A Chinese View of iPod City

(Macworld UK)  Inside Apple's iPod factories.  June 12, 2006.

Apple's iPods are made by mainly female workers who earn as little as £27 per month, according to a report in the Mail on Sunday yesterday.

The report, 'iPod City', isn't available online. It offers photographs taken from inside the factories that make Apple music players, situated in China and owned by Foxconn.

The Mail visited some of these factories and spoke with staff there. It reports that Foxconn's Longhua plant houses 200,000 workers, remarking: "This iPod City has a population bigger than Newcastle's."

The report claims Longhua's workers live in dormitories that house 100 people, and that visitors from the outside world are not permitted. Workers toil for 15-hours a day to make the iconic music player, the report claims. They earn £27 per month. The report reveals that the iPod nano is made in a five-storey factory (E3) that is secured by police officers.

Another factory in Suzhou, Shanghai, makes iPod shuffles. The workers are housed outside the plant, and earn £54 per month - but they must pay for their accommodation and food, "which takes up half their salaries", the report observes.

A security guard told the Mail reporters that the iPod shuffle production lines are staffed by women workers because "they are more honest than male workers".

The report also explains that the nano contains 400 parts, and that its flash memory is the most expensive component. The report looks at several salient components of the nano, and describes the product as a reflecting the global way business works today. This is because the iPod nano contains parts developed by technology companies from across the planet.

Apple is just one of thousands of companies that now use Chinese facilities to manufacture its products, the report observes. Low wages, long hours and China's industrial secrecy make the country attractive to business, particularly as increased competition and consumer expectations force companies to deliver products at attractive prices. 

Update, June 14: Since this report, Apple has issued a statement regarding the Mail's claims. The company refers to its code of practice for suppliers and says it is investigating the claims. Apple's statement is available Here.

(AppleInsider)  Photos: inside Foxconn's "iPod City".  June 16, 2006.

A pair of photos published earlier this week by the UK's Mail on Sunday appear to portray substandard work environments within Chinese manufacturing facilities that build versions of Apple Computer's popular iPod digital music players.

One photo shows a dormitory within E3 -- a Foxconn-owned manufacturing facility responsible for churning out iPod nanos -- packed tightly with cots and lined with wash buckets, lockers and clothes lines.

Yet another photo appears to show employees lined on one of the factory's roof tops as they prepare to begin work for the day.

"Every morning the workers, in beige jackets to denote their junior status, are taken up to the factory roof for a military-style drill," the Mail reported in its article, titled "iPod City."

Foxconn, also known as Hon Hai, is one of the world's largest IT companies. The Taiwanese company has been contracted by Apple to build products such as iPods, AirPort Express base stations and desktop computers.

According to the Mail, Foxconn employs a "million-strong" staff and is currently investing $57 million in factories in Beijing and Suzhou that will "take advantage of China's cheap workforce."

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Who knows what is going on here?  Who can you ask?  Of course, you could try the 'human search engines' inside China who can find out about anything that you want to know.  In this case, the reporting was done by a couple of writers/reporters who managed to talk to more than security guards (Mail On Sunday: "The guard is virtually the only person we interviewed in the communist run country who understood the implications of China's cheap labour force.").

(Tianya Forum)  Foxconn workers: As little as 340 yuan a month and 700 persons living in one house.  NetEase Technology Report.  By Zhang Juan and Li Qiang.  June 19, 2006.

[in translation]

There is a story about the living conditions of female workers at the Chinese factory that assembles the Apple iPod.  This has shocked anyone who cares about the Apple iPod.  The workers work 15 hours a day for a 300 yuan salary.  Is this what the assembly workers earn from the lovely and fashionable iPod?  As the principal of this incident, the Apple iPod assembly manufacturer Foxconn has been "forced" to break its silence.

"An earthquake occurred at Apple, and Foxconn was the victim."  At the June 16 afternoon press conference, Foxconn vice-president and general manager Li Jinming categorically described the media reports: "This is made up by the competitors of Apple, so that people think that this is an inhumane occurrence in an inhumane nation."  He emphasized that Foxconn pays all its employees wages in accordance with the law and no less than its competitors.

(Entrance to the southern gate of the Foxconn production base in Shenzhen)

Foxconn is the third largest electronics manufacturer in the world.  The technology park in Longhua, Shenzhen is the largest assembly base in the world for computers, communications and consumer electronics.  The Apple iPod is assembled here by Foxconn.

Foxconn vice-president guaranteed to the media: "Foxconn does not pay any employee less than 580 yuan (the guaranteed minimum wage outside the Shenzhen Special Economic Zone)!"  As for "a monthly salary of 27 British pounds (=340 yuan)," he said that it was incredible.  "This is too far out!"

Foxconn vice-president Li Jinming

After the press conference was over, this reporter declined the offer of a ride provided by Foxconn to the train station and went instead to speak to ordinary workers in the technology park.  He heard a completely different story.

Little Zhang got off work at 5pm from the production line at the mobile telephone assembly plant.  He was sitting in a Foxconn District C garden and trying to figure out how much money he made last month.  "On our production line, the base salary is 490 yuan per month."  Although he knew that Shenzhen City has stipulated that the minimum wage outside the Special Economic Zone is 580 yuan per month, Little Zhang could not do anything.  "If you want to make more, you work overtime.  But there are fewer orders nowadays, and we have no overtime work for some time already."  Little Zhang told the reporter that he hates rest days the most.  If there are no orders, the workers are forced to rest for which 60 yuan will be deducted from the overtime pay.  If the overtime payment is used up this way, they will take it off the regular salary.  "There was one month in which I was cut down to 340 yuan!"  As for "rest day = withholding pay," Little Zhang and his co-workers think it is unreasonable but they don't feel that they can do anything about it.  "Sigh!  I had to rest six days this month."

At the press conference, Li Jinming said the claim that "workers make only 300+ yuan per month" as being "extremely distorting."  He said that Foxconn adheres fully to the labor regulations, and the minimum wage for an ordinary worker is 580 yuan (not including overtime pay), which will be adjusted to 700 yuan after this July.  The workers receive 10 yuan in meal subsidies and are entitled to free board and laundry.  After being hired, each employee will be given a free physical examination each year.  The company also pays for social security and medical insurance for the workers.  He claims that other companies will be hard-pressed to provide the same level of benefits to their employees like Foxconn does.

The community health center at Foxconn

"There are more and more people getting off work at 5pm," said Little Zhang with sorrow as he looked at the people on the road.  Getting off work at 5pm means no overtime, and this is a depressing thing for Little Zhang.  "When I joined Foxconn in 2004, those were good days for the first two years."  When Little Zhang thought about the overtime work, his spirit was lifted.  "At one time, my highest monthly wage was 1,600 yuan."  "In those days, I could work three hours of overtime per day.  With two more days on the weekend, the wages rose up."  Little Zhang counted with his fingers.  "Saturday and Sunday are for double pay, at 6.70 yuan per hour.  On both days, we worked 11 hours, so that we made more than 100 yuan."  In Little Zhang's view, that is a very good wage.  When the writer asked whether continuously working like that for one or two months would be physically impossible to cope with, he impatiently rubbed his thumb and index finger together and said, "Who cares as long as the money is there!"  He said that he did not know why the orders began to decrease this year and he has made only 400 to 500 yuan per month for several months already.  "Two hundred yuan for rent, and I have to pay for my own meals on weekends.  I have to call home.  This is not enough."

Foxconn workers eat at the company cafeteria

Little Zhang was hungry now after 6pm, but he probably did not want to eat at the cafeteria because Friday nights are not included.  Little Zhang is quite satisfied with the food at the company cafeteria.  "They have chicken thighs, fish, milk, everything.  And it is free during working hours."

A dormitory building in the Foxconn technology park
(Commentators said that this one is reserved for Taiwan ex-patriates)

The outside view of a Foxconn "Peace Dormitory" (each floor is one large open space)

The night view of the same "Peace Dormitory"

Even as the wages are falling, Little Zhang still is renting his own place outside with his own money instead of staying at the Foxconn dormitory ("all workers are provided with free food and board").  This writer was perplexed.  "I am going to tell you about how many people live in one room and that will absolutely shock you -- 700 people!"  His eyes opened wide as he uttered this last number.  "When I first entered the place, I was really shocked.  It was summer, and the body stench was unbelievable."  When he thought back about the experience, he was still scared.  "The first day I got there, I lost my pillow.  On the second day, I lost a pair of blue jeans.  On the third day, I lost my mobile phone.  On the fourth day, I moved out."  He thought that it was unbearable to live in that kind of place.  He said that about 40% to 50% of the assembly line workers rent their own place outside.

Little Zhang told this writer about the name of the dormitory.  The writer got in a car and found the Foxconn "Peace Dormitories" after more than 20 minutes.  This was a cluster of at least a dozen buildings all of which were Foxconn dormitories.  The security was tight at each dormitory, so it took the writer some effort to get into a four-story dormitory.  The writer did not find any 700-person room, but the scene was still just as shocking.  From the door, the writer saw a dense row of double bunker beds.  Even though there were five big windows and fans, there was still a strange smell emanating from the inside.

(Foxconn "Peace Dormitories" Building A 2nd floor (abnormal photography conditions)

(Foxconn "Peace Dormitories" Building A 3rd floor (abnormal photography conditions)

In this dormitory, three beds formed one row, and the rows were very close to each other.  On one side of the room, there were at least 24 rows, for a total of 72 double bunker beds.  On the other side of the room, there was an equal number of beds.  So about 300 people live in this dormitory.  There are at least four similarly structured dormitories in the "Peace Dormitories" courtyard, with four stories each.

At the press conference, Li Jinming mentioned the living conditions of the workers.  He admitted that there "was actually situations in which more than 100 people live in a dormitory," but very few workers live in those kinds of dormitory.  In the Foxconn Shenzhen base, 120,000 workers live outside the factory area.  On one hand, they have some difficulties in solving this problem.  On the other hand, considering worker health and safety, the large dormitory rooms have better ventilation and are easier to administer, so that workers cannot overuse the electric appliances to cause fires.  Li said that there are no dormitories with more people than that, and the company is actively trying to solve the problem.

7pm.  Nightshift workers line up for the buses go from the Foxconn "Peace Dormitories" to the factory 
(abnormal photograph conditions)

Several hundred new workers being brought to the Foxconn "Peace Dormitories" courtyards 
(abnormal photography conditions)

At after 7pm, as the writer was leaving the Foxconn "Peace Dormitories", he encountered three to four hundred young persons not dressed in Foxconn uniforms being brought into the courtyard.  From their dress and shy looks, they appear to be newly hired assembly line workers.

At about the same time that the Foxconn Group held their press conference in Shenzhen, the Apple Computer (China) spokesperson said that Apple Computer has read about the "iPod assembly factory Foxconn exploits workers" report and takes it seriously by sending investigators out to Foxconn.  She said that Apple Computer's practice is to guarantee that its supply chain has safe working conditions and respects the workers.  If a factory cannot fulfill these requirements, Apple Computer will cancel the contract.

Foxconn vice-president Li Jinming said that Apple Computer has contacted Foxconn, but the details are not known.  With respect to this writer's question of "whether Foxconn would lose the right to represent Apple Computer," Li said that there is no reason for Apple Computer to cancel the contract at this time.  The number of production orders has been in decline and Foxconn was forced to adjust the worker salaries and this was a source of worker discontent.

But it cannot be denied that compared to many smaller factories, Foxconn offers more benefits to its workers.  The low wages at Foxconn are a reflection of the tens of thousands of Chinese manufacturing factories that compete for contracts in the international market.  "Manpower Capital" chief editor Sun Honggang said that it is uncertain whether the European Union would invoke SA8000 to sanction iPod or Foxconn's other products.  All business people know that the SA8000 is actually a form of trade barrier that is used to attack some groups while protecting other groups.  But it is always a bad thing to be attacked by the media on account of "corporate social responsibility."  Many Chinese enterprises are suppliers for overseas companies and they ought to take these problems seriously.  But, apart from low costs, what advantages does the Chinese manufacturing industry have internationally?

(New York Times)  Apple Finds No Forced Labor at iPod Factory in South China.  By John Markoff.  August 18, 2006.

Apple Computer said Thursday that it had found no evidence of forced-labor conditions at a Chinese factory that makes iPod digital music players.  But it said that a company investigation found several violations of Apple’s code of conduct and that the supplier, Foxconn, was changing its practices as a result.

Apple sent an audit team to a Foxconn factory this summer after The Daily Mail of London reported forced labor and other sweatshop working conditions in Longhua, a suburb of the southern city of Shenzhen, where iPods are manufactured.

Apple said a team from its human relations, legal and operations staffs interviewed 100 randomly selected workers and reviewed thousands of documents including personnel files, payroll data, time cards and security logs. The group inspected more than a million square feet of factory space, the company said.

“We did find that the weekly limit on hours worked was exceeded 35 percent of the time, and so the supplier is changing its policy as a result of the audit,” an Apple spokesman, Steve Dowling, said. Apple said it limits the workweek to 60 hours, with at least one day off.

The Apple report, available on the company’s Web site, noted: “The team reviewed personnel files and hiring practices and found no evidence whatsoever of the use of child labor or any form of forced labor. This review included examining security records targeted at discovering false identification papers — an important check for companies serious about preventing illegal employment of any kind.”

Foxconn is the trade name for Hon Hai Precision Industry, a Taiwan-based company whose customers include Intel, Dell and Sony. The Foxconn manufacturing center in Longhua employs 200,000 workers, with Apple using about 15 percent of them, the report said.

The Apple team found that two dormitories used to house workers in the factories had a large number of beds and lockers in an open space and “from our perspective, felt too impersonal.”  Apple said Foxconn was now acquiring land to build additional dormitories.  It also said that it had found two instances of employees being disciplined by being forced to stand at attention, and that it had initiated a manager and employee training program to reinforce a “zero tolerance” policy toward harsh treatment.

Apple said it had engaged Verité, a nonprofit auditing and research organization that monitors work conditions, to track the situation.