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CNET Tech Industry Riots, suicides, and other issues in Foxconn's iPhone factories

Riots, suicides, and other issues in

Foxconn's iPhone factories

What makes life hard at the giant plants that make iPhones and other staples of high-tech
life? CNET's Jay Greene traveled to China to nd out.

Tech Industry
September 25, 2012
12:00 AM PDT

by Jay Greene
@iamjaygreene

ZHENGZHAO, Henan
province, China -- If
you want to
understand why
iPhones are made in
this corner of the
world, look no further
than Li Yue.
Li Yue, a 21-year-old student, waits
When I met the
outside a recruiting kiosk outside
effervescent 21-yeara plant run by Foxconn in
Zhengzhou, China. She eventually
old, she was lined up
would get a job with the company,
at a kiosk outside the
but in its Taiyuan plant, a 10-hour
gates of the massive
bus ride away.
assembly plant owned
Photo illustration: James Martin/CNET
by Foxconn. Li,
wearing a white T-shirt
and blue jean shorts and carrying a pink parasol to beat the heat on a scorcher of a
June day, was among a group of a dozen or so candidates applying for a job with
the Taiwanese rm. Not a specic job, mind you. Any job.

It's not as if Li, who just nished her rst year as a student at Henan Police College,
didn't have much going for her. She was bright and engaging. She spoke more than
passing English. And she conveyed an eagerness to get started.
Foxconn granted her wish. But instead of landing a job at the plant here, which
employs more than 190,000 workers, Li boarded a bus that afternoon for Taiyuan,
in the Shanxi Province, a 10-hour ride away. It may have been more than she
bargained for.
Late Sunday night, the Taiyuan factory, with more than 79,000 workers, was roiled
by violence. Foxconn said "a personal dispute between several employees
escalated into an incident involving some 2,000 workers," leading Foxconn to
suspend operations at the plant for a day. While Chinese authorities are
investigating the cause of the riot, Foxconn said that it "appears not to have been
work-related." Apple declined to comment on the riot.

From rocks to
recycling: The life
of an iPhone

The weekend violence is the latest in a growing list

of incidents that have heightened concerns over
conditions in factories that make iPhones and
other high-volume tech products. There have been
employee suicides, explosions at two plants that
make Apple gadgets, and reports of harsh working

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Day 2: We look at the

environmental concerns
raised by mining for the raw
materials of the iPhone and
what happens to iPhones
when people get rid of them.

conditions. A New York Times investigation of the

manufacturing of Apple products in China in
January painted a picture of a company that wants
to improve the workplace at its partners such as
Foxconn but "falters when it conicts with crucial
supplier relationships or the fast delivery of new
products."

There are other, less obvious issues adding to tensions in these teeming facilities.
Wages may be high compared with other jobs in China, but they are sometimes
barely enough to cover rent in the huge dormitories in which employees typically
live, and still leave workers with money to send to family members in villages who
live on even less. Managers can subject employees to harsh public ridicule that
would be unthinkable in Western workplaces. And employees are often reluctant to
make waves simply because there are so many other people who would happily
trade places with them.
"The employees always say the people outside want a job," one employee told me
in an interview, "and the people inside want to quit."

When a major new product such as the iPhone 5 is heading to stores, even more
stress is put on that fast-growing manufacturing chain. Apple sold 5 million iPhones
over the weekend (up from 4 million for the rst weekend of sales for the iPhone
4S), and could sell 10 times that amount by the end of the quarter that closes
December 31. Meeting that demand has required an epic buildup of materials,
infrastructure, and labor, all while satisfying Wall Street's need for bigger, more
historic prots.
Li, who is from Huaiyang, about 120 miles southeast of Zhengzhou, knew all about
the suicides at Foxconn. And she had read articles online about the working
conditions at the company's plants. But she still lined up for the interview, during
which recruiters asked the most basic questions and look for scars and tattoos,
according to Li. And she had no qualms about paying the 150 renmimbi, or $24, for
a bus ticket to Taiyuan, even for a job that pays 1,550 renminbi a month, about
$244. (Foxconn raised wages in Zhengzhou on August 1 to 1,800 renminbi, about
$283.)
"It's very hard to get a job at Foxconn," Li said, with her pink purse and a grocery
bag full of food in her hand. "They pay more than other companies."
Workers like Li are in such abundance that they've become a resource in much the
same manner as aluminum or plastic. They move among cities such as Taiyuan,
Zhengzhou, Shenzhen, and others where iPhones are made as needs arise. And as
soon as they leave their jobs, they're replaced by other workers, just as eager as Li
to get started. That's particularly true as Foxconn opens new factories in inland
cities, where opportunities are scarce.
Putting size in perspective
Scale matters when you're trying to satisfy global consumer demand. Foxconn,
which makes products for Apple and plenty of other tech giants, including Dell and
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Hewlett-Packard, is huge, employing 1.1 million people in China. But then, China is
massive, with more than 1.3 billion residents.
Consider Zhengzhou. Everywhere you look in the part of the city where Foxconn
has set up shop, construction cranes loom. Excavators move dusty, dry earth, while
skeletons of long factory buildings and 12-story dormitories form a changing
skyline. Chinese media report Foxconn plans to employ 300,000 workers here
within a few years, but it's still all Foxconn and Apple can do to keep up with
demand.
As absolutely gargantuan as Foxconn's facility is
here, Zhengzhou can handle it. The city has 8.6
Construction near Foxconn's factory in
million residents. Henan province, of which
Zhengzhou, China.
Zhengzhou is the capital, has a population of 94
Jay Greene/CNET
million. That's the same number of residents as
California. And Texas. And New York. And
Pennsylvania. Combined. If it were a country, Henan would have the 12th largest
population in the world, in an area roughly the size of Wisconsin.
I came to this city because I wanted to explain how an iPhone comes to life and the
consequences of meeting prodigious global demand. Beyond the exposes about
conditions in the factories that make iPhones, we've also seen troubling reports of
pollution caused by the mining for its raw materials and its ultimate disposal.
I contacted Apple during my reporting for this project. The company provided a
statement last night.
"Apple is committed to the highest standards of social responsibility across our
worldwide supply chain," the company said. "We insist that all of our suppliers
provide safe working conditions, treat workers with dignity and respect, and use
environmentally responsible manufacturing processes wherever our products are
made."
True, virtually any major consumer electronics product carries similar labor and
environmental issues. The life cycle of an iPhone isn't all that different than that of a
Samsung or an HTC phone, and nearly every modern mobile phone is made by
Asian contract rms, where worker rights aren't protected by federal and state laws
as they are in the United States. Still, the iPhone is iconic. Its introduction in 2007
upended an entire industry and led the shift from desktop to mobile computing. But
there's a downside, as the riot in Taiyuan reminds us.
Apple is not ignoring the issue. The company has hired a group to audit workplace
conditions, the Fair Labor Association or FLA, as a result of the issues raised in
recent months. Last month, the group reported that Foxconn addressed several
workplace concerns, such as enforcing ergonomic breaks, changing the design of
workers' equipment to guard against repetitive stress injuries, and updating
maintenance policies to ensure equipment is working properly.
"In addition to this ambitious project with the FLA, we've been making steady
progress in reducing excessive work hours throughout our supply chain," the
company said in its statement. "We track working hours weekly for over 700,000
workers and currently have 97 percent compliance with the 60-hour maximum
workweek specied in our code of conduct."
And in response to the wave of press coverage about and activist condemnation of
the conditions at those plants, Apple Chief Executive Tim Cook took offense at any
suggestion that the company is indifferent to the workers in its supply chain.
"Any accident is deeply troubling, and any issue with working conditions is cause
for concern," Cook wrote to employees in January, according to an internal e-mail
obtained by 9to5mac. "Any suggestion that we don't care is patently false and
offensive to us."
Both Foxconn and Pegatron, another contract
manufacturer that assembles iPhones in China,
declined my request to visit their facilities. But
Foxconn, in a statement to CNET made prior to the
https://www.cnet.com/news/riots-suicides-and-other-issues-in-foxconns-iphone-factories/

Apple Chief Executive Tim Cook at the iPhone 5

launch.
James Martin/CNET

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riot that occurred over the weekend, acknowledged

problems and said it is working to improve conditions.
"Foxconn is not perfect, but we have made tremendous progress," the company
said, pointing to the hiring of mental health professionals and an expansion of
extracurricular activities for employees. "It is also clear that our efforts to enhance
employee welfare and support are meeting with success and they are saving lives
and they are serving as a model for other companies with large employee
populations who face similar challenges."
Critics dispute that Foxconn has done much of anything to improve working
conditions. A report released the day before the iPhone 5 debuted, from Students
and Scholars Against Corporate Misbehavior or SACOM, a Hong Kong watchdog
group, painted an entirely different picture. SACOM interviewed 60 workers in
Zhengzhou, detailing continuing problems at the Foxconn plant.

Meet the Chinese activist trying to improve conditions for Foxconn

employees.

"When the peak season comes, they are tied to the production lines with just one
day off in 13 working days, or no rest day at all in a month, all to cope with the
public demand for the new Apple products," the report says. "It is sad to say that to
some extent, workers also yearn for the peak season because their base pay is
insucient to meet their basic needs, especially for those who have to support
their dependents."
SACOM found that employees worked excessive overtime, beyond Chinese legal
limits. The report said that some workers weren't compensated for their overtime. It
cited "inadequate training and protection" for employees using chemicals in the
production process. And the group even found that some workers need to acquire
an "off-duty permit" for a toilet break.
Exploring Zhengzhou
To nd my own answers, I poked around Foxconn's Zhengzhou operation. There, I
hired a three-wheeled, engine-powered cart, something that might be called a "tuktuk" in other parts of Asia, though here it seemed to be known as motorized
tricycle. The driver suggested we simply walk through the Foxconn gates, past the
security guards. No one stopped us.
I didn't try to walk into buildings, where I'm certain I would have been stopped. But
the grounds themselves are clean, if a bit dusty. Orange trash bins with Foxconn's
logo dot the campus. From the outside, the buildings are modern, if a bit ordinary.
Rows of motorcycles are lined up outside in what must be employee parking, and
the sidewalks on this side of the gates are almost entirely empty as workers
assemble gadgets inside.
There's plenty more action on the other side of the factory. That's where most of
the dormitories are. From the outside, the dorms look like apartment buildings
you'd nd in an American city. They are nondescript brick structures, often 12
stories high, row after row of them. Laundry occasionally hangs from balconies.
Guards prevent visitors from entering.
There, it's a lively street scene outside, as residents socialize, while occasionally
picking up a snack or shoes from the kiosks that line the roads. It's a bit dingy. Litter
is strewn on the streets and plastic bags tumble with the breeze.
A 26-year-old woman sits down with me at a food
court on the ground oor of one of the dormitories.
The streets near Foxconn's Zhengzhou
She only gives her family name, Ma, for fear of
dormitories are lined with vendors, selling food
retribution from her employer, Foxconn, for talking
and clothes. Other than the vendors, most of the
people walking these streets work at the
with a journalist without permission. It's a concern of
Foxconn factory.
nearly every Foxconn employee with whom I chat.
Jay Greene/CNET
Her glasses frame a round, cherubic face. She's
wearing a light shirt with a oral pattern, having
changed from the Foxconn polo shirt workers wear on the job.
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Ma works in the service department, logging the defects of iPhones pulled from the
assembly line into a computer. She's been on the job three months, moving from
Shangqiu, a city of 7.4 million that's 140 miles east of here. Like plenty of Foxconn
employees, she took the job because the money was better than any work she
could nd at home.
But the job comes at a price. She left her 1-year-old daughter back in Shangqiu with
her mother and hasn't seen her since she left home.
"I miss her very much," Ma said.

Related stories
Watchdog group once again blasts Foxconn, Apple over labor
iPhone 5 sales top 5M units over rst weekend, Apple says
Apple supplier Foxconn conrms worker riot at Taiyuan factory
iPhone 5 full review: Finally, the iPhone we've always wanted
As for her husband, he's working somewhere in southern China, though she's not
really sure where. The two of them haven't talked since she left home.
The work itself, Ma said, isn't really all that bad. Mundane, yes. But not
overwhelming. She puts in eight-hour days, ve days a week, and tries to get as
much overtime as possible. That's because the pay barely covers her needs.
She earns the 1,550 renminbi, or $244, a month that was common for Foxconn
entry-level workers here before the August 1 raise. But after she pays rent for a
bunk bed in a dormitory room that she shares with seven other Foxconn workers
and purchasing food that she often buys at Foxconn's canteen, there's generally no
money left to send back to her home. And she's terribly worried about rumors that
property management company that runs the dorms in which she and 85 percent
of the Zhengzhou workforce live is going to increase its rent.
For her, the answer is overtime. Ma tries to add as much overtime as she can to
supplement her salary. After media reports surfaced about Foxconn allowing
overtime in excess of Chinese law, which limits overtime to 36 hours a month, her
boss has limited her opportunities to work longer shifts.
THE MAKING OF AN IPHONE (PICTURES)

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"Most of the employees would rather have overtime," Ma said. "They complain that
they can't work more hours."
The idea of receiving higher pay hasn't dawned on her. When I point out that Apple,
which had $117 billion in cash on June 30, more than the gross domestic product of
Bangladesh, might be able to afford paying Foxconn more so its workers could
earn a larger paycheck, Ma just shrugged.
"Of course, everyone would like to make more money, but there is no way to ask
for that," Ma said. "Foxconn can always get more people to work for them."
She's referring to people like Li Yue, the new Foxconn recruit I met who hopped on
the bus to Taiyuan.
(Story continues below)

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(Credit: Mark Hobbs/CNET)

After listening to workers here, as well as at Foxconn's Shenzhen plant and
Pegatron's Shanghai facility, a complex picture of working conditions emerged.
That's not all that surprising given the hundreds of thousands of people who
assemble iPhones. Nearly every worker with whom I chatted had a complaint. Many
of the beefs were mundane, such as the tedium of doing repetitive tasks on
Shenzhen production line or having a roommate in the Pegatron dormitory who
evidently has particularly malodorous feet.
Others have more serious concerns.
"I am required by the factory to do overtime," says a 26-year-old man whose family
name is Zhang outside the gates at Pegatron's Shanghai factory. He said his
manager will ne him if he doesn't report for his assigned overtime. Pegatron
declined to comment on Zhang's statement.
A 21-year-old worker at one of the two Foxconn plants in Shenzhen, whose family
name is Liang, said managers there are often abusive. Liang, who puts parts on
iPhone motherboards, got in hot water with his boss for a mistake a few months
earlier. As a result, his boss told him to write up a note about the mistake that was
then posted on a bulletin board.
Foxconn noted that there is a formal grievance procedure for workers to raise
concerns. But most workers with whom I spoke were unaware of the procedure or
felt it yielded no results. The company also noted that workers could complain
through its union. But the union is a toothless organization, whose leaders are
appointed largely by management.
Liang noted an even greater indignity.
"Managers will yell at you if you make the tiniest mistake and they will not assign
overtime to you," Liang said.
While impressions of working for Foxconn vary, one
feeling is constant. Every worker I chatted with frets
over their paltry paychecks.

After several suicides and suicide attempts at

Foxconn's factories, including this one in
Shenzhen's Guanlan neighborhood, the
company installed netting to discourage
employees from jumping off its buildings.

You might think the complaint sounds familiar. After

all, many of us in the West aren't happy with our pay
Jay Greene/CNET
either. But for Ma and her colleagues, the pay, while
better than that for most other non-skilled jobs in
China, rarely covers their most basic needs. This
isn't about disposable income to see a movie or pick up a cute pair of shoes.
These workers want enough cash to pay for food and rent and send a bit home for
relatives who have even less money. It's fair to say that for most of them, the only
time they'll hold a iPhone 5 is when they're putting one together.
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From rocks to recycling: The life of an iPhone

Day 2: We look at the environmental concerns raised by
mining for the raw materials of the iPhone and what
happens to iPhones when people get rid of them.

Tags: Apple, Tech Industry, Tim Cook, Foxconn

DISCUSS: RIOTS, SUICIDES, AND OTHER ISSUES IN FOXCONN'S...

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