Foxconn explosion has broader impact than Apple iPad supply
The short-term impact of the recent Foxconn explosion will be a longer wait time for a new Apple iPad. But longer term, the impact of this accident may be much further reaching.
As has been well reported, an explosion occurred this month at Foxconn’s manufacturing plant in Chengdu, China, a plant that plays heavily in the Apple iPad supply chain. IHS iSuppli this week estimated that the explosion could result in a production loss of 500,000 Apple iPad 2 tablets in Q2 (equal to total iPad 2 monthly production capacity at the site), should the explosion results in a production shutdown until the end of June.
Foxconn has stated that the explosion will not delay its iPad production in Q3, but that estimate hinges on a return to full production pending the results of an investigation.
Yet, the blow to iPad supply may be the tip of the iceberg when it comes to the impact of this accident. Reports claim that the explosion was caused by combustible dust, which gathered at the dust collecting pipe in one of the polishing workshop. The US Occupational Safety and Health Association (OSHA) reported in 2006 that 119 people had been killed in this country over the last 25 years by combustible dust-related accidents. 700 more had been injured.
The explosion investigation may show poor housekeeping by Foxconn as the cause. But with three employees killed by the blast and the event getting so public attention, China’s government, as well as other governments, may crack down on combustible dust. New production regulations may come into force, impacting manufacturing in various ways, possibly seeing some electronics plants shut down until regulations are met.
Then there’s the overarching question of corporate responsibility. Is Apple — this mega company based in the US with huge worldwide name recognition and influence — responsible for workplace conditions at its partner companies? This is a question that has been raised before and repeatedly, particularly when in 2010 several Foxconn employees committed suicide and blame was put on workplace conditions. And, if Apple takes corporate responsibility in any form, what type of precedent does that set?
What do you think? Share your thoughts below.
blahnston commented:
The Chinese government is responsible for auditing these sights for safety and compliance with labor laws. If they don't do this, competing contractors will shave costs until they end up with children working 14 hour days in really bad conditions. The real problem is: what if the Chinese government is not really doing it's job? What if they are so pro-growth and pro-Apple that they are turning a blind eye to these dangerous conditions? That should be the subject of the next article in my opinion.
mathman commented:
As long as Americans demand high wages and low prices China et al. will be building our products. Just something to think about. It IS a form of slave labor, but it's "not in my backyard". Seems like we should be working toward competitiveness with the world.
Professor commented:
The problem is simple, when dust is formed it is electrically charged. When charged dust gets near a grounded pipe or wall a spark occurs and the explosion starts. This has been "well known" to scientists for some 150 years, I gave a paper on it at a dust conference about 30 years ago. It was ignored, but I still have a copy if you want one.
The solution is to have a very light water spray of the opposite charge. The water is attracted to the dust and down it comes. We developed the spraying nozzle and tried it in industry. It worked very well and companies wanted to buy the units but no-one wanted to make them.
The net result is that we still have dust explosions.
Prof. Stuart A. Hoenig, Emeritus
DonP commented:
In your June 23 follow-up article, you said "And still other readers place partial responsibility on consumers". What???? You got to be kidding!!! Since when does consumer demand for a product enter in to the equation for blame regarding work place neglect? Why don't people take responsibilty for their own screw ups? And who are these "other readers" that you refer to? Is "other readers" code word for "idiots"?
history commented:
On the 100th anniversary of the Triangle Shirtwaist fire, we are still debating whether workplace safety is a right. And just as the owners of the factory were found not guilty, we debate "corporate responsibility" as more workers die. Shame on us.
PeterSt commented:
USA safety regulations for China serve the same purpose for the USA that safety regulations do in the USA for big business In the USA big business (for example, GE) supports tough regulations behind the scenes because big business has the size and infrastructure to deal deal with the bureaucracy while their smaller competitors do not. Don't accuse me of being a conspiracy theorist, I used to work for GE and observed this anti-competitive tactic first hand.
For nations these regulations are called "non-tariff barriers to trade". The regulations slow down developing nations in the same way that they slow down startups in the USA and protect the fat cats. Keep their economy struggling so we can continue to enjoy a higher standard of living than they have.
Of course one cannot be critical of any regulation that improves "safety" even though the cost of enforcing the regulation may be out of all proportion to the benefits accrued. A good example is the recent food safety legislation whose primary benefit is to big agriculture (e.g. ADM) and the tort bar.
Steve commented:
Our FTC simply doesn't care. British Petroleum had several OSHA safety fines at its Texas refineries, now appealing because evidence and witnesses blew up. There are rules about flammable dust, it was mentioned in an article about an exploding sugar silo a few months back. Grain silos used to blow up more frequently but now there are best practices. One is to regulate humidity. Other is to take steps to minimize static electricity. Both are important to quality production of electronic components. Suppose Jobs beleives Americans will buy a piece of junk if it has the Apple name on it.
joe commented:
I don't believe that the consumer is to blame unless they have clear knowledge of the bad behavior prior to making a purchase. Do you know who picked your coffee beans, made your shirt, or dug the lithium for your cell phone battery? I expect U.S. suppliers of goods and services to be responsible for their manufacturing, delivery, and supply chains and they are not abstracted from the deeds committed while delivering their profit dollars.
Long time CM manager commented:
To all that say that outsourcing the manufacture also outsources the responsibility, that's very short sighted. Could you say the same if it's blood diamonds or conflict zone materials? I buy it legitimately so I don't care what happens beyond? No you can't.
Loftyideals commented:
It really doesn't matter who SHOULD be responsible for these conditions, if Apple consumers start boycotting these products market forces will dictate.
chem commented:
From a recent article in Chemical & Engineering News, OSHA in the US has no combustible dust standard that it enforces either. This is not a poor government regulation issue that occurs only in China. That factory could have been in LA or NY.
Greg commented:
I can assure you that it is not a matter of Apple handing over some drawings and saying "Make us 30,000 a week." Most definitely, Apple engineers visit the site, often and do have say as to how some processes are carried out. The fact that many of Apple's products are overpriced here in the US makes these events ever the more disgraceful.
ThinkTank commented:
Well Apple, what can Apple to help? Apple should compensate Foxconn employees for making Apple's dream reality. With the price Apple is selling N. America, 5% of the profit to all oversea employees would help their lives but of course those greedy share holders would not like it.
Shahrokh commented:
Just hire the cheap labor, minimum investment in working conditions, sell the final products in the West, maximize your profit and laugh all the way to the Bank. This is not rocket science any more it is modern day slavery. In the mean time, we have lost our industrial bsse, Government ( Federal, State and Local) have been expeiencing loss of revenue, then they continue to spend and add to the deficit, the rest is obvious. It is a lose lose solution, for the whole country. Now if the actual savings was passed to the consumer, that would have been slightly different, but still not a smart idea, and very short sighted.
It should be completely made in United States, so the workers pay taxes and we do not have these massive deficits
Human Rights commented:
I've been to China over a dozen times. I've seen the dirty grey skies, the filth on the sides of the roads, the hordes of bicycles clogging the streets in all lanes and all directions, the squalor that the locals live in, the "professional women" working in all the hotels, the young women with babies in their arms selling CD's and DVD's of themselves on the street corners of just to make a living. Yes, it's a wonderful life that the rank and file are living. I'm glad that some of you are enamoured by the street life parade working for "market" wages in all forms of "work". I too worked in the Silly-con valley from '78 to '89 and don't remember it being quite the same. I remember hiring bonuses to change jobs, biplanes flying low over Central Avenue advertising job opportunities, founders' stock grants, reduced cost stock purchase plans, stock options, wages >$100k/year, etc. Frankly, it's not quite the same in China.
Mike J commented:
I have worked at factories in Shaghai and Chengdu. This week I am working near the Foxconn building. At least in my area of expertise, assembly and test of semiconductors, the conditions are no different than what I saw in the 80's in Silicon Valley. It is basically skilled labor at the market price for labor. The employees do not seem unhappy in the least. They have well cooked meals, breaks, and jeez, a nap! How many of you get a nap at work? People talk about Foxconn as if they build iPads. And iPad is produced by a huge world wide supply chain. My understanding is Foxconn only does the final assembly, which is less than 10% of the total cost. It is done in China because that is the most labor intensive step, and China is where skilled labor is found at a low price. When I was a kid, people used to complain about low cost farm jobsnperformed by minorities. My dad used to say, have you ever seen one of those complaining white boys pick cantaloupe? No, they just complain. Then fact is, China has a billion people to feed, and they are modernizing. The west has already been through this phase and can sweep the ugliness unsolder the carpet. From what I have seen, in general what China is doing is great for them and for the west. One should be a bit careful to judge by modern western standards as if by fiat they can bypass the challenges of modernization. If you are really worried, fly on over and see for yourself. I think what you will really discover is that America has grow lazy, and China is rising.
Human Rights commented:
Apple is one of the biggest human rights abusers on the planet due to their use of indentured servitude employment techniques in China to manufacture their products. Foxxconn employees were throwing themselves out of upper story windows at the plant a year or so ago. Then Foxconn installed nets to catch and recycle these trained workers back to their work stations. Steve Jobs et al should be prosecuted in the Hague for crimes against humanity.
Aaron Applebaum commented:
People in the USA do not understand that for the Chinese the working conditions in Foxcomm plants are very good. Most people are very happy to have the job. Talk about "slave labor" is simply ignorence on the part of Americans. In fact in some aspects the working conditions in China factories are better than in USA factoriesw. How many USA factories have a two hour time off for lunch and a nap in the middle of the day?
ArekZ commented:
If Foxconn makes Apple products for almost nothing and Apple sells the for a lot, someone must make a lot of money here. And I suppose these are not the Foxconn employees/slaves (delete as appropriate).
Here my guess is that there was a problem (e.g. causing production delays) and someone from the middle managements was seriously stressed by this and committed not a "human suicide" but a "factory suicide". Knowing about the dirt and the similar cases, one match is enough to cause all this ... and noone will find out about it.
dreamer commented:
I believe both Apple and Foxconn is responsible. If the unsafe working condition in Foxconn is make known to Apple, Apple should have taken action to either demand Foxconn to meet requirement or source for another vendor...but we don't live in that world. The world we live in is about bottom line. If Apple and foxconn were to comply with all the requirements but the price of ipad2 is 10x more expensive, would we the consumer understand their moral initiative and keep buying their product? Seriously....
DrThrottle commented:
Point 1.) If the Workplace health and safety rules/laws, and the environmental laws, and the worker benefits laws we have were put in place and enforced elsewhere in 'low cost world, the majprity of the cost advantage would disappear, especially when you add the logistics/shipping, long distance supply chain management, and quality assurance costs
2.) Increasingly, the manufacture of goods, including Apple Products, can be done automated
3.) Liability for a work place accident to customers of that company means we all are liable for a lot of things that we have no awareness or control over, do you want to INCREASE the amount of lawyers' consumption of the US GDP for something that legitimately is out of the control and awareness of you and I or various companies?
4.) This is what we get for all of what is claimed to be the necessity of 'free trade' - countries like CHina that put heavy import tariffs on our goods, and then use our open doors to supply what has often not only been poor quality goods, but dangerous and unsafe, as well as copied/stolen ones - where we have taught them how to steal and cheat us. We should be very careful about assessing the trade playing field for the total cost. the founders of this country did not believe in income tax, they believed in property tax and tariffs on imported goods.
Concerned commented:
What can you expect from a country where nets are placed outside hi-rise worker hostel windows to catch workers attempting suicide
Mohan commented:
Yes Apple should be responsible on what happen at there subcon - If all US companies were to behave like Apple, how could we preach to the world on our moral values.
mg commented:
It is the customer (end user) who is to be held accountable. We want our cheap Walmart/big box store type pricing and as such we ship our jobs offshore to a foreign land where employee concerns are sacrificed for the all mighty dollar. If you want to hold Apple and ultimately Foxconn accountable, don't buy the Apple product (bet you can't stop).
reality commented:
If Apple is responsible, then all who purchase the item would in a way be responsible too.
Apple picked a questionable company. We picked Apple. We also shop at Walmart. Everything made there were made in substandard condition.
Also, fruit at supermarket, farm worker also work in slave like condition. Every year someone die of dehydration from working under the hot sun.
No easy answer here. Up to a certain point, Apple should assure worker's right. But there is a limit.
rich commented:
Apple is definitely accountable and incidents such as this will continue until Apple and gets serious and moves some of their business to another EMS provider. Foxconn also accountable but we can't count on them to 'do the right thing' and we have no way of know whether or not they are really taking action inside China. So, it's time for Apple to to step up.
Confused commented:
This is WHY the displays are manufactured in China. In order for the product to become a reality, instead of just a cool design, it requires a "China". A place where the workers are not paid a living wage, a place where worker safety takes a back seat to costs, a place where human rights are not likely to get in the way of business needs, a place where bribes can suppress publicity of inconvenient injuries or deaths. That is why corporations do business in China. We all know this. Stop lying about it, the lies just make you look stupid as well as greedy.
Steven commented:
Moral implications have been covered above (also think about the clothing manufacturers' kiddie sweat shop problems a few years ago). Making sure suppliers do things right also pays off with product availablilty and reliability. If there is that much aluminum dust, it could be getting into the product and causing shorts, causing a reduced reliability. This is also damaging to a company's good name.
Also, US companies have been going overseas to avoid US laws that keep workers safe and cost money. How to enforce these laws overseas without forcing our laws on China (or India or...)?
USA Citizen commented:
Why would the fact that the plant being located in China vs. California have anything to do with Apple's responsibilty? If Apple were, say, obtaining the same service from HP, Intel, or other well known US company would not the public at large be screaming for Apple to do something? Of course. So, the fact that Apple customers "want their iTV" (or what ever you want to call the "bling") excuse what may be a concious on the part of the US to excuse the horrible working conditions simply on greed?
Safety Cliff commented:
Yes, Apple as well as Foxconn bear responsibility for this incident, and also for the recent Foxconn suicides. Apple has signed up and publicly stated they are partners in this reposnibility: both Foxconn and Apple have signed up to the Electronics Industry Citizenship Coalition, stating they will provide humane and safe working conditions, living wage, etc, and also this excerpt:
"For the Code to be successful, Participants must regard the code as a total supply chain
initiative. At a minimum, participants shall also require its next tier suppliers to acknowledge and implement the Code."
Apple should/could take the high road and help Foxconn resolve their issues, or they should BOTH be kicked out of EICC: www.eicc.info
George Kaye commented:
It depends upon your world view which is either your in it for yourself or you look out for your neighbor.
If Apple is in it solely for their bottom line and all else be damned, which a sociopath's p.o.v. then they will behave as they have. US law forces the corporation to do what is best for their shareholders essentially turning the corporate entity in a sociopath. There was, when the country started, the requirement that a corporation serve the public good. But that was lost in the 1800's by the supreme court.
IF you have a conscience and look out for your neighbor as your world view then you want everyone that contributes to your success to be well taken care of.
Ever since Reagan's assault on the middle class, which has come to a raging war in places like Wisconsin and Minn., the values of this country have shifted toward greed. Greed is Good is the mantra. Free markets another even though there is no such thing. We have infrastructure and a court system and an educated workforce that we chose collectively to have as a nation that enable trade and decide contracts and punish offenders.
Somalia has no gov't so there's your free market.
All that said, it would be in Apple's marketing interests to not exploit inhumane working conditions for the bottom line. But as I said, that would outrage the shareholders who only want a bottom line, workers be damned.
reji commented:
as far as i know, it is an accident caused by human error. so both of them are equally responsible for the loss of life.
GM commented:
First, let me state that I am not an Apple groupie, not even close. That said, there is no way Apple is or should be accountable for what goes on at Foxconn. The whole reason to subcontract and leverage suppliers is for their expertise and efficiency in a particular area. Foxconn is the expert for electronics assembly and manufacturing, not Apple. They own what goes on inside their business, not Apple. One would hope that given the choice between two companies, Apple would chose to work with the more ethical and socially responsible company (all other things being relatively equal). For all we know made this choice and it was Foxconn.
Greedy Consumer commented:
I don't care how abusive China's labor policies are. This stuff could be built by prisoners or slaves and I wouldn't care. I just want my stuff dirt cheap. Why should I care about quality? The technology will be obsolete before the parts wear out! Don't blame the American company that profits from the cheap labor, or it could effect the stock price. Then my 401K tanks. Don't rock the boat. Whatever Happens in China Stays in China I say.......
Dave B commented:
Should consumers be responsible for knowing the working conditions at every plant that produces products they buy?
Ultimately, the responsibility lies with the company that actually manufactures a product and the government that fails to enact or enforce safety regulations.
Eric P. commented:
It’s a tough question with no easy answer. You want to say yes, but then does corporate rule trump the laws (or lack) of a country? Can one vendor tell another how to run “things”, especially if it is a subcon? The claim could be made that if you want to do business with the 600lb gorilla then you have to do what you’re told. But what if the opposite took place? What if the 600lb gorilla, wants more profit, faster production and drives you to cut back, forcing you do reduce safety instead of enhance it. This too is a very real scenario. So I think the question needs to be looked at all sides, removing any emotion form the discussion, and look at what’s fair and sustainable for all parties; accident or no accident.
Sparky Watt commented:
To make Apple responsible for working conditions at their suppliers would be to make all companies the morals police. Demanding that they supervise other companies this way is unfair to everyone. The Chinese government has responsibility for this, so does Foxconn. Not Apple. The most that can be expected of Apple is that, now that the issue is brought to light, they stop using Foxconn until the issue is resolved.
Gerardo commented:
Every coorporate must take responsibility of the conditions of the work enviroment of their partners. It would be very easy to save cost exporting the works to a countries were the conditions of safety and eviroment are pour for the workers but showing the costumers a first level product. This is not fair competence with the other that are looking for commit all the requierements and has to produce expensive.
Vishal Sharma commented:
It seems to be a case of turning a blind eye and saying "not my problem", "not my country". Someone else (foxconn) is responsible for what they are doing. But if there is anyone human out there looking at what are the eventual results of their actions, he got to have sleepless nights. Bless them and their loved ones.
Joe Cayman commented:
I believe that the main contractor should share some blame, however not all. The main contractor in this Apple should have revied working conditions on a regular basis and taken action. I once worked for a company who delt with a suppliers supplier and refused to do business because of slave like conditions at thier sub. It is just good business because there are companies even in Asia who will do anything to get your business.
Elmer commented:
If Apple takes corporate responsibility? How can they not? It is THEIR product? Just because they hire cheap offshore labor to build their product to improve margin does not mean they are not responsible for its manufacture. They dictate who and how they build their products. Who else is responsible? Foxconn is a subcontractor to Apple, who is the general contractor. If it were a building, the general contractor can't tell the client "it's not our fault -- part of our team, who we chose and didn't tell you about, did it wrong so it's not our fault."
Unemployed American commented:
We should put good American ingenuity to work and make these things safely here in America. If we continue to ship all of our jobs out of this country, then there will be no one here with a paycheck to buy anything.
And besides, we are the ones who design and develop, we should do it here.
Mark T commented:
If only 119 people kill by combustible dust-related accidents in the last 25 year, it is a very good record. You need to understand the number of work force in China. I am sure the number of people kill on the US street is more than 119 in one day.
js commented:
I think it is a mistake to say that every company that contracts with a manufacturing facility is responsible for workplace conditions at that facility. However, when the facility is in China or any place where the main reason to go there was reduced cost, then I am completely in favor of holding the company responsible for the facility meeting the laws of the country in which it is located. In fact, I'd be in favor of making the company hold the contracted facility to a higher standard if there was any way to do that. It would help level the preposterously tilted playing field.
Craig Larry commented:
Yes, Apple is responsible and shame on them for exploiting China labor market and USA consumer market. I will stop buying Apple...















