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FINANCE/ Bertone: This is the global illusion that feeds the crisis

January Mon 30, 2012

Customers in the Apple store  Customers in the Apple store

At the end of last summer, Lai Xiaodong, 22, left his native village to answer the call of the huge factory of Chengdu, which is none other than Foxconn, the giant with a half million employees that has produced, among other wonders of technology, the 37 million new iPads sold from September to December. Lai Xiaodong, however, probably never had the opportunity to push start and see the illuminated icon and glossy screen of the iPad. But that screen cost him his life. The accumulation of the aluminum dust used for the final cleaning of the iPad screen caused a sudden, violent explosion, fatal for Lai and three of his colleagues, and also injuring 18 others, more or less seriously.

A few days ago, the New York Times published an extensive report on working conditions in the Xhengdu factory, where the steep outside stairs of the dormitory are sealed with steel mesh after a wave of suicides a couple of years ago. This is an embarrassing accusation for Apple, but not only Apple is implicated, since the factory of Chengdu, owned by a millionaire in Taiwan who plans to replace the workers with robots by 2020, serves everyone: Dell, Hewlett Packard, IBM, Lenovo, Motorola, Nokia, Sony, Toshiba and many others.

The news from the factories in China came in conjunction with Apple's new record 13 billion dollar profit in three months, for a market capitalization of 416 billion. The salary, including bonuses, stock options and pay packet that Tim Cook, the man who took the helm of Apple after the death of the genius Steve Jobs, took home in 2011 was $378 million. Can the work of one man, however talented he may be, be worth $378 million? Can you justify the wage gap that separates American workers from the top managers? And what justification can a salary like that have when you look at the working conditions of Chengdu or other suppliers?

Of course, the company based in San Jose has published a code of conduct for suppliers, which until recently, was jealously kept secret. Today we know more. As noted by the Times, at least half of the suppliers have violated labor laws in their country of origin (China or Southeast Asia) at least once. "Apple never cared about anything other than increasing product quality and decreasing product cost", said Li MingQi, the former director of Foxconn, now working as a lawyer on behalf of the victims of accidents at work. At company headquarters, the New York Times got some confirmation of this. Executives, starting with Jobs, tried to do more on more than one occasion. But how? The market is hungry for iPhones, iPads, and so on. We cannot waste time, also because we have so many wonderful new products waiting.



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