Thoughts on Foxconn

The blame on Foxconn and Apple has been a hot potato on social network after the suicides were reported. Many blame Apple for their loose auditing and some blame themselves for buying Apple products. Foxconn makes many things for Apple: iPhone, iPad, MacBook, MacBook Pro … you name it. The fact of the matter is that Foxconn actually manufactures more than Apple’s products. It’s the single largest electronics manufacturer in the world and they serve not only Apple, but also Acer, Amazon, Asus, Barnes & Noble, Cisco, Dell, HP, Intel, Lenovo, Logitech, Microsoft, Motorola, Netgear, Nintendo, Nokia, Panasonic, Philips, Samsung, Sharp, Sony Ericsson, Toshiba, Vizio and more. Don’t get me wrong, I am not trying to dilute the blame for Apple.

We all have known this for a while.

For quite a while. It’s not like we did not know that there are people in China–actually not only in China but also in Thailand, Vietnam, wherever the labour is cheaper and the regulation on worker’s right is loose–and we have taken it for granted. Let’s ask ourselves: have I not known that there are people in other countries who work so hard for so little compensation, and some of them–actually many of them–get ill because of the chemicals they unprotectedly use for fabrication efficiency, or the impossibly long hours? Did I not hear the word “sweatshop” ever? Maybe it’s time to think about it. This radio show helps empathise.

No sweatshop, no iPhone.

Actually, the whole iPhone business model is built around it. When iPhone 3 was released no one in the industry could believe its price tag although it was the most expensive phone back then. According to a credible source who works in the mobile phone industry in Korea, Apple preordered 40 million iPhones at once to make it cheaper. No wonder that they are still selling–which is funny word for this as it is free of charge including shipping with two year AT&T contract–iPhone 3Gs. The tragedy at Foxconn premises and Apple’s nice offer on their nice website are only different sides of the same coin.

Some claims that Apple fabricates iPhone not in the US but in China to save “only” 26 per cent of the manufacturing cost. Whether true or not, it’s not “only” 26 per cent, any manufacturer will go to China if they can save by a matter of a cent. Besides, 26 per cent of manufacturing cost means, literally GO or NO GO for a business model, and hence no Foxconn and no China means no iPhone. Well, no Galaxy Tab, no Kindle, no Vaio either.

The whole world is being built around it. It’s not only Apple. Nike has been notorious for its poor welfare for its suppliers. Believe it or not Nike’s initial business model was to import cheap Japanese shoe to US market and beat US made shoe. Think of IKEA, H&M, Zara, Muji, and try to remember where they are made. All of them are selling Californian, Swedish, Spanish, Japanese lifestyle made in, and by hands of others. No sweatshop, no Nike, no IKEA, no H&M, no Zara, nor no Muji. Not that I am saying that they wouldn’t exist–they would be much smaller that they are now, and there must be many more smaller companies that offer alternatives.

Then why is only Apple being targeted? Is it because Apple is so fancy and seems more successful than the others now, or is it because Apple is more evil? Again, don’t get me wrong, I am not trying to dilute the blame for Apple. What I am saying is that we shouldn’t be on the hype, blaming Apple for now, and forget about the whole thing and go back to where we are, which we shouldn’t.

It’s not only electronics or fashion. Ceramics, cooking ware, furniture, even food and magazines in high volume. It’s all built on faster, better, cheaper, more economy model in which we “consumers” increasingly consume forever, and what the world expects is that those people in China and elsewhere will get capability of buying things and become a new group of consumers that will help the sluggishly developing economy in the developed countries. It can’t go forever, and there are growing evidences. In fact, there have been bright minds that talked about the limits to growth from early 70’s, we’ve just been uninformed, uninterested, and/or ignorant.

It’s not only the consumerism.

It’s not only the consumerism, but also globalization, and hence our governments’ policies whether they promote growing conglomerate and export, or helping start-ups and entrepreneurship. It’s only natural for any corporations to try to save costs and dominate the market by providing the same or better products and services at lower price, and it is easier job for bigger corporation. Look at the curricula in management schools, it’s all about–at least a big fraction of it is–ensuring more efficiency. In other words making anything cheaper anyhow–cut employees out, moving manufacturing to China, outsourcing everything that seems not essential, creating shared services offshore–doing it all at even lower cost.

Now, try to order a few hundred anything you designed for fabrication in China. You will hear a firm NO if you’re lucky, otherwise you won’t not even get to see or talk to a person. Still a few hundred is a big risk for a start up! So, all this business model is only possible for a company larger than certain size–and the certain size is becoming larger and larger all the time. Does your countries cut taxes for large corporations? Well, mine does, which is no good. Do your politicians say that it’s the only to revitalize the economy? Well, vote for others next time. What is more, with such big corporations offering cheaper and cheaper products, consumers become more and more price-sensitive while they are buying what they do not really need.

What can we do?

Many. Not that I am saying you can change Apple’s or Samsung’s supplier overnight. But you can be influential for many other things. Here are some ideas I can immediately think of. Feel free to join and contribute!

1. Don’t buy–unless you really really need it. Look at your desk, don’t you have so many things that you don’t use after only a while? A digital camera that you bought because it was cheap. A pair of sunglasses because it was cheap. A polaroid printer that prints digital images as if it was taken by a polaroid. We’d can do better than this.
2. Look for 2nd hand–before look for a new one. What about dishes, forks, spoons, sewer, rice cooker, microwave, folders, furniture, rugs, or books? There are so many products that are being landfilled as they are not demanded. And it’s fun to hunt for 2nd hand! At first you will tend to collect a lot of crap, but you’ll get better! There are growing groups of people and initiatives that promotes reusing. Reuse is certainly better than recycle, and definitely must better than landfill.
3. Be aware where things are made when you have to buy new product – and look around, there most-likely are smaller companies that make products for the same use in your country. By doing 1 and 2, you will have more money to afford things that are made in your country or where the corporate responsibility and employee welfare actually mean something. Plus, you will indirectly help encourage people to get on creating new businesses – that is good not only for your local economy but also the global economy.
4. Use what you have carefully and for a long time – otherwise sell or donate if you do not use it. A big fraction of the stuff being landfilled is still usable, and in almost perfect conditions. Out of order? Fix it if it’s possible, and sell or donate if you are absolutely sure that you don’t need it anymore. There are whole other people who might look for exactly what you’re throwing away.
5. Finally, support small companies that are trying to promote local labour – buy their products, help them by giving them useful feedback. They will appreciate it much more than big corporations.

Hope this was helpful, and your thoughts are always welcome.