After Labor Audit, Apple Manufacturing Partner Foxconn Promises Reform

With the global business community watching, the company commits to wage increases, workweek limits

   
After Labor Audit, Apple Manufacturing Partner Foxconn Promises Reform

This time will be different, says Apple (NASDAQ:AAPL) manufacturing partner Foxconn (PINK:FXCNY), which has responded to findings from audit by promising to curtail working hours and increase wages in its plants in China.

Foxconn’s vow to improve labor conditions follows a lengthy inspection by a monitoring group, Fair Labor Association, which in a report released Thursday said it found at least 43 violations of Chinese laws and regulations, and, a recent New York Times post noted, numerous instances where Foxconn defied industry codes of conduct by having employees work more than 60 hours a week, and sometimes more than 11 days in a row.

FLA inspections cover three Foxconn facilities. Among those included in the group’s survey of more than 35,000 employees, 43% said they had experienced or witnessed accidents. Almost two-thirds said their compensation “does not meet their basic needs” and was not adequate to pay for health care for education. The FLA report stated that Foxconn workers at one plant start at about $285 a month, while average wages are about $426 to $455 per month.

Although the cost of the promised wage increases and other reforms are not yet known, the Times points out that they could significantly impact working conditions throughout China and increase retail prices for products made there. In addition to Apple, Foxconn’s clients include Amazon (NASDAQ:AMZN), Dell (NASDAQ:DELL), and Hewlett-Packard (NYSE:HPQ). The company makes more than 40% of the world’s electronics and is China’s largest and most prominent private employer, with 1.2 million workers.

Foxconn, which is involved in the production of iPhones and iPads, vowed to improve labor conditions after an audit in 2006, but whatever changes the company may have made didn’t meet legal standards or Apple’s “Code of Conduct” regarding labor practices, particularly those regarding weekly overtime limits. Now that Foxconn has attracted considerably more media attention for its labor practices, it is under commensurately more pressure to make good on its promises.


Article printed from InvestorPlace Media, http://investorplace.com/2012/03/foxconn-responds-to-labor-audit-with-promises-to-reform-aapl-fxcny/.

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