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Apple faces its ‘Nike moment’.

Apple faces its ‘Nike moment’ over working conditions in Chinese factories

Apple contractor Foxconn raises wages by 25% after reports of long hours for the hundreds of thousands of staff in China.

Charles Arthur and agencies 20 February, 2012

Apple is having a “Nike moment”, a problem that Nike had in the 1990s when its use of cheap labour in the Far East was discovered, one of the inspectors of Apple’s Chinese suppliers has said.

Speaking to ABC News’ Nightline programme, Ines Kaempfer of the US Fair Labour Association (FLA), which is inspecting the Foxconn assembly plants used by Apple in China, said: “There was a moment for Nike in the ‘90s when they got a lot of negative publicity. And they weren’t the worst. It’s probably like Apple. They’re not necessarily the worst; it’s just that the publicity is starting to increase. We call it the ‘Nike moment’.”

Foxconn, which is one of Apple’s main contractors, said on Monday it had raised wages by up to 25% after some workers committed suicide in 2011. There were also reports of long hours for the hundreds of thousands of staff.

It is the second big salary increase in less than two years at the world’s largest electronics contract manufacturer, where workers’ conditions have been closely inspected.

Apple asked the FLA to carry out the inspection. The FLA aims to end sweatshop conditions in factories.

The continuing reports of deaths and distress at Foxconn have created a publicity problem for Apple. So far Hewlett-Packard, Microsoft and Dell, which also use Foxconn for assembly work, have not commented on their use of its factories.

Tim Cook, Apple’s Chief Executive, says that the company takes working conditions very seriously and that every worker has the right to a fair and safe work environment.

Foxconn, which has its headquarters in Taiwan, employs about 1.2 million workers at a small number of plants in China, which are run with almost military discipline. Staff work for six or seven days a week and for up to 14 hours a day.

The workers assemble iPhones and iPads for Apple, Xbox 360 video game consoles for Microsoft, and computers for Dell and Hewlett-Packard. Foxconn is one of China’s largest single private employers.

Since 1 February, Foxconn’s staff receive 1,800-2,500 yuan ($285-395) a month, the company said.

“This is the way capitalism is supposed to work,” David Autor, an economist at the Massachusetts Institute of Technology, told The New York Times. “As nations develop, wages rise and life theoretically gets better for everyone.”

“But in China, for that change to be permanent, consumers have to be willing to pay more for their goods. When people read about bad Chinese factories in the paper, they might have a moment of outrage. But then they go to Amazon and only want to pay the lowest prices.”

Nike faced an outcry in the 1990s when independent reports revealed sweatshop conditions at a number of its suppliers. Continued protests changed its mind.

Foxconn also wants to limit working hours. The pay rises are compensation for workers’ reduced overtime, Company Spokesman Simon Hsing said in a statement. Foxconn said it was co-operating with the FLA inspectors, promising again to provide a safe and fair working environment.

In 2010, suicides at an enormous Foxconn complex in the southern boomtown of Shenzhen drew attention to the stress of many young workers.

At that time, the company denied that it ran assembly lines that were too fast and demanded too much overtime, but it soon announced two pay rises that more than doubled basic salaries to up to 2,000 Yuan a month.

In February, dozens of workers assembling video game consoles climbed to a Foxconn factory roof in the central Chinese city of Wuhan and some said they would jump to their deaths because of a disagreement with the company.

The New York Times reported that workers were happy about the pay rises and overtime limits, but some were unsure they would cause much real change.