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May 07, 2012

Foxconn Loses Profits, Improves Employee Conditions

By Melissa Warner, TMCnet Contributing Writer

Apple (News - Alert) products are some of the most sought after electronic devices on the market. However, as people sit down with their MacBook Pro’s or iPads, few realize the terrible working conditions that Chinese employees worked under to create the product. In early 2012, Apple conducted an employment audit that found Foxconn's parent company Hon Hai Precision Industry, the manufacturer of Apple products, was engaging in unfair employment practices.



The audit discovered that child and slave labor was occurring on-site and that many employees received late payments, if any at all. Most individuals did not earn enough money to pay for necessary living expenses, despite working 60 hours a week. The conditions of the warehouse and manufacturing plant were also environmentally dangerous. All these issues are illegal under the Unfair Labor Act. Apple demanded that the company improve working conditions if they wished to continue producing the popular devices.

Apple CEO, Tim Cook addressed the issue in an email to Apple employees. “We are taking a big step today toward greater transparency and independent oversight of our supply chain by joining the Fair Labor Association… We are the first technology company they’ve approved for membership. The FLA’s auditing team will have direct access to our supply chain and they will report their findings independently.”

Foxconn agreed to take steps to improve working conditions. Employees received a large pay raise to help with living expenses. They also have reduced working hours and are paid for overtime. The company even hired additional help to keep up with the high demand of Apple products. As a result, Foxconn's profit was lower the second quarter than the first. The totals slipped from 7.25 percent profit in 2011 to 4 percent.

Some people would say it's a small price to pay for human rights.




Edited by Brooke Neuman
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