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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."
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."
see what the Union free work place get's you!
But at least the workers hearts will be warmed by the thought of Apple's profit margins, if not by their empty stoves.
Ezekiel 23:20
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.
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.
Table-ized A.I.
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...
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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.
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.
SJW: Someone who has run out of real oppression, and has to fake it.
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?
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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"
The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
Apple: now selling commodity products at luxury prices.
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.
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.
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.
But all those clothes were washed without fabric softener. They will be so stiff and itchy. Oh the HUMANITY!
"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.
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.
"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....
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.
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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?
"Liberalism is a very noble idea, currently controlled by some very bad people. Be sure you do not get the two confused.
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.
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. 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