Just Say No, IBM!

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Over the years, OEM after OEM has fallen prey to Foxconn, lured by the temptation of higher margins by outsourcing product to the Taiwanese ODM. H-P, Motorola, Dell, Sony and Apple are among the many, many companies that outsource billions of dollars worth of product build each year.

Sadly, IBM, one of the few remaining major holdouts, appears on the brink of ending its streak. Big Blue is set to announce a deal to to codevelop something called “environment-friendly” products.

Pending release of financial terms, it’s unclear what IBM stands to gain from the program.

IBM has ventured down the environmentally friendly path before. In 2007, it committed $1 billion to fund Project Big Green, an effort toward environment-friendly, energy-efficient products and services. This is its first known deal with Foxconn, however.

It shouldn’t happen.

As The Economist pointed out earlier this month, China’s reputation for workmanship remains a negative in consumers’ eyes. “The poor external reputation of China’s products hurts not only Chinese companies but also Western firms known to be selling Chinese-made goods.” Citing last year’s scandals over various Chinese-produced toys, the US and India have passed new laws governing imports from the World’s Workshop.

And myriad stories have cited Foxconn’s dismal and imperialist working conditions.

IBM is America’s crown jewel, the greatest electronics company the world has ever known. Getting in bed with scofflaws like Hon Hai cheapens its luster and diminishes its reputation. IBM should walk away.

UPDATE: Whew! That wasn’t so bad. The Wall Street Journal is reporting Foxconn is licensing IBM’s GreenCert technology for estimating the amount of greenhouse gas emissions pumped from factories. It could have been much worse.

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About Mike

Mike Buetow is president of the Printed Circuit Engineering Association (pcea.net). He previously was editor-in-chief of Circuits Assembly magazine, the leading publication for electronics manufacturing, and PCD&F, the leading publication for printed circuit design and fabrication. He spent 21 years as vice president and editorial director of UP Media Group, for which he oversaw all editorial and production aspects. He has more than 30 years' experience in the electronics industry, including six years at IPC, an electronics trade association, at which he was a technical projects manager and communications director. He has also held editorial positions at SMT Magazine, community newspapers and in book publishing. He is a graduate of the University of Illinois. Follow Mike on Twitter: @mikebuetow

5 thoughts on “Just Say No, IBM!”

  1. This is simply an Asian resourcing effort. IBM buys from Asia just like the rest. Also, last I heard the Apple iPhone was a hit in the market. According to Forbes, Foxconn is the exclusive contract manufacturer to build the iPhone, see link. So you must think the iPhone is a poor product, no?

  2. Wow, that was kind of prickly. Read the follow up. The annoucement has nothing to do with “resourcing.” And Apple sells what, 4 million or so iPhones a quarter? That’s out of more than 1 billion cellphones sold each year. The iPhone is a marketing phenomenon, but when it comes to handheld unit sales, it’s not a factor.

    And by the way, IBM’s biggest EMS suppliers are Celestica, Sanmina, Benchmark, Jabil and Flextronics.

  3. It seems to me that Foxconn is the customer in this relationship. IBM will be suppling a solution for Foxconn’s digital city.

    It is quite encouraging in fact that the two are working together in this capacity.

  4. JScableman: Yes, that is correct. My original piece was written ahead of the announcement. At the time, I feared IBM would announce plans to outsource certain production to Foxconn. As I noted in the update at the end, the actual announcement is probably a good thing.

    Thanks for writing.

  5. I worked under the regime of Founder and CEO Terry Gou at Foxconn. As a Westerner (and engineer) the conditions were brutal. Foxconn is a compnay that exploits people of all races. Its industrial park in Longhua (PRC) is particularly oppressive.

    Just say no!
    There are plenty of more humane EMS companies. Benchmark and Flextronics are two companies who actually care about employees as humans. Foxconn is a ruthless, all-consuming machine.

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