New York Times Articles Examine Apple Outsourcing and Supply Chain Worker Abuses

How the U.S. Lost Out on iPhone Work
New York times, 1-21-2012

New York Times article details Apple’s gradual outsourcing of labor during its explosive growth period, leading to the present situation, wherein almost no Apple products are manufactured or assembled in the U.S. Apple employs 43,000 people in the U.S., but over 700,000 workers assemble Apple products overseas, in other companies. The main reasons for Apple’s shift to overseas assembly was not wage differences, but a larger mid-skilled workforce and factories that are far more flexible when it comes to making product line changes, scaling up, and scaling down . Over time the U.S. workforce of mid-level engineers has shrunk, while in China it has exploded. Government subsidies, infrastructural development, and the building up of vast supply chains have made Chinese companies extremely flexible in the electronics and other manufacturing industries. U.S. factories can’t compete: they can’t draw up workforces as quickly, introduce changes to the manufacturing process on the fly, or re-configure their supply chains. The article presents a weary consensus that manufacturing has irrevocably moved to China. While companies like Apple could theoretically still make a healthy profit by producing its wares in the U.S., the operations would not be nearly as fast, efficient, flexible, or cheap. No large, innovative company can afford to produce its products in the U.S. anymore. It seems clear that companies like Apple have done this to themselves over time; but it is equally clear that this trend is not easily reversible.

Read the article here.

In a followup article published a few days later, after Apple released a quarterly earnings report that revealed the company’s largest quarterly profit ever ($13.06 billion), the newspaper revealed that working conditions at Apple’s suppliers and manufacturers are dismal and unsafe. Most shocking: Apple executives have known about these violations for many years and have done little or nothing to prevent them. Industry pressure lead Apple to start monitoring facilities in 2007, and every year the company’s reports have revealed numerous violations of its worker guidelines and even various laws. The article details the types of pressure that other companies in Apple’s position have applied to their contractors, to great effect. Apple has completely failed to do something similar:

“We’ve known about labor abuses in some factories for four years, and they’re still going on,” said one former Apple executive who, like others, spoke on the condition of anonymity because of confidentiality agreements. “Why? Because the system works for us. Suppliers would change everything tomorrow if Apple told them they didn’t have another choice.”

Ultimately, for the world’s most successful consumer electronics company, often hailed as a paragon of innovation, it comes down to a simple choice:

“You can either manufacture in comfortable, worker-friendly factories, or you can reinvent the product every year, and make it better and faster and cheaper, which requires factories that seem harsh by American standards,” said a current Apple executive.

Read the article here.


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