Apple to Contribute Toward Costs of Improving Working Conditions at Foxconn Facilities

Reuters reports on comments from Foxconn chief Terry Gou, who claims that Apple and Foxconn will be splitting the initial costs to improve working conditions at Foxconn's facilities in China.

"We've discovered that this (improving factory conditions) is not a cost. It is a competitive strength," Gou told reporters on Thursday after the ground-breaking ceremony for a new China headquarters in Shanghai.

"I believe Apple sees this as a competitive strength along with us, and so we will split the initial costs."

It was unclear if the split would be 50/50 or in some other ratio.

ipad assembly foxconn
Foxconn workers assembling iPads (Source: Rob Schmitz/Marketplace)

Foxconn has raised wages several times over the past couple of years as it has faced scrutiny over the treatment of its employees. And following a series of audits, Foxconn and the Fair Labor Association reached an agreement in late March to reduce overtime while boosting compensation packages to compensate for the reduction in hours.

It is unclear how much the actions are costing Apple and Foxconn and how the costs are being split, but with Foxconn operating on a very slim profit margin it has limited ability to finance such improvements without raising costs for its customers or receiving direct support from Apple to assist with the changes.

Top Rated Comments

Small White Car Avatar
119 months ago
Non-rhetorical question: Why does Apple not just buy Foxconn? Apple could buy Foxconn, strengthen its supply chain, stop paying the Foxconn profit margin, and prevent Foxconn from being a manufacturer for rivals. Maybe I'm overlooking something obvious.

Foxconn is huge and has many other clients.

It would be like someone buying the entire McDonalds corporation just to make and sell the french fries.
Score: 21 Votes (Like | Disagree)
gregwyattjr Avatar
119 months ago
I still don't understand why people are spitting venom at Apple in regards to their factories when there are other factories far far worse.
Score: 17 Votes (Like | Disagree)
zzLZHzz Avatar
119 months ago
I still don't understand why people are spitting venom at Apple in regards to their factories when there are other factories far far worse.

people are jealous of their record profit.
Score: 7 Votes (Like | Disagree)
whooleytoo Avatar
119 months ago
Nice touch, considering Apple didn't HAVE to do this.

Seems like Apple's influence (even if it is being 'forced' by negative press) is having a positive effect on the local workforce & working conditions. I guess that shows the real benefit of being there; rather than avoiding countries with - to Western viewers - negative, oppressive work practices.
Score: 6 Votes (Like | Disagree)
linuxcooldude Avatar
119 months ago
Because Apple agreed to be their client. It's kinda like being friends with a guy who beats his wife. There are probably many other companies that could supply the parts Apple needs that treats its employees better. Sure, it may cost a bit more, but a better reputation may be worth it. Plus, with Apple's halo effect, many people will still pay for Apple products regardless of price.

Because China needs to be responsible for its own mess, not someone else. If some some Chinese man is beating his wife, don't call Apple, the local police will do fine.
Score: 4 Votes (Like | Disagree)
Krazy Bill Avatar
119 months ago
Some of you guys are hilarious.

If you want "good" to be done, get out your checkbooks and make it so. Personally, I don't invest in a company and expect the tree-huggers and whale-savers to spend my money without some kind of a return. I'll decide charity on my own - like it should be.

Blame China for Foxconn's problems.
Score: 4 Votes (Like | Disagree)

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