Next-generation iPhones likely to focus on internal improvements.
Former Apple Executives Address Working Conditions in Suppliers' Factories
Some former Apple executives say there is an unresolved tension within the company: executives want to improve conditions within factories, but that dedication falters when it conflicts with crucial supplier relationships or the fast delivery of new products. [...]Apple is far from the only company experiencing such tensions, but has been receiving the most publicity due to the popularity of its products and its booming financial results.
“We’ve known about labor abuses in some factories for four years, and they’re still going on,” said one former Apple executive who, like others, spoke on the condition of anonymity because of confidentiality agreements. “Why? Because the system works for us. Suppliers would change everything tomorrow if Apple told them they didn’t have another choice.”
Apple details its efforts on monitoring supplier responsibility in an annual report, outlining hundreds of audits it conducts to check for compliance and the steps it has taken to remedy issues discovered as part of the process. But sources note that while Apple routinely threatens companies with a loss of business if issues are not addressed, the company in practice has tolerate continued issues because it frequently has few alternatives in its supply chain.
“If you see the same pattern of problems, year after year, that means the company’s ignoring the issue rather than solving it,” said one former Apple executive with firsthand knowledge of the supplier responsibility group. “Noncompliance is tolerated, as long as the suppliers promise to try harder next time. If we meant business, core violations would disappear.”The highest-profile issues at Apple suppliers have involved a number of suicides at Foxconn's facilities and separate explosions at Foxconn and Pegatron facilities last year that together resulted in four deaths and 77 injuries.
Apple has over 150 suppliers contributing to its products, many of them located in China and other Asian countries where workers are plentiful and wages low in comparison to other regions of the world. Last week, The New York Times detailed how the U.S. has been unable to compete with China for production of the iPhone and other devices as factories in Asia have proven to be considerably more flexible in their ability to scale production up and down and have become the location for nearly the entire supply chain.
But while the economics and logistics of manufacturing in China bring Apple speed, scale, and costs that are unmatchable in the United States, the company finds itself struggling to deal with the human factor that has become increasingly visible alongside Apple's rise to prominence.