Tag Archives: Foxconn

Apple Bites Man

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While no company outshines Apple when it comes to design and marketing, some of its other endeavors need work.

Apple has a long and tiresome history of using alleged sweatshops to build its latest gizmos, and outsources heavily to Foxconn, where no fewer than 10 workers have committed suicide this year.

Apple’s response? As reported in the Wall Stree Journal today:

Apple spokeswoman Jill Tan: “We are definitely concerned … but would like to emphasize that Apple is committed to ensuring the highest standards of social responsibility wherever Apple products are made.”

Her quote is followed by this damning statement: “Apple conducts annual reviews of final assembly manufacturers to uncover any possible violations of its Suppliers’ code of conduct. In its 2010 Supplier Responsibility Report, it found that 65% of the 102 facilities it audited were paying the wages and benefits due to workers.”  [itals mine]

What, in Apple’s eyes, constitutes “highest standards?” Would it accept a 65% yield on its iPods or iPhones?

I don’t think so.

Foxconn’s ‘Dispiriting’ Suicide Response

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Ten attempted suicides (eight successful) in 10 months has Hon Hai (Foxconn) reeling from yet another round of bad press.

Against all odds, the situation has worsened as bloggers have uncovered a video purported to show Foxconn security guards beating an employee. (Is this the Shenzhen citadel, or Abu Ghraib?)

Terry Gou, Hon Hai’s founder and chairman, today insisted to the Wall Street Journal that his company is “not a sweatshop,” and that several measures are being taken to get to the root of the deaths. Among the responses:

  • A suicide hot line.
  • Outside counseling.
  • A “Foxconn Employee Care Center.”
  • A prayer group led by Buddhist monks.

DigiTimes, the excellent Asia-based news source, reports Foxconn is even bringing in an exorcist to help deal with the demons plaguing its factory workers.

Nothing against those who free the world from diabolical spirits, but my advice is tad simpler: Treat your workers better.

Add Ons

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Now that the worst of the financial meltdown is (hopefully) behind us, one of the trends to watch will be how quickly EMS companies expand capacity.

Plexus, which has always been conservative in its approach, said this week it would first consider adding to its Penang, Malaysia, base, which is currently its largest campus, as well as alternatives in China and possibly Thailand. It said its next investment in Europe would likely be in Oradea, Romania, where the company already has two sites and feels “a more permanent location in very close proximity” would be in order.

Celestica, on the other hand, said it is looking to acquire fairly modest-sized health-care businesses, but hasn’t indicated plans to add capacity.

Flextronics and Jabil appear more set on building up manufacturing capabilities for alternative energy products. Foxconn, of course, looks like it might invest just about anywhere.

A Shot at the Fox

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Kudos to the Washington Post for its condemnation of Foxconn’s heavy-handed treatment toward humans. And an extra high five for pointing out that while arguing with Foxconn is futile, the effective response could be to boycott products designed by Foxconn’s customers.

But it’s sad to say that the WaPo’s editorial — a blog, really — came only after Foxconn workers were accused of attacking a journalist. Foxconn employs hundreds of thousands of workers. Should not their fates matter, too?

Unrest in Mexico

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Did you know the vast majority of workers at some major Mexico-based EMS companies are, in fact, contractors?

Reporting by Corporate Watch says the bulk of workers at plants owned by Foxconn, Flextronics, Jabil and others are, in fact, temps.

Here’s a quote regarding one (fairly recent) study:

A 2007 Cereal study found that approximately 60 percent of the 400,000 workers in Mexico’s electronics industry work for temporary agencies, with some companies employing as much as 90 percent of their workforce through sub-contractors.

The reason I bring this up is because most of these companies also are members of the EICC, a group of leading electronics companies that, among other things, have signed on to a “Code of Conduct” governing how they would treat workers, including temps. Yet that hasn’t stopped street demonstrations in Guadalajara, where a small group of workers has argued in favor of better employment conditions and severance payments.

I’m not willing to blow this out of proportion. But as a nation that aspires to be the benchmark for the world, we must take care to ensure our standards are consistent in all lands in which we work, not just our own.

A Netbook by Any Other Name …

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The folks over at Liliputing.com are doing a great job reviewing the FCC files and elaborating on every new PC that gets listed. The latest is a series of at least three Foxconn-developed netbooks that are now listed and will likely be packaged for sale in the US.

What they have further uncovered is another potential reseller of the ODM’s netbooks — Sylvania, which the evidence suggests is going to rebrand the Foxconn SZ900/SZ901 under its name in the US.

Just a heads up in the event the company that manufactures your PC matters to you.

Conquering the Univers(al)

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Despite their relative size and prominence, Taiwanese EMS firms not named Foxconn don’t get much play in the US. But today’s deal is a doozy: Advanced Semiconductor Engineering, a provider of semiconductor manufacturing and IC packaging services, along with its two subsidiaries, has offer to acquire all outstanding common shares of Universal Scientific Industrial Co., Ltd. in a cash and stock deal valued at about $571 million.

USI is, of course, the world’s 24th largest – and Taiwan’s third largest, after Foxconn and Orient Semiconductor – provider of EMS services. It had 2008 EMS sales of $490.4 million, and EMS work makes up about 25% (or about $318 million) of its overall sales so far this year.

ASE and its subsidiaries already own 18.2% of USI’s outstanding common shares. Assuming it goes through, this will create a packaging, test and board assembly monster. Advanced Semiconductor Engineering already is the world’s largest test and packaging house. ASE’s revenues year-to-date are $1.84 billion; USI’s are $1.27 billion.

That’s some serious vertical integration.

Chong-where?

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Where in the world in Chongqing? If you don’t yet know, you’d better grab an atlas as the ultra-dense (population: 31.4 million) central China municipality is fast becoming the next major hub for electronics manufacturing.

A reported $43 billion worth of foreign investment is pouring into western China, with more than 550 companies taking flyers on the region. Foxconn is on board (to the tune of $1 billion), and Quanta is reportedly considering a similar deal to open a PC assembly plant.

Be forewarned: the Three Gorges Dam, which in many experts’ opinions is a disaster waiting to happen, is nearby. And the crime so rampant in Shenzhen is making its way to Chongqing as well. But there’s no stopping the pursuit of cheap labor — even if it costs billions to save pennies.

Red Over Greenpeace

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Another day, another whine from Greenpeace.

This time, the would-be environmental group complains that several large PC makers are “backtracking” on promises to eliminate certain chemicals from their computers.

In a press release issued today, Greenpeace cites Hewlett Packard, Dell and Lenovo – for “failing to improve their low scores.”

Dell and Lenovo are called out for delaying their migraton to non-PVC and BFR materials, while HP is cited for “[postponing] its 2007 commitment to phase out PVC and BFRs from its computer products from 2009 to 2011. [I]t is not even putting PVC and BFR-reduced products on the market.”

“Greenpeace takes voluntary commitments very seriously and holds companies accountable for their promises. There are no excuses for backtracking, and no reason for these companies not to have PCs free of PVC and BFRs now,” said Greenpeace International Toxics Campaigner Tom Dowdall in the statement.

Which is great, except it’s also wrong.

Keep in mind those scores are set and tabulated by Greenpeace. And note that those targets are constantly moving. Greenpeace exists only to wag its finger at large corporations. It needs enemies in order to survive, even if that means conjuring up ghosts and bogeymen.

Meanwhile, Greenpeace also ignores that the science does not yet support the elimination of BFRs, and in fact, may suggest otherwise. As Dr. Arlene Blum, executive director of the Green Science Policy Institute and a member of Chemists Without Borders noted in her blog in May, “it is difficult to make a causal connection between chemical exposure and health impacts.”

And it ignores that all the major PC vendors now have significant takeback programs in place, providing some level of protection against these chemicals entering the waste stream.

While it pats Apple on the back, claiming its new PC lines “virtually free of PVC and completely BFR-free,” Greenpeace misses that Apple is perhaps the worst of the bunch when it comes to auditing and ensuring its vendors — which include Foxconn — follow acceptable labor practices.

BFRs may be bad, but what’s the alternative? Remind me: Does fire cause pollution?

90K and Counting

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During iSuppli’s EMS webinar yesterday, an interesting data point was revealed: 90,000.

That’s the number of workers the EMS/ODM sector has laid off during the current recession. That’s an astounding figure (and assuredly does not include the reported 100,000 Hon Hai purportedly was letting go).

Even scarier than the number itself is the unmeasurable amount of experience and brain power that has been drained away, much of it likely for good. Talented engineers and technicians don’t stay on the sidelines long; they find other jobs — often in other industries.

When all is said and done, that may be a legacy we as an industry will be coming to grips with long after the order books have filled again.