The Hidden Costs of an iPad

Four additional deaths and 18 injuries at Foxconn, the Chinese company that builds iPhones, iPads and other electronic gadgets for Apple and other Western companies, have again shed a harsh light on working conditions there. But consumers worldwide keep clamoring for cheaper, better and faster tech gadgets. Is Apple right or wrong to produce in China?

In May 2010 I reported in these pages about a wave of suicides at Foxconn, the factory in Chengdu, southwest China, that assembles iPads, iPhones and other devices coveted by Western consumers.

The Foxconn suicides were only the tip of the iceberg, and some say that conditions at Foxconn are actually better than those at many other factories in China.

Two years ago, 137 workers at another Apple supplier in Eastern China were injured after they were ordered to to use a poisonous chemical to clean iPhone screens. And last year, explosions at iPad factories killed four people and injured 77. 

Now a report by Charles Duhigg and David Barboza in The New York Times has unleashed a public outcry over hazardous conditions and excessive work hours at Foxconn, one of China's largest employers, with 1.2 million workers.

"Employees work excessive overtime, in some cases seven days a week, and live in crowded dorms," the reporters write. "Under-age workers have helped build Apple's products, and the company's suppliers have improperly disposed of hazardous waste and falsified records, according to company reports and advocacy groups."

This NTDTV video shows mixed reactions from within China to the Times report:



About six months before the explosion, Lai Xiaodong, a recent college graduate, moved to Chengdu, a city of 12 million that is among the world's key manufacturing hubs, including for customers like Amazon, Dell, Hewlett-Packard, Nintendo, Nokia and Samsung.

Mr. Lai tried his luck at Foxconn, which assembles about 40 percent of the world's consumer electronics. He landed a job repairing iPads, he saw banners on the walls that warned the 120,000 workers: "Work hard on the job today or work hard to find a job tomorrow."

Mr. Lai soon found himself working 12-hour days six days a week. His accommodations were better than the company dorms where 70,000 Foxconn workers lived, sometimes 20 people stuffed to a three-room apartment.

Then, in May, an exploson was set off by an accumulation of aluminum dust, a byproduct of cleaning the iPads. Mr. Lai died in the explosion.

Apple executives vehemently defend the company's outsourcing policy. "You can either manufacture in comfortable, worker-friendly factories," said a current Apple executive, "or you can reinvent the product every year, and make it better and faster and cheaper, which requires factories that are harsh by American standards."

To its credit, in 2005 Apple adopted a code of conduct for its suppliers that demands "that working conditions in Apple's supply chain are safe, that workers are treated with respect and dignity, and that manufacturing processes are environmentally responsible."

By last year, Apple had inspected 396 facilities to enforce its standards, and conducted 229 audits last year. Apple says that when an audit reveals a violation, the company requires the supplier to address the problem within 90 days. "If a supplier is unwilling to change," Apple says, "we terminate our relationship."

What do you think? Is Apple going about producing in China the right way, given consumers' incessant demand for the newest low-cost gadgets? I look forward to reading you on my blog: http://thomaszweifel.blogspot.com/.

P.S. To learn more about how to tackle thorny issues when working in other cultures, read Culture Clash: Managing the Global High-Performance Team.