Dispatches From Taiwan: As We Pursue The Lowest Price, Some Pay The Ultimate Price
The latest in an ongoing series…
As some of you may have already heard, a 25-year-old employee of Taiwanese contract manufacturer Foxconn (i.e. Hon Hai Precision Industry Company) committed suicide two Thursdays ago after being unable to produce one of the 16 next-generation Apple iPhone prototypes he’d been entrusted with the previous Friday (the 10th). Some time in the next few days, Sun Danyong (a recent engineering graduate) and the phone somehow parted company. He reported the device loss to his supervisor on Monday the 13th, and on Wednesday the 15th he was interrogated and his apartment was searched. One day later, he leapt to his death from a 12-story building.
The specifics of this case are unclear, to some degree contradictory, and frankly may never get sorted out. According to a series of (potentially fake) instant messages Danyong reportedly sent out just prior to his suicide, he indicated he’d been physically abused during his interrogation. And the examination of his apartment was illegal under Chinese law (a Foxconn subsidiary in mainland China, where the incident occurs, comprises the bulk of the company’s total employee count and manufacturing capacity). Foxconn counters that Danyong had suspiciously misplaced similar confidential products on several prior occasions. The company has also suspended and handed over to Chinese authorities Gun Qinmin, a section chief of Foxconn’s Central Security Division, for potentially using "inappropriate interrogation methods" in his investigation such as unannounced home searches, solitary confinement and physical violence. Rogue employee, or scapegoat?
And, after initially offering the family 300,000 renminbi (more than $44,000 USD) as compensation (or ‘blood money’, if you prefer, depending on whose version of the story you believe) for their loss, along with a MacBook for Danyong’s girlfriend, Foxconn later reportedly boosted the offer to $52,600 plus $4,385 for every year in the future that one of the parents is still alive. While Foxconn furiously backpedals, sanctimonious bloggers are milking the story for all it’s worth, magnifying every pseudo-news nugget in order to maximize their site visit fortunes…which is why, out of respect for Danyong and his family, I’ve waited until now to comment on the matter, and this post will likely be my final word on it.
Was Danyong physically or otherwise abused? Was he already mentally unstable prior to this incident? Did he innocently misplace the iPhone? Did he steal it in the hopes of selling it to an Apple competitor? Or was he set up? Again, we probably won’t ever know the truth of what happened to this young man, but his regrettable passing has at least one upside; it’s turned the world’s attention if only briefly on the bigger-picture human cost of the low costs that we as producers and consumers unrelentingly demand.
While I saw plenty of automation used on assembly lines I visited in Taiwan:
I also saw lots of scenes like these:
Note the preponderance of young women? I asked our tour guide, who was also a woman, the reason for this age and gender disproportion. While she mostly responded with politically correct verbiage such as ‘the higher patience of women for monotonous many-hour-long repetitive tasks’, she also admitted with a wry smile that Taiwanese manufacturers are able to pay young workers less money than their older peers, and women less than men. And I couldn’t help but notice splints, wraps and other crude tendonitis-counteracting devices already in use by many of the workers I saw:
Sometimes even a teenage girl’s salary is too high to achieve the unrelenting cost demands of contract manufacturers’ customers. As such, I saw several signs like this at various company sites:
The language at the top of the sign is Thai. Contract workers from Malaysia also find common use, according to representatives of multiple companies I spoke with. They live in dormitories right next door to the manufacturing plant. And what of reports that they’re inadequately compensated for their efforts and forced to work inappropriate amounts of overtime? "We treat our employees with dignity and respect", or a variation on that theme, was the universal response, sometimes delivered in conjunction with a forced smile. Sure you do.
Taiwan’s other key problem in attempting to keep its manufacturing treadmill smoothly rolling involves geography. The island is quite mountainous; only a fraction of its land area is suitable for housing and commercial real estate. Plus there are the issues of periodic earthquakes, typhoons and other natural disasters to consider. Which is why even though the respective governments of the Republic Of China (Taiwan) and People’s Republic of China maintain chilly-at-best diplomatic relations, numerous Taiwanese companies have (like Foxconn) set up subsidiaries on the Chinese mainland.
Although you may think I’m trying to bash Foxconn (specifically) or Taiwan and China (generally), I’m more pragmatic than that. The countries’ industries are largely unregulated, and as such company officials are doing what is necessary to maintain if not grow their fiscal fortunes. Arguably, the assembly line workers might have even worse lives if not for their jobs. And I’m not so naive as to think that Apple or some (or any, for that matter) of the rest of you are going to immediately terminate your outsourcing programs after reading this piece. The free market economy would in short order ensure that your competitors (who don’t terminate their outsourcing programs) would leverage their resultant cost advantage to ensure your demise.
What I guess I am asking is that you take a few minutes, on a regular basis, to simply consider with as much ethical detail as you can muster the ultimate outcomes of your business decisions. Particulates and greenhouse gases don’t vanish once they go up a factory smokestack; they affect the planet and its human and other inhabitants in myriad undesirable ways, even if the resultant costs aren’t directly passed back to the factory owners. Similarly, when you choose one country (or company) over another to manufacture your next widget based only on the resultant price tag impact, or when you rake your supplier over the coals for a few more cents’ reduction in bill of materials and labor costs, there is a tangible human impact to your actions.
Do onto others as you would wish them to do onto you. That phrase, or a variation of it (i.e. karma, ‘the things you do come back to you’), is common to numerous spiritual and other humanistic traditions around the world. I guess my wish is that by planting an ethical seed (which will sooner or later sprout and take root) in a sufficient number of your noggins, you’ll act in unintentional lockstep to improve the conditions of those on whose labors you rely for your business fortunes, thereby guilt-motivating your remaining competitors to do the same. Then again, maybe I shouldn’t have revealed my ulterior motive…
Food for thought. Your thoughts?