The American Life retracts Apple/Foxconn report, cites falsified data

[Bateluer]

http://www.cnn.com/2012/03/16/tech/mobile/npr-american-life-retraction/index.html?hpt=hp_bn8

Acclaimed Public Radio International program "This American Life" has retracted an entire episode about working conditions inside Foxconn, the Chinese manufacturer that builds much of Apple's most popular hardware, after learning the reporter "partially fabricated" information about his visit to the factories.

*snip*

Among the many facts Daisey fabricated, according to PRI, were the number of Foxconn factories he visited, the number of workers he spoke with, as well a major lie about meeting with a number of workers who claimed to have been poisoned by chemicals used on iPhone assembly lines.

Interesting . . . Apple's been making some public statements and reviews of their supplies for abuses and conditions. So I'm inclined there's probably quite a bit of truth in Daisey's piece. Plus, there's also Wired's report about work suicides and a NYT's article about poor working conditions.

 

[Mopetar]

Interesting . . . Apple's been making some public statements and reviews of their supplies for abuses and conditions. So I'm inclined there's probably quite a bit of truth in Daisey's piece.

Most of the things that he mentioned did happen and were reported in the news or in Apple's reports over the past several years. The problem is that Daisey claimed to have witnessed all of these things first hand we only heard about them second hand or that he had spoken with people he'd never met. There were some things that he completely made up though, such as seeing guards with guns at the factories or seeing large numbers of underage workers at the various the Foxconn factories he visited.

 

[MaxFusion16]

Like I've said in an older thread, this whole apple/foxconn labor abuse is way overblown by the media.

Foxconn workers are actually very well paid relatively speaking in china for the type of work they perform and their living conditions are definitely above average. In fact, the job is coveted by many.

Suicides are everywhere, foxconn suicide rate is actually lower than china's national average.

Labor activistist should go focus their attention on textile sweatshops instead.

 

[lothar]

Like I've said in an older thread, this whole apple/foxconn labor abuse is way overblown by the media.

Foxconn workers are actually very well paid relatively speaking in china for the type of work they perform and their living conditions are definitely above average. In fact, the job is coveted by many.

Suicides are everywhere, foxconn suicide rate is actually lower than china's national average.

Labor activistist should go focus their attention on textile sweatshops instead.

This.

 

[Brian Stirling]

Like I've said in an older thread, this whole apple/foxconn labor abuse is way overblown by the media.

Foxconn workers are actually very well paid relatively speaking in china for the type of work they perform and their living conditions are definitely above average. In fact, the job is coveted by many.

Suicides are everywhere, foxconn suicide rate is actually lower than china's national average.

Labor activistist should go focus their attention on textile sweatshops instead.

It may well be the case that the textile sweatshops are more egregious in the treatment of there workforce but the hours the Foxcon workers are required to work aren't right. And, saying the conditions and pay scale is great relative to other Chinese work places is a poor argument. Indentured servitude may be better than outright slavery but does that make it acceptable because, hey, it's not as bad as slavery?

Business has long exploited this "out of sight - out of mind" thing and justified low pay and dangerous work conditions by saying it's better than there used to and by inference, better than there worth! Why is anyone surprised that they now feel it's OK to bring that mentality back home and lower the pay and work standards (regulations) here.

The particular investigation in this case is troubling because they did not do enough to ensure that the story was true. The conditions reported are no doubt true but because he did not personally witness it the credibility of the story is not just zero it's less than zero and in fact gives ammunition to the very businesses that employ these practices.


Brian

 

[Oyeve]

I wonder how much apple products would cost if made in the usa. Probably 300% higher than their high-pricing as it is now.

 

[Dulanic]

I wonder how much apple products would cost if made in the usa. Probably 300% higher than their high-pricing as it is now.

They could do it now and still be making billions. The downside of today's world is short term profits > everything period.

 

[Brian Stirling]

I wonder how much apple products would cost if made in the usa. Probably 300% higher than their high-pricing as it is now.

Not quite...

It would cost more but on the order of 3%-15% more not 300%. Apple has stated that the cost difference is almost negligible and that the reason they do business in China is "flexibility." I don't buy there argument as cost IS the reason they're there, but the difference isn't as much as you'd think.

The labor cost is but one factor with investments in work place safety an the environmental factors being significant difference and probably more so than labor alone. In 1970 when the environmental movement began all 100 of the 100 most polluted rivers in the world were in the USA, Europe and the former Soviet Union -- now they are in China, Mexico and places like that. Better for companies to move production to places that don't enforce environmental and work place safety laws then to spend money here to do so.

Even better for the companies that gain a cost advantage and don't have to live anywhere near where the products are made -- where the pollution is produced.


Brian

 

[dagamer34]

I wonder how much apple products would cost if made in the usa. Probably 300% higher than their high-pricing as it is now.

Supposedly it would only cost $60 more in labor if the iPhone were assembled in the US, but the problem is the entire supply chain is in China. Shipping all the parts to the US just to assemble them would take 2 weeks by boat and be super expensive to transport by air.

 

[Mopetar]

It would cost more but on the order of 3%-15% more not 300%. Apple has stated that the cost difference is almost negligible and that the reason they do business in China is "flexibility." I don't buy there argument as cost IS the reason they're there, but the difference isn't as much as you'd think.

Nope. China really is more flexible right now. All of the suppliers are there, so it just makes sense to assemble the product there. If you have a problem with one display manufacturer, the other two major suppliers probably have plants in China or other nearby countries, making the logistics of changing a lot easier. Really, though, that's about the same as equating it to cost. You can certainly do things that are less flexible, but it just costs more or has the potential to cost more.

The vast majority of the supply line moved to China and other parts of Asia long before Apple started making iDevices. The only way that they could change this would be to open their own plants in the West, which would be incredibly expensive, but given the amount of cash that they're hoarding may be something that they're planning on doing. Even Foxconn has said that eventually robots will replace many of the existing labor positions, so at that point there's not a whole lot of difference between robots in Germany or robots in China.

Right now things have just gotten to the point that the entire industry is located in and around China, so even if it's feasible to open plants in other countries from a cost perspective or possibly even cheaper to do so, it's generally just better to do it in or near China to make it easier to tie in to the rest of the supply line.

 

[Brian Stirling]

Nope. China really is more flexible right now. All of the suppliers are there, so it just makes sense to assemble the product there. If you have a problem with one display manufacturer, the other two major suppliers probably have plants in China or other nearby countries, making the logistics of changing a lot easier. Really, though, that's about the same as equating it to cost. You can certainly do things that are less flexible, but it just costs more or has the potential to cost more.

The vast majority of the supply line moved to China and other parts of Asia long before Apple started making iDevices. The only way that they could change this would be to open their own plants in the West, which would be incredibly expensive, but given the amount of cash that they're hoarding may be something that they're planning on doing. Even Foxconn has said that eventually robots will replace many of the existing labor positions, so at that point there's not a whole lot of difference between robots in Germany or robots in China.

Right now things have just gotten to the point that the entire industry is located in and around China, so even if it's feasible to open plants in other countries from a cost perspective or possibly even cheaper to do so, it's generally just better to do it in or near China to make it easier to tie in to the rest of the supply line.

Actually, investments in automation declined as a percentage of total cost beginning about the time businesses started moving production to China. It was just cheaper to throw 10 cheap bodies at it than outlay $100K or $1M for robotics. With over 1B people it will be a while before China runs out of cheap labor and needs to invest in robotics.

There are some areas, like semi-conductor manufacturing, where quality trumps cost and automation is required but for many other things if throwing more cheap people at the problem is less expensive that's what they'll do.

You are right about the move to China preceding Apples iDevices and having all the suppliers in the same area is nice but that's not the flexibility they're talking about. A couple months back there was a report on this very topic and it listed the reasons why Jobs said this work is never coming back to the USA. The word he used was flexibility, but the examples he and the others in the report sighted were something else.

One example of this "flexibility" was waking up thousands of workers at midnight to begin work on a changed part. The workers were given a biscuit and a cup of tea an then sent to work. This flexibility boils down to demanding more from the work force.

There were numerous other example of "flexibility" but like the one above what it really was is pushing the work force harder. It's not like we in the west an particularly the USA are slouching as the US has one of the hardest working work forces in the world. In the US many plants work 24/7 so there would be no need to wake thousands of people up as they would already be working.


Brian

 

[stlc8tr]

Actually, investments in automation declined as a percentage of total cost beginning about the time businesses started moving production to China. It was just cheaper to throw 10 cheap bodies at it than outlay $100K or $1M for robotics. With over 1B people it will be a while before China runs out of cheap labor and needs to invest in robotics.

From what I understand, China is facing a demographic problem of an aging workforce (partially due to the 1 child policy) so the shift to automation is going be fairly quick. I think Foxconn's goal is to have 1M industrial robots by 2014.

 

[quikah]

It may well be the case that the textile sweatshops are more egregious in the treatment of there workforce but the hours the Foxcon workers are required to work aren't right. And, saying the conditions and pay scale is great relative to other Chinese work places is a poor argument. Indentured servitude may be better than outright slavery but does that make it acceptable because, hey, it's not as bad as slavery?

This is addressed in the show. Part of the reason that they work long hours is because the workers want the overtime. Other times they do it because they feel obligated, if they didn't work the overtime they won't get to work overtime in the future.

Listen, act 3 is about this:

www.thisamericanlife.org/radio-archives/episode/460/retraction

There is a transcript on that page if you don't want to listen to it.

 

[Mopetar]

Actually, investments in automation declined as a percentage of total cost beginning about the time businesses started moving production to China. It was just cheaper to throw 10 cheap bodies at it than outlay $100K or $1M for robotics. With over 1B people it will be a while before China runs out of cheap labor and needs to invest in robotics.

There are some areas, like semi-conductor manufacturing, where quality trumps cost and automation is required but for many other things if throwing more cheap people at the problem is less expensive that's what they'll do.

And over time robotics becomes a more developed field capable of producing better machines at a lower cost. Just because 20 years ago the caliber of machines to replace human workers didn't exist or if they did were cost prohibitive, does not mean that it will always remain such.

That Foxconn has essentially stated that it will begin using a larger number of robots in the assembly process suggests that its even cheaper than human labor. China will eventually get through its industrial revolution and emerge on the other side with a more modernized society that shares more similarities with the United States. Part of that process means that the supply of cheap labor is going to dry up.

Some companies will probably go elsewhere, but many will start using more and more automated processes.

You are right about the move to China preceding Apples iDevices and having all the suppliers in the same area is nice but that's not the flexibility they're talking about. A couple months back there was a report on this very topic and it listed the reasons why Jobs said this work is never coming back to the USA. The word he used was flexibility, but the examples he and the others in the report sighted were something else.

One example of this "flexibility" was waking up thousands of workers at midnight to begin work on a changed part. The workers were given a biscuit and a cup of tea an then sent to work. This flexibility boils down to demanding more from the work force.

There were numerous other example of "flexibility" but like the one above what it really was is pushing the work force harder. It's not like we in the west an particularly the USA are slouching as the US has one of the hardest working work forces in the world. In the US many plants work 24/7 so there would be no need to wake thousands of people up as they would already be working.

The other definitions of flexibility that I found in news reports weren't nearly as bad.

One was the ability to find several thousand additional factory workers (i.e. people who wanted jobs there) overnight. Another was that it took significantly less time to find 8,700 engineers that Apple would need to oversee production. Don't know if that's really demanding more from the workforce so much as it is that China is a really big country and there are a lot of people looking for work, many of them in the same place.

 

[pm]

It's worth mentioning that there's plenty of high tech manufacturing in the US. The company that I work for, Intel Corp., does most of it's design and manufacturing in the US. I tried a Google search for percentages by country, and couldn't find it but given that most of Intel's employees (>55%) are in the US and we have manufacturing centers in Oregon, Arizona, New Mexico, and Massachusetts (and probably a few more that I've forgotten). These factories run 24/7 and they might even be 365 (because shutting down things is tough). Looking to the future, the investments being made seem like they will shift even more manufacturing state-side (most of the investments in the next-gen are being made in Arizona and Oregon).

It might be true that if you want to hire huge volumes of people quickly, then the US might not be the most economical place to do it, but this idea that the US is a ridiculously expensive country to manufacture in doesn't make sense to me given how much manufacturing is done in the US. The US produces almost as manufacturing output as China as was only passed by China in the last 12 months or so IIRC.



As far as the original story, I listened to the podcast over the weekend while travelling and I thought Ira Glass did a great job with the retraction. I've always felt that too much media attention is focused on the original stories and very little on the ones that get retracted and I was happy to see that This American Life spent as much time on the retraction as they did on the original story.

 

[akugami]

It may well be the case that the textile sweatshops are more egregious in the treatment of there workforce but the hours the Foxcon workers are required to work aren't right. And, saying the conditions and pay scale is great relative to other Chinese work places is a poor argument. Indentured servitude may be better than outright slavery but does that make it acceptable because, hey, it's not as bad as slavery?

Except they're paid way above indentured servitude type pay. My two brother-in-laws are in China and my wife talks to them every couple of days via internet video chat. I can tell you that it is really tough in many areas finding work and the pay at Foxxcon is good considering that they are essentially entry level and require almost no experience.

Business has long exploited this "out of sight - out of mind" thing and justified low pay and dangerous work conditions by saying it's better than there used to and by inference, better than there worth! Why is anyone surprised that they now feel it's OK to bring that mentality back home and lower the pay and work standards (regulations) here.

Except most of the jobs are repetitive and boring rather than dangerous. Granted there are dangerous areas where machinery is operated or polishing aluminum with the chance of aluminum dust exploding. Keep in mind that with the education level of most of the workers, this is better than they would find almost anywhere else.

The particular investigation in this case is troubling because they did not do enough to ensure that the story was true. The conditions reported are no doubt true but because he did not personally witness it the credibility of the story is not just zero it's less than zero and in fact gives ammunition to the very businesses that employ these practices.


Brian

Your honor, Chewbacca is a Wookiee from the planet Kashyyyk. But Chewbacca lives on the planet Endor. Now think about it; that does not make sense!

Why would a Wookiee, an 8-foot-tall Wookiee, want to live on Endor, with a bunch of 2-foot-tall Ewoks? That does not make sense! But more important, you have to ask yourself: What does this have to do with this case? Nothing. Ladies and gentlemen, it has nothing to do with this case! It does not make sense!

 

[Brian Stirling]

And over time robotics becomes a more developed field capable of producing better machines at a lower cost. Just because 20 years ago the caliber of machines to replace human workers didn't exist or if they did were cost prohibitive, does not mean that it will always remain such.

That Foxconn has essentially stated that it will begin using a larger number of robots in the assembly process suggests that its even cheaper than human labor. China will eventually get through its industrial revolution and emerge on the other side with a more modernized society that shares more similarities with the United States. Part of that process means that the supply of cheap labor is going to dry up.

Some companies will probably go elsewhere, but many will start using more and more automated processes.



The other definitions of flexibility that I found in news reports weren't nearly as bad.

One was the ability to find several thousand additional factory workers (i.e. people who wanted jobs there) overnight. Another was that it took significantly less time to find 8,700 engineers that Apple would need to oversee production. Don't know if that's really demanding more from the workforce so much as it is that China is a really big country and there are a lot of people looking for work, many of them in the same place.

I've been working in and around the automation and robotics field for 30 years and I think I know a little bit about it. I've designed, fabricated, assembled, and tested mechanical and electrical components involved with automation and robotics. I've programmed them as well. I know a little about the field...

If a US company needed an additional 1000 workers they'd only need to put out the word and then pick the 1000 best of the 10,000 that showed up!

If China has 8700 engineers just waiting around to be hired then how much do they have to pay them? I mean, if they were unemployed they'd work cheap --right? OTH, if they offer 20% more than others are paying they would no doubt get a lot of engineers that are already working to jump ship and join them. How hard would it be for a US company to find 8700 engineers here if they announced they were going to pay 20% more than anyone else?

Once again, the reason isn't flexibility as US workers are every bit as flexible as any workers. No, the real reason is cost -- total cost -- labor, work place safety and environmental.


Brian

 

[pm]

At our site we've had open reqs for months - actually I think it's been over a year now.
http://www.intel.com/jobs/jobsearch/index_adv.htm (click "all positions", click "united states", click "fort collins, colorado"). Almost half of these (11 out of 23) are entry-level. Clearly it doesn't come with a "20% higher salary than the other guys" logo, but we've had these openings in place for at least a year... I remember when they put them up. I don't think it's as easy to hire engineers as you are seeming to imply, Brian.

 

[Mopetar]

I've been working in and around the automation and robotics field for 30 years and I think I know a little bit about it.

And I know better than to bet against technology. Once upon a time someone who knew a lot about computers thought that the total world market for them could be shown with one hand, and there's the quote often (and likely mis-) attributed to another famous computer person that 640 kb should be enough for anyone. Both of these statements are generally regarded as foolish.

It may not happen overnight, but historically there's always been a tendency to replace human labor with machines. The vast majority of wealth and luxury that exists in the world right now because of this.

Once again, the reason isn't flexibility as US workers are every bit as flexible as any workers.

No they're not.

If said hypothetical company advertised for 1,000 jobs, how many of the 10,000 workers would live in the area or could move there immediately? How many would be able to start within the next day or two? Would the company even be able to start them in the next day or two or would HR processing take weeks if not months?

Even if they were offering to pay engineers in the U.S. more, could you find 8,700 who would give up their current jobs and move to China, which would probably be necessary in this case. American workers place a lot more value on things like family and living in a nice neighborhood. There are so many things that have become part of our culture that makes it almost impossible to emulate the Chinese. Also, their country seems to place a lot more emphasis on engineering degrees, among other career choices. There are a lot of fields in the U.S. where we need to hire engineers from out of the country because enough of our own population is pursuing other careers, so depending on exactly what type of engineers Apple needed, it may not have been possible to find that many in this country. Even if they did give them all a pay bump, we'd just need to import another bunch of engineers from outside of the country to replace the ones that Apple just hired.

 

[Brian Stirling]

And I know better than to bet against technology. Once upon a time someone who knew a lot about computers thought that the total world market for them could be shown with one hand, and there's the quote often (and likely mis-) attributed to another famous computer person that 640 kb should be enough for anyone. Both of these statements are generally regarded as foolish.

It may not happen overnight, but historically there's always been a tendency to replace human labor with machines. The vast majority of wealth and luxury that exists in the world right now because of this.



No they're not.

If said hypothetical company advertised for 1,000 jobs, how many of the 10,000 workers would live in the area or could move there immediately? How many would be able to start within the next day or two? Would the company even be able to start them in the next day or two or would HR processing take weeks if not months?

Even if they were offering to pay engineers in the U.S. more, could you find 8,700 who would give up their current jobs and move to China, which would probably be necessary in this case. American workers place a lot more value on things like family and living in a nice neighborhood. There are so many things that have become part of our culture that makes it almost impossible to emulate the Chinese. Also, their country seems to place a lot more emphasis on engineering degrees, among other career choices. There are a lot of fields in the U.S. where we need to hire engineers from out of the country because enough of our own population is pursuing other careers, so depending on exactly what type of engineers Apple needed, it may not have been possible to find that many in this country. Even if they did give them all a pay bump, we'd just need to import another bunch of engineers from outside of the country to replace the ones that Apple just hired.

Automation in a manufacturing/assembly setting is not just about the the servos and controllers but also about the engineering to design the many systems that will ultimately be made in relatively low volume. The component cost is but one line item and not the biggest one.

Back when Silicon Valley was going bang busters when a new startup went public they offered more than the going rate in order to get talent. And talent left hundreds of the companies in the area to fill the ranks of the new company. This is not so easy to do now a days in the USA because many of those jobs no longer exist in Silicon Valley or anywhere else in the USA as they've largely been moved to China and other places with low costs. Semi-conductor production, the Silicon in Silicon Valley, in particular is all but gone from California -- again, the reason is cost.

There is an ongoing demand from US companies to expand the import of engineers and others because, as they say, they can't find engineers here. They also claim the imported ones are smarter than domestic ones. It is interesting to note that almost all of the engineers that are imported come from places like India and China and very few from places like Germany or England. Perhaps the Germans and English are also less smart. Perhaps the reason they come from India is they're cheaper.

We are several decades into the current economic era -- an era in which cost is king. This is not the way business always worked. Before this era you heard phrases like "if you build a better product people will beat a path to your door," but today this is mostly not true. People beat a path to the lowest cost product even when the real cost is often greater. Another phrase that used to be taught in business schools was "if you do a better job you will have a job for life." This last one has died big time as no matter how hard or good you are if someone can be found for 20% less, or 95% less, then your job is no more.


Brian

 

[PrayForDeath]

I wonder how much apple products would cost if made in the usa. Probably 300% higher than their high-pricing as it is now.

Steve jobs said at one point that manufacturing the iPad in the states would add $35 to the final price.

 

[Brian Stirling]

Steve jobs said at one point that manufacturing the iPad in the states would add $35 to the final price.

Sounds about right and in line with the 3%-15% I mentioned earlier. By my calculation $35 amounts to about 5% on average.


Brian

 

[elitejp]

i hate reading this crap about slave labor in other countries. After living overseas for over 11 years ive realized america and especially colleges love to talk about stuff they have no idea about. Where i currently live most expats make about 5000yuan a month which is about 750 us dollar and not a single expat is lacking in there day to day needs. I will tell you another thing I have a friend who swears that she can live better here and save more money every month to pay off her US debts (mainly college debt) than if she was in the states making her 3k a month or whatever. So im sorry to burst your bubble that america and other countries run sweat shops in China. The real fact is that these sweat shops are extremely coveted due to the good pay and good working conditions. Now local businesses run by locals are a different story.

 

[Brian Stirling]

i hate reading this crap about slave labor in other countries. After living overseas for over 11 years ive realized america and especially colleges love to talk about stuff they have no idea about. Where i currently live most expats make about 5000yuan a month which is about 750 us dollar and not a single expat is lacking in there day to day needs. I will tell you another thing I have a friend who swears that she can live better here and save more money every month to pay off her US debts (mainly college debt) than if she was in the states making her 3k a month or whatever. So im sorry to burst your bubble that america and other countries run sweat shops in China. The real fact is that these sweat shops are extremely coveted due to the good pay and good working conditions. Now local businesses run by locals are a different story.

By expats you mean folks that lived or went to school in the west then returned to China -- is that right? If so the trained and higher skilled workers would earn more than the average for one thing. But, if you think the average US engineer makes $3K/month your not even close -- probably closer to $5K or more.

How many hours/days per week do the expats work? How many hours/days per week do the assemblers work?

Sorry to burst YOUR bubble!


Brian

 

[MaxFusion16]

By expats you mean folks that lived or went to school in the west then returned to China -- is that right? If so the trained and higher skilled workers would earn more than the average for one thing. But, if you think the average US engineer makes $3K/month your not even close -- probably closer to $5K or more.

How many hours/days per week do the expats work? How many hours/days per week do the assemblers work?

Sorry to burst YOUR bubble!


Brian

hmm......he's living in china, and knows the conditions first hand.

have you even been to China?