Tuesday, September 25, 2012

Foxconn Riots and iPhone Production

This week we read about increasing manufacturing costs in China and how they connect to iPhone production. As it turns out, this topic is very timely. The latest iPhone was released late last week and, just yesterday, major riots broke out at a major iPhone assembly plant in China.

Roughly 2,000 employees rioted at a Foxconn plant in Taiyuan, China. Ten people were killed, dozens were injured, and five thousand police officers were brought in to quell the riot after gang members joined the fray. So when this week's article mentioned "worker unrest" as a part of increasing labor costs in China, you might want to think of that as a more serious concern.

Foxconn is currently producing the aluminum backing for the iPhone. The company was expected to resume operations today, so the effect on production is probably minimal. Nonetheless, this is an important and current case that highlights the sometimes shaky balance between having low costs, maintaining security, and managing labor issues. The Foxconn plant "is notorious for its strict overtime requirements, which are reportedly forced upon it workers, although the biggest complaint has been about the abusive security personnel, which is said to be the cause of Sunday night’s riot." Is the effort to control costs and produce efficiently worth the oppression of the involved work force? The answer seems to be yes, although we like to pretend that we're offended. Ask yourself an honest question: do situations like this stop you from buying the final product?

[1] Hauk, Chris. "Report: Riots Break Out at Foxconn Factory - 10 Reported Dead." MacTrast. Accessed 9/25/12. <http://www.mactrast.com/2012/09/report-riots-break-out-at-foxconn-factory/>

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