, I don't have much power, and either an overpowering government or an overpowering business could screw me over good.

Re: see what the Union free work place get's you!

[Coren22]

My guess is it is because Apple bills itself as the progressive darling, whereas MS and Samsung stay out of politics. Does Google even have anything manufactured anymore? They don't own the Motorola Mobility division anymore, so all I can think of is Chromecasts. When Google was making cell phones, they were assembled in the US, not China, so it doesn't make much sense to talk about the working conditions of Chinese factories there. With a bit of Googling (LOL), I discover that the Chromecast was made in China, but no idea who.

Also, Apple was very vocal not too long ago about fixing factory conditions after Foxconn was having issues, so they made some attempts to correct the problems, but now are causing worse ones. Is there any indication that the other companies you mention had any of these labor issues and failed to put pressure on the manufacturer to correct the issues?

Re: see what the Union free work place get's you!

[khallow]

I don't expect gratitude for showing you the truth.

WTF Profits

[I4ko]

Greed, greed, human greed. Aren't Apple the company that has 150+B in the bank. Why do they need them all. Instead of working on 20% markup they are working on 400% markup. This should be outlawed. Limiting markup to 20% is the only thing communism got right.

Re:WTF Profits

[Austerity Empowers]

Greed, greed, human greed. Aren't Apple the company that has 150+B in the bank. Why do they need them all. Instead of working on 20% markup they are working on 400% markup. This should be outlawed. Limiting markup to 20% is the only thing communism got right.

China is theoretically communist, it is doing a bad job of protecting its employees.

Re:WTF Profits

[bluefoxlucid]

People say "profits" a lot. They try to ignore that prices don't follow inflation, and that costs are real.

The long and short of it is, somewhere behind the opaque shroud, Apple goes from selling the last-model iPhone at a 10% profit to selling it at a 10% loss. What's probably actually happening is people just aren't interested in spending on a new phone now, and will take a low-cost phone at a bargain. Apple can't cut the current-model back to that cost, and can't even get the old-model down that low, and so is trying to hit prices that the consumer will pay by cutting costs back.

In other words: the "cutting into profits" is more like "losing business, and facing extinction." Apple isn't going to die out today; they know that if they can't keep their phones in the consumer market, they're going to die out in a decade, maybe. Strategic executives actually look way ahead and try to minimize the likelihood of such an outcome.

You're talking about a 20% mark-up, and you've managed to ignore that Apple will take a 10% mark-up but the consumer won't pay $600 for a $550 phone. If Apple wants to sell a phone like that in a market of $350 full-featured phones, it needs its Chinese manufacturers to deliver a $350 phone that it can *maybe* mark up to $400 as a premium option.

At the base, this happens when competitors are offering top-of-the-line technology at the break-out price point. 10% more for 10% more feature, until you're suddenly paying 50% more for 10% more feature; you stop just at that point, and now your next competitor can only offer a better product at 1.5 times the price. Yours might cost $400, but their barely-any-better gadget now costs $600. Even if most of your market is in mid-tier $250-$300 phones, your major competitor can't distinguish themselves as a better product without a distinguished price point: to stand apart in features, you must stand apart in price.

This is a common strategy for other reasons. You release a low, mid-tier, and high-end flagship product; then the customer sees that the mid-tier product is much cheaper than the top-tier product but almost as good, and buys the mid-tier product due to its excellent value. Without the top-tier product, they make a more price-conscious decision, determining their need rather than bare purchasing efficiency. What I've described is an extension: you ensure that the high-end flagship product of distinction is someone else's, and that it's *very* expensive by way of making the most-expensive *reasonable* product on the market yourself. Maybe nobody buys your Galaxy S7; but they're sure as hell not going to spend twice as much on a fucking iPhone.

Apple has the extra disadvantage of not selling a mid-tier product; they sell the iPhone 5 currently, which broadcasts loudly that it's an out-of-date product because it was the premier product four years ago. If it was called the iPhone 7n (new budget offering), people would perceive it as a modern, budget-friendly phone without all the bells and whistles.

Re:WTF Profits

[MitchDev]

Chinese government officials are corrupt (just like their US counterparts) and are not not doing their jobs to protect chinese workers, to keep themselves fat and rich...

Re:WTF Profits

[SuricouRaven]

Apple have, in a way, shot themselves in the foot: They made some really good phones. So good that customers don't want to buy new ones now. There are no new must-have features in the latest model. Much like Microsoft's desperate attempt to kill off Windows XP and then Seven, they struggle to compete with their own past self.

Re:WTF Profits

[Austerity Empowers]

Shh you can't say that out loud, better to blame the foreign businesses for exploitation, China's mantra for almost 100 years. As every toddler learns, it's always easiest to blame someone else for your problems.

Re:WTF Profits

[Afty0r]

Aren't Apple the company that has 150+B in the bank.

How much do you have in the bank? The fact you're accessing Slashdot probably puts you in the top 10% globally, very possibly the top 1 or 2%

So, given that you're probably already incredibly wealthy compared with most other humans, why do *you* want more money? Why do you go to work? Why do you make the salary or hourly rate that you do - why not do it for 10% less - is it because you're greedy?

Re:WTF Profits

[I4ko]

The only reason I go to work (besides (occasionally, with the new PHBs) enjoying what I do) is to save a little bit more so I can buy enough land for a self-sustaining farm.

Oh no!

[K. S. Kyosuke]

But at least the workers hearts will be warmed by the thought of Apple's profit margins, if not by their empty stoves.

Re:Oh no!

[Killall -9 Bash]

Does that currency conversion take into account local cost of living indexes? Or is it purely based on currency exchange rates?

Re:Oh no!

[avandesande]

Milk is not popular in Asia, most are lactose intolerant. Not sure about China but in Japan drinking milk and eating dairy products are viewed with disgust. So maybe milk is a bad example.

Re:Oh no!

[HornWumpus]

Mmmmm, Nato. (not the treaty, the rotten soybeans).

free choice

[MrNJ]

As long as the employees are not forcibly coerced to work there, I fail to be outraged.

Re:free choice

[imgod2u]

Outraged or not, clearly this is a problem. While it might not be Apple alone, China's government should really look into beefing up labor protection enforcement. If no supplier can provide the low cost, they'll have to pay more. Or find alternate places to do their manufacturing.

Re:free choice

[elrous0]

Yeah, they're perfectly free to go back to dire poverty and hunger if they want. No one is holding a gun to their heads to force them to feed their kids and have basic shelter.

Re:free choice

[Nidi62]

As long as the employees are not forcibly coerced to work there, I fail to be outraged.

I really have a hard time calling these students "volunteers"

Re:free choice

[Zontar_Thing_From_Ve]

As long as the employees are not forcibly coerced to work there, I fail to be outraged.

They may not be forced to work there but it's very possible that for all practical terms they can't leave this work. I don't know. I can't tell you whether this exists in China or not, but in Russia employment contracts are often signed. A worker may be guaranteed X years of a job at Y years of money. But here's the catch - the worker who signs it can't leave the job without paying a huge fine that is the equivalent of several years of salary. If this factory has a similar thing, they may not be able to leave. I know that in the dormitories (some recent reports suggest that the dormitories are no longer in use, but outsiders don't know why) they used to put up netting to prevent "happy" workers from leaping to the deaths out of the windows. That doesn't suggest to me that there's likely a lot of individual freedom while working there.

Re:free choice

[DRJlaw]

As long as the employees are not forcibly coerced to work there, I fail to be outraged.

"Pegatron has been passing on financial pressures from Apple by committing multiple violations of Chinese labor laws on fair pay and workplace safety."

In what jurisdiction are you free to violate labor laws so long as you do not forcibly coerce your workers to continue to work for you?

Just curious. I mean, I could improve my life immensely by breaking laws willy nilly while still not using forcible coercion. So I'll probably move there.

Re:free choice

[ThatsNotPudding]

As long as the employees are not forcibly coerced to work there, I fail to be outraged.

Our great allies in the Gulf States figured this out decades ago: only hire foreign workers, with job one being taking their passports. So you can expect to see more and more Nepalese, Sri Lankan, even Sub-Saharan African 'guest workers' showing up in Central Committee-approved slave factories to pass along those US stockholder-demanded savings.

Re:free choice

[JesseMcDonald]

Yeah, they're perfectly free to go back to dire poverty and hunger if they want.

No, they're free to provide for themselves without any help or hindrance from Apple or Pegatron. If that means "dire poverty and hunger" that is only because this is the natural state of the universe; if you want anything else you have to provide it for yourself, either individually or working together with others voluntarily for mutual benefit.

If they choose to work at Pegatron they do so because, despite what anyone else might say about the pay or conditions, they feel that this is their best option. Pegatron has no inherent responsibility to provide for anyone beyond what they mutually agreed to in the terms of employment. The workers' conditions—in the aggregate, including any who were laid off—would not be improved by Pegatron (or Apple) losing customers due to non-competitive pricing, or by losing investors due to non-competitive returns.

If really you want to improve their lot, the most effective strategies would be to increase competition for workers by reducing (not increasing!) the barriers to entry for new businesses, to encourage free trade, and to lift the restrictions on immigration to areas with higher standards of living.

Re:free choice

[Falos]

If they're violating Chinese labor laws your privileged disregard is at best misplaced.

Re:free choice

[K. S. Kyosuke]

Is it still the case that people in China who want to get into college have to go to work in factories in dismal conditions to "prove" themselves that they are "college-worthy"? I think I've read something about it, and similar things were common in the former Eastern Bloc, too. (The difference is that unlike the Eastern Bloc, totalitarian China is still here.)

Re:free choice

[thegarbz]

If that means "dire poverty and hunger" that is only because this is the natural state of the universe

If they choose to work at Pegatron they do so because, despite what anyone else might say about the pay or conditions, they feel that this is their best option.

You now owe me a new White Privilege Meter. Mine just said OVERLOAD and then started smoking.

If really you want to improve their lot, the most effective strategies would be to increase competition for workers by reducing (not increasing!) the barriers to entry for new businesses

And an irony meter too. Maybe that second company who can compete with Pegatron by driving the workers wages even lower to win the contract can build it. But only if they remove pesky barriers to entry like minimum wages.

Re:free choice

[fluffernutter]

The choice is to work and be abused or starve. You're an idiot if you think that's a choice at all.

Re:free choice

[HornWumpus]

Damn, I've been doing it wrong.

I should hire away my competitions best workers by paying them less...

You are a fucking moron, just so you know.

Re:free choice

[sim2lew]

Voluntary because you can choose between poverty and even more poverty? You say it's just the way of the universe but it's not, it's a human construct caused by corrupt people in positions of power forcing workers into an unbearable situation by taking all of the resources by force.

Re:free choice

[thegarbz]

I should hire away my competitions best workers by paying them less...

You are a fucking moron, just so you know.

Before you call someone a moron you should know the difference between an industry that requires "skilled" or "best" and the Chinese manufacturing industry, which only relies on "able to stand upright and move faster than the other people standing in line for their job". Competition does not drive up wages in every scenario, especially since low skilled wages are an expense not a revenue.

Go read an economics book some time.

Scrutiny

[Cloud K]

I'm no Apple fanboy (just actually switched most my stuff away) but it's worth noting that the Register are well known for having an anti-Apple bias in their reporting.

Other companies use the same manufacturers - I would argue that consumers in general wanting lower priced tech is causing this, not specifically Apple - they just get a lot more scrutiny with being such a huge tech company.

Re: Scrutiny

[Anonymous Coward]

Apple just isn't being as innovative as they were several years ago. For quite awhile, the iPhone was the best phone out there. Apple includes features that their competitors didn't. Their products were also rock solid, and I could count on not having any problems with OS X and iOS. Their products have always been more expensive, but you could make a strong case that you got what you paid for. Perhaps there's only so much innovation that can be done with smartphones, at least for awhile. I get it that there's only so much of a market for tablets, too. There are other opportunities, though, but Apple isn't getting in on them. People will pay money for a luxury item when you can make the case that it really is better. That was certainly true for a time with Macbooks and iPhones. But it's not true anymore, and most people aren't going to pay more for a luxury item that's no better than a much less expensive product from a competitor.

Re:Scrutiny

[Anonymous Coward]

Um... The tagline for The Register is "Biting the hand that feeds IT". They make fun of everyone. From Yahoo by putting exclamation points after every word in the title, to calling Intel "Chipzilla", they are very egalitarian in who they will take a swing at.

Re: Scrutiny

[meta-monkey]

Apple is absolutely still being innovative. We had a story just last week about how they're leading the tech sector in the innovative ways in which they pander to racial minorities and sexual deviant groups. The Chinese workers may not be in love with the forced overtime, low pay and grueling labor conditions of Apple's factories, but I'm sure deep down they have no small amount of well-earned pride that across the sea in Cupertino transethnic pansexual demiqueer genderfluid owlkin working at Apple's offices are being treated with the respect and dignity they so richly deserve.

Re:Scrutiny

[alvinrod]

I think they get more scrutiny (and in some ways deserve it) because they're one of the companies that always talk about doing progressive things and being good for the environment, diversity, etc. You could also argue (probably rightly) that they get additional scrutiny just because they're the top company as well, but they were also one of the companies that made a big deal about all of their efforts and want to talk about their social responsibility.

If they want to do all of that for marketing or as part of their branding then they also have to live up to the expectations. No one forced them to embrace those ideals, so I don't really have a problem if anyone wants to take Apple to task for failing to live up to them.

Re: Scrutiny

[Cloud K]

Yeah that's pretty much why I moved away. It used to be that you paid a bit more to be ahead of the technology curve (software as well as hardware). Now you pay more for something prettier and with a privacy and security focus, which is good, but that's it. Dell make a nicer Ultrabook (XPS 13) and Google tends to be a year ahead with mobile stuff (intelligent photo search being one example). A classic thing that winds me up with iOS is still not having weekend hours for its Do Not Disturb mode. It'll be touted as a major feature one year to much applause and cheering in a keynote while 'droid has had it for years...

Re:Scrutiny

[avandesande]

Yes but when they cause narcissistic injury to all those apple fanbois they have gone over the line....

Re:Scrutiny

[thegarbz]

Apple - they just get a lot more scrutiny with being such a huge tech company

And they deserve it. The company with the biggest market and the biggest volume gets to set the policies and standards the other ones simply follow. That's how business to business works and it transcends industries. e.g. only recently I was told we won't ever be seeing a certain feature in a product from a supplier unless Shell want it because they only retool their line for Shell or someone who can match them in purchasing power.

You say jump, they say we'll consult with Apple's specs on how high.

Re:Scrutiny

[Cloud K]

Yeah fair point that. I'm also thinking back to when I originally switched TO Apple, and one of the justifications I made at the time was that I was paying more so they could afford to actually be better. Better policies with manufacturing, better quality control, better customer service, etc. This has proved repeatedly not to be the case.

Re:Scrutiny

[Reziac]

And why blame Apple, when it's Chinese labor laws that allow it in the first place? Every company will seek the lowest cost denominator.

Chinese Gov't Games?

[Tablizer]

China Labor Watch writes...

Is it possible this is gov't propaganda to benefit Chinese companies at the expense of Apple?

I'm sure a lot of factories don't follow written guidelines: it's still a 3rd world country with a lot of bribery and cruft. (Then again, I've seen abuse in USA cubicle-land also.)

There have been complaints from other co's that Chinese gov't inspectors inspect and/or publicize with double standard on foreign firms.

Re:Chinese Gov't Games?

[dysmal]

China Labor Watch writes...

Is it possible this is gov't propaganda to benefit Chinese companies at the expense of Apple?

(+1) Excellent point! I'm not denying that the conditions there are probably pretty bad. This could also be someone using LESS whitewash on the propaganda than normal. Not necessarily an Anti-Apple piece but a less Apple friendly piece.

Re:Chinese Gov't Games?

[SuricouRaven]

China aren't really third world any more - they have a capable space program now. But they have industrialised at such a rapid pace, it's created sharp differences in level of development. They've got modern mega-cities, high-tech factories and some very well-respected research done at universities - but elsewhere they've got farming villages where life has barely changed in a thousand years. The modernisation process is continuing fast.

Re:Chinese Gov't Games?

[Tablizer]

I can partly agree, but their rapid expansion has also left notable gaps that are still third-world-ish. For example, their horrible pollution, and poor working conditions in e-waste. U.S. faced similar problems around 1900. It took a few decades to adjust.

(P.S. sorry for missing the "a" before "double standard". Modnays.)

Makes sense

[Ecuador]

It makes sense, Apple is known to have the largest profit margin by far in the tech industry (close to 40% gross, 20% net), so there is no "room" for them, they have to pass on any drop in revenue to their suppliers. Well, I mean, there is no room if they are adamant at maintaining the largest, by far, profit margin...

Re:Makes sense

[gtall]

The nerve of them. They should operate like Dell, or HP, or any other company just scraping by.

Re:Makes sense

[AmiMoJo]

I wonder, if Tim Cook decided to double all their wages, limit them to 8 hours work a day and improved conditions all round, how much would it affect the bottom line?

40% profit, not 400%

[perpenso]

I am not supporting any worker abuse but lets at least get the facts right. Apple's profit margin is around 40%, not 400%. Many people around here make the mistake of looking at manufacturing costs but not factoring in the years of R&D that went into something, the overhead of a company, etc.

Re:40% profit, not 400%

[x0ra]

An iPhone 6 manufacturing cost is estimated at $200, even if you add 50% for R&D, that's still a 100% profit margin over the entry level model.

Re:40% profit, not 400%

[apenzott]

Apple still has an ongoing operating cost on each of these iDevices after they are made and sold.

This is for the back-end Big Data needed to make these devices perform their magic throughout the service life of the device and Apple has invested substantially in several large data centers to make that happen.

(I am going to stop here as there are additional R&D efforts that are not yet public knowledge.)

Re:40% profit, not 400%

[x0ra]

If all these things are so expansive, then tell me how I can get a $200 third-party phone from Costco which outperform an iPhone 6 both in term of usability, hackability *and* battery life.

Re:40% profit, not 400%

[thegarbz]

Even if you add 50% for R&D you still need to do another 50% for marketing retail and other.

Re:40% profit, not 400%

[The Snowman]

Apple are sitting at either $55.3 billion or $233 billion depending on whether you count long-term securities. They must be doing something right in terms of profit if they can amass that much money.

Re:40% profit, not 400%

[Anubis IV]

I know this may come as a shock, but your numbers appear to have little basis in reality. Instead, let's work with Apple's latest financial statements and draw our conclusions from there.

Focusing on page 3, here's what we can quickly glean using some simple arithmetic with their numbers from last quarter:
- They have a 38% margin after you deduct the cost of sales
- They have a 24% margin after you deduct operating expenses
- They have an 18.4% margin after you deduct taxes

According to page 28, operating expenses is where R&D, advertising, employee salaries, and other day-to-day costs fall, so it's safe to say that your claim regarding a "100% profit margin" has no factual basis, despite you being a random person on the Internet who has an opinion. Rather, depending on how we define "profit", we'd peg it at more like 18-24%.

As for why their margin isn't what you claimed, you probably grabbed your $200 number from this report that was widely circulated a few years ago, but it neglected to consider a number of costs beyond the bill of materials (BOM) and manufacturing. For instance, there's no mention of the cost to ship components to where they'll be assembled, the cost to package the final product, capital expenditures to customize or scale manufacturing, nor of the cost to ship the final product to its destination. These teardowns routinely come in FAR under the actual cost, and that trend has only been getting worse these last few years. It got so bad, in fact, that Tim Cook even took some time to address it last year.

Disclaimer: The numbers on page 3 (and here) represent their full product line, so I will readily admit that we can't take them as hard and fast numbers for iPhones specifically. That said, other statements I've read over the years have indicated that iPhone margins fall in line with their margins for their products as a whole, so we shouldn't expect them to be much different, if at all, given that iPhones account for 57% of their net sales, according to page 25.

Re:40% profit, not 400%

[I4ko]

The years of RND have already been paid, by other money, or they wouldn't have happened. Nobody does RND on a loan, and if it were a load, the loan payments are cost of production, as are salaries.

Re:40% profit, not 400%

[perpenso]

The years of RND have already been paid, by other money, or they wouldn't have happened.

You are attempting to say it is a sunk cost by the time a product ships. That is an irrelevant detail as R&D is ongoing and coming out of today's revenue too. Selling a product at its cost of production is a sign of a desperate and dying company, a company that can no longer afford to create future products and services for itself.

Nobody does RND on a loan, and if it were a load, the loan payments are cost of production, as are salaries.

Companies use debt to finance R&D all the time. Whatever accounting category you place the expense in it is still coming out of company revenue and reducing profits. None of the above changes the fact that Apple's profit margin is 40% not 400%.

Re:40% profit, not 400%

[david_thornley]

Usability is subjective. Your $200 phone doubtless lacks a lot of iPhone features. As long as you don't want them, there's no reason for you to buy an iPhone. The lack of hackability is a feature, not a bug. It allows Apple to make using their smartphones a lot safer and more convenient. You may want to avoid this. I know I don't agree with all design decisions. However, it's completely irrelevant to the price. Battery power? Your phone is probably not as powerful, and therefore is easier on its battery.

Apple only?

[OzPeter]

From what I understand these types of factories manufacture products for multiple customers. If that is the case then this is a non-Apple story and amounts to Apple bashing. So can anyone list manufactures other than Apple that Pegatron services?

Re:Apple only?

[Cloud K]

It's 3 years ago, but Dell and Sony were mentioned here http://www.bloomberg.com/news/...
as well as them being a spinoff from Asus.

Re:Apple only?

[allquixotic]

Pegatron is arguably "worse" than Foxconn, but Foxconn mistreats workers too (by Western standards), and they produce all non-branded Nvidia cards. So all those 1080 Founders Edition boards are Foxconn. And probably a lot of the third party AIB ones are Foxconn or Pegatron, too. Also, motherboards.

Re:Apple only?

[Zocalo]

They generally do support multiple lines for multiple customers, but that doesn't automatically let Apple of the hook. I'd imagine that each customer has a specific and confidential contract negotiated based on guaranteed volumes, excess volumes, complexity of assembly, and so on, which would make a direct comparison problematic even if the numbers were in the public domain, so it's going to be far from clear cut. However, if it can be shown that only Apple is insisting that Pegatron (and presumably other assemblers) push the costs below what they can sustain while remaining in compliance with China's laws (which are not that great to start with), or - perhaps more likely - is doing so to a greater degree than other companies, then it's absolutely an Apple story.

Of course, regardless of Apple's culpability (or not), it's mostly a "western consumers generally don't give a crap about conditions in third world sweat shops" story. Perhaps if someone like Fairtrade, or a similar organization, started establishing and enforcing some standards, putting the brand names on a guilt trip to take more responsibility, and gaving people a choice between paying a bit extra for the peace of mind an "approved supplier" logo brings or just saving a few bucks and conscience be damned, then we might see some traction on this. Until then, it's going to be minimised costs, maximised profits, and screw the cheap labour for every drop of blood and sweat you can get away with.

Re:Apple only?

[thegarbz]

If that is the case then this is a non-Apple story and amounts to Apple bashing

That's only the case if other customers can match the business to business buying power of Apple. You see in this world the company with the biggest wallet will dictate the policies that other companies may be able to take part in. The sheer size of Apple doesn't make this Apple bashing at all unless you can find someone the same size with the same brand recognition that's using this supplier.

Growing Profits

[31415926535897]

Don't you remember the good old days when companies would grow profits by innovating? Even Apple used to be there not too long ago. It seems the the whole world has run out of ideas and so there's one last idea to run into the ground: squeeze suppliers.

Re:Growing Profits

[omnichad]

Apple: now selling commodity products at luxury prices.

Re:Growing Profits

[Anonymous Coward]

What happens when there is no more profitable innovating? The iPhone (or similar device) had been predicted by many for decades. Even science fiction is out of ideas now. Sure there is some stuff, but nothing really mass marketable.

A $200 gadget that will do everything that you carry around in your pocket? Cool. 3D George Washington? Meh. Driving Mars rovers around - limited application. Nanotech is the only thing left, but until we get to the point of grey goo, it will also have limited scope.

That's why we see so much hypi ng of technologies today. Run it up the flagpole and see who salutes. 3D printing? IoT?

Re:Growing Profits

[geekmux]

Don't you remember the good old days when companies would grow profits by innovating? Even Apple used to be there not too long ago. It seems the the whole world has run out of ideas and so there's one last idea to run into the ground: squeeze suppliers.

To clear things up for you, the world is actually full of ideas.

Unfortunately, this world is also full of patent hoarders who have legally secured the rights to 99.999% of whatever might be invented in the future, and are also armed with dozens of lawyers just dying to prove that you merely thinking about inventing something would somehow constitute a patent violation worthy of quashing just for the fun of it, resulting in a financial ass-raping that usually torments the average victim for several years.

But, no we don't need patent reform. The system is working fine, and our future is full of great opportunities.

Only an Apple phenomenon?

[zerofoo]

If life in an Apple contracted factory is bad, it must be even worse working for lower margin companies. Where is the outrage about the working conditions in the factories that supply the thousands of other companies that source their manufacturing in China?

If the Chinese people are unhappy with their worker and environmental protections, the Chinese people need to make those changes. We, in the west, can not and should not change China to what we feel is the "right" way.

Re:Only an Apple phenomenon?

[Anonymous Coward]

What you are seeing is what the human rights activists learned from protesting garmet sweat shops a decade or two ago. People would attempt to raise awareness that people were tied to sewing machines in terrible conditions to make t-shirts, and nobody cared. Once the activist started saying "and these are the t-shirts the evil wall-mart sells," wall-mart would put pressure on the vendors to improve conditions to get their name out of the press.

Others are pointing out that nearly every IT gadget firm gets their products made in similar or worse conditions. Apple, being very visible, is the "wall-mart" that the activist are targeting. Their hope is by sticking all the negative PR (somewhat unfairly) on Apple, that Apple will insist upon changes in how their suppliers operate.

Right or wrong, the tactic works.

Re:Only an Apple phenomenon?

[umafuckit]

We, in the west, can not and should not change China to what we feel is the "right" way.

We don't have to "change China" to affect change. We could just not buy from companies which behave unethically. Apple would cease to strong-arm its supplies if it became obvious that doing so led to a decrease in sales and a tarnishing of its brand name.

Re:Only an Apple phenomenon?

[thegarbz]

If life in an Apple contracted factory is bad, it must be even worse working for lower margin companies

Why do you think other companies have a lower margin?

But you're right about one thing, this isn't only Apple. Multiple companies will use this manufacturer. The thing is when someone like Apple comes in and says jump, you say how high, and then kiss the feet of the person who gave you the privilege of jumping for Apple. When someone else comes in and says jump, you say "let me consult Apple's specs and get back to you on how high I can do it for you".

Re:Only an Apple phenomenon?

[AmiMoJo]

The old "look, this is even worse!" fallacy.

Apple is a good target to pressure for better conditions. They have the money and the margin, they can afford to do it and could eat the relatively small cost. They also pride themselves on taking a moral stance on issues, like not unlocking phones for the FBI or a dead kid's parents, so working conditions should in theory matter to them. Of course, in practice, they care more when it doesn't cost anything to care.

The West has a big part to play in this. Sure, the Chinese do too, but it's often western companies demanding the lowest possible cost, and then moving to India if they can't get it from there. We can't shirk responsibility, especially when we have the power to do something about it at very little cost to ourselves.

Re:Only an Apple phenomenon?

[shutdown -p now]

Neither should we (and insofar as Apple is a Western company, it's also "we") pressure their labor market to cut costs.

Unions are helpful (except when they aren't)

[sjbe]

Why do you need a union? As long as there isn't work coercion, if you don't like the pay rate, or the quality of the workplace, leave.

Unions are sometimes very good for society. Sometimes management is abusive or corrupt. Sometimes there aren't any good jobs available even if someone wants to leave. Sometimes the company is making excessive profits at the expense of workers. Sometimes unions can correct power imbalances. It's very trite to say "if you don't like the situation leave" but that's not realistic for many people. Many people cannot easily leave their job even if they want to. Unions can be very effective at correcting management abuses and protecting those who are likely to be taken advantage of. Many of the features of the modern working life exist thanks to unions including 40 hour work weeks, paid time off, worker safety laws, engineering standards, and much more.

Are unions always a good thing? Absolutely not. Sometimes unions forget about the health of the company and make excessive demands. Sometimes unions make the companies economically uncompetitive. Sometimes unions protect dead weight or problem workers who really shouldn't be protected. Sometimes unions engage in corrupt behavior.

Unions become a problem when they forget their purpose and get too greedy. Management gets unions when they forget about caring for their employees and get too greedy.

Apple should be negotiating the best rates it's from its suppliers. In fact, being publicly traded, it would be unethical not to.

Woah... hold on there. Just because a company can legally do something does not make it automatically ethical. Maximizing profit is routinely at odds with ethical and responsible behavior. The fact that Apple management has a fiduciary duty does NOT mean they have no other legal or ethical obligations. Fiduciary duty is merely one among many legal and ethical obligations of a company. In fact getting the best piece rate from a supplier often is actually counterproductive. Squeezing a supply chain for every penny actually results in unhealthy suppliers and is bad for the Apple in the long run.

Re:Unions are helpful (except when they aren't)

[Anonymous Coward]

Pournelle's Iron Law of Bureaucracy states that in any bureaucratic organization there will be two kinds of people":

  First, there will be those who are devoted to the goals of the organization. Examples are dedicated classroom teachers in an educational bureaucracy, many of the engineers and launch technicians and scientists at NASA, even some agricultural scientists and advisors in the former Soviet Union collective farming administration.

Secondly, there will be those dedicated to the organization itself. Examples are many of the administrators in the education system, many professors of education, many teachers union officials, much of the NASA headquarters staff, etc.

The Iron Law states that in every case the second group will gain and keep control of the organization. It will write the rules, and control promotions within the organization.

Re:Unions are helpful (except when they aren't)

[UnderCoverPenguin]

The Iron Law states that in every case the second group will gain and keep control of the organization. It will write the rules, and control promotions within the organization.

Who, in turn, will seek to please the investors.

Re: Unions are helpful (except when they aren't)

[HornWumpus]

In a bureaucracy? They don't serve 'investors' at all, it's too opaque.

One of the characteristics of bureaucracy is that the bureaucrats are mostly self serving.

Re:Unions are helpful (except when they aren't)

[houghi]

Unions are good to make it fair. A company against an individual is not a fair fight. Because of Unions I get a fair pay, regulated hours and paid holidays.

What I think is the case is that in the US you do not have a union as such. It is more a guild.

I live in Belgium and am a Union member. I have no idea about 95% of mu co workers if they are or are not in a union. My boss does not know, nor care if I am in a union or not. So they even have no idea WHAT union I am a member of. There are three major and several smaller unions. I can join each and every one of them. And often they do not even agree with each other and that is a GOOD thing, because now I can have a choice as to which one comes cmosest to how I think.

As I understand, you do not have that choice. You are a baker, you join the bakers, you are a screenwriter, you join the screenwriters guild.

A guild looks only after its own profession and screw the rest. A union should be looking for all members and what it does at one company will have an influence at another. The result is paid hilidays.

Is it 100%? No, nothing will be.

Re:Hanging clothes up to dry is grim?

[freeze128]

But all those clothes were washed without fabric softener. They will be so stiff and itchy. Oh the HUMANITY!

always seems to happen just before a new iDevice.

[Anonymous Coward]

is released.
Why don't they do it earlier? Simply because it is a non event apart and won't be picked up by the news feeds at any other time.

Shame really because China Watch can do a lot to improve working conditions.
But they have to do it soon because all those workers will soon be replaced by Robots by the time the next iPhone is released.
Then there won't be any workers conditions to worry about now will there eh?

foxconn

[johnrpenner]

its not just apple — i think samsung and all the other manufacturers are always being driven by the american consumer credo 'the lowest price is the law' — forcing manufacturers to pay its people the least.

so long as 'the lowest price is the law' — this trend will continue for all manufacturers.

2cents

Apples crowning achievement

[WaffleMonster]

Man you've got to be pretty bad to violate Chinese labor laws.

Re:Apples crowning achievement

[SuricouRaven]

They are not so bad as they used to be. If you want to see a country with a real lack of labor laws, check out Vietnam. It's the place companies move their manufacturing to when China is too expensive.

Funny...

[MitchDev]

"Pressure from Apple to lower costs is driving worsening conditions for workers at the company's manufacturing partners."

Funny, because I don't see their prices coming down as a result of the savings....

Re:Funny...

[Pascoea]

And you never will. Those savings are purely there to maintain their 22% net profit. Source

Re:Funny...

[MitchDev]

Sorry, forgot my [/sarcasm] tag ;)

China

[nwaack]

Wait...China has labor laws on fair pay and workplace safety?

Social Responsibility?

[Texmaize]

Its funny how when it comes down to it, Apple is not very good at things like the environment, gender equality, and social responsibility when it comes to THEIR business. But, my God they sure are not shy about smugly commenting to others about how they handle issues like environment, gender equality, and social responsibility.

The main problem with our times is that so many people are willing to give a pass to those who say the "right" things instead of judging if they do them. But hey, does it really matter if they move manufacturing offshore to avoid environmental responsibility as longs they make an emoji about your favorite, pet cause?

Corporatism and Facism

[goombah99]

Where independent unions are banned.

Basically when China and Russia gave up on socialism, they created a version of capitalism in the image of what they imagined capitalism to be; not the kind of liberal society you find in advanced Western democracies with their regulated market economies and worker's rights guarantees.

Intriguingly it's almost the very definition of Fascism. Mussolini preferred the term corporatism. But either way it's a paternalistic monopoly on power run in collaboration with corporations for the benefit of the common good. The problem of course is that monopoly on power thing sometimes gets in the way of common good and pateralism. But in the short run it's always produced world beating results. Until he invaded Ethiopia, il Duce's italian miracle in the midst of the depression was the envy of the world. Even FDR sent him mash notes.

SO it's more than ironic that China diverts socialism with Communism then bypasses capitalism for fascism.

Re:Apple is not a tech company.

[unixisc]

Uh, just b'cos they make pretty things does not mean that they ain't a tech company. They have a state of the art R&D department, and their products have some of the most sophisticated software built into them - starting from BSD based firmware and going into things like fingerprint and facial detection, and so on. That too, something they made themselves, other than just getting from Google & slapping it on.

Pegatron?

[rbrander]

Did they change their name to one of the evil Transformers before or after starting to mis-treat their staff?

Re:free choice, shmoise choice

[bettodavis]

Why stop at highschoolers? Kids love manufacturing things with their little hands too, it's like a game they can play 16 hours a day, 365 days per year.

They also love to be screamed at, fed bread and water and a being (gently) bonded to a stake and whipped from time to time. It's how they feel appreciated.

They like it so much that they don't even need to be paid! ain't free enterprise wonderful?

Corrected Title

[Anonymous Coward]

"Pegatron Is Making Life Terrible In Its Factories"

There, fixed that for you.

Not enough data to be useful, bad statistics work

[Doke]

This report is based on too little data to mean anything, nor draw any conclusions. On page 1 of the pdf, "http://www.chinalaborwatch.org/upfile/2016_08_23/Pegatron-report%20FlAug.pdf", the report says "Pegatron is one of Apple’s major suppliers, employing almost one hundred thousand workers in Mainland China". Most of the numbers in the report are based on paystub data. However, on page 5, there is a table showing how many paystubs they analysed. Over 10 months, they collected 2015 paystubs. One month, Jun 2015, they got only 4 paystubs. The peak was 1064 in Oct 2015. The average number of paystubs they got per month was 202. That is only 0.20 % of the workforce. That is not enough data to be a worthwhile statistical universe.

I have no doubt Apple is pressuring them to reduce costs. Conditions there might well be awful. However, I can't tell one way or the other from this study, because it's statistics are insufficient.

Apple doesn't have factories in China

[khz6955]

Apple doesn't have factories in China. Apple does subcontract manufacturing to Pegatron, the same company that make the Microsoft Surface. The same Pegatron that Microsoft is extorting the Android tax from. 'China Labor Watch' most probably a front for the Microsoft organization. ref ref ref

Not necessarily

[UpnAtom]

The only thing a labor union would do here is to drive the business elsewhere.

It costs a lot of money to relocate and retrain people. There's also the high potential of bad PR.

Re:Apple is not a tech company.

[puto]

The fingerprint tech was purchased from Authentec, who sold it to Motorola first, who released it on a phone before apple. Apple did not develop it. They bought the company way after the fact. And as of yet there is no facial recognition on the iphone or os x. But please keep talking shit about something you have no idea about.