LITTLE ROCK — Responding to a critical investigation of its factories, the manufacturing giant Foxconn has pledged to sharply curtail working hours and significantly increase wages inside Chinese plants making electronic products for Apple and others.
The move could improve working conditions across China.
The shift comes after a far-ranging inspection by the Fair Labor Association, a monitoring group, found widespread problems - including numerous instances where Taiwan-based Foxconn violated Chinese law and industry codes of conduct by having employees work more than 60 hours a week and sometimes for 11or more days in a row.
The monitoring group, which in recent weeks surveyed more than 35,000 Foxconn employees and inspected three large factories where Apple products are manufactured, also found that 43 percent of workers surveyed had experienced or witnessed accidents, and almost two-thirds said their compensation “does not meet their basic needs.” Many said the unions available to them did “not provide true worker representation.”
“There’s this lingering sense among workers that they’re in a dangerous place,” Auret van Heerden, president and chief executive of the Fair Labor Association, said in an interview. But Foxconn has “reached a tipping point. They have publicly promised to make changes in a manner that they will have to deliver on it.”
Apple, which recently joined the Fair Labor Association, had asked the group to investigate plants manufacturing iPhones, iPads and other devices. Tim Cook, Apple’s chief executive officer, visited a Foxconn factory in Zhengzhou, China, on Wednesday.
In recent months, a growing outcry over conditions at overseas factories has prompted protests and petitions, and several labor-rights organizations have started scrutinizing Apple’s suppliers. Last week a collection of advocacy groups sent Apple an open letter calling on the company to “ensure decent working conditions at all its suppliers.”
Since January, Apple has released a list of 156 of its suppliers - which it had previously declined to identify - and has begun posting regular monitoring reports on hours worked by factory employees. Apple, which has regularly audited its suppliers since 2006, said in a statement Thursday, “We share the F.L.A.’s goal of improving lives and raising the bar for manufacturing companies everywhere.”
Foxconn did not reveal how much it would raise wages or details on how its promises would be put into place. Foxconn makes more than 40 percent of the world’s electronics products - including for such brands as Amazon, Dell and Hewlett-Packard - and is China’s largest and most prominent private employer, with 1.2 million workers.
In response to the report, Foxconn said, “We are committed to work with Apple to carry out the remediation program, developed by both our companies.”
Apple, in a statement, said the company fully supported the monitoring group’s recommendations.
“We think empowering workers and helping them understand their rights is essential,” the statement said. “Our team has been working for years to educate workers, improve conditions and make Apple’s supply chain a model for the industry, which is why we asked the F.L.A. to conduct these audits.”
Foxconn’s promises include a commitment that by July of next year, no worker will labor for more than 49 hours a week - the limit dictated by Chineselaw. Foxconn also has pledged that despite cutting hours, employees’ salaries will not decline.
Experts said such promises will most likely require Foxconn to hire tens of thousands of new employees as well as raise wages, steps that could cost it hundreds of millions of dollars annually.
Those moves, in turn, are likely to influence the prices paid by Foxconn’s customers, which include every major electronics company, and could increase the retail cost of consumer electronics products like smart phones and tablets unless Apple and others accept lower profit margins.
“At the end of the day it’s a matter of image, a matter of recognition, a matter of reputation,” said Ricardo Ernst, a professor of global logistics at Georgetown University.
But regardless of motivation, when a company as large as Foxconn changes, it reshapes other companies’ decisions as well, he added.
This is not the first time that independent monitors have criticized working conditions at Foxconn - or that change has been promised. In 2006, Apple said that Foxconn “has enacted a policy change to enforce the weekly overtime limits set by our Code of Conduct.”
That change, however, did not bring Foxconn into line with the law or Apple’s regulations.
Last year, Apple wrote in its yearly audit summary that “reducing excessive overtime is a top priority” in 2012. Earlier this year, the company began weekly tracking of 110 facilities where excessive work-hour violations were commonplace.
Last month, according to that tracking, the average employee worked 48 hours, and 89 percent of monitored employees worked 60 hours or less per week, which is the limit mandated in most circumstances by Apple’s supplier code of conduct.
“It is not news that Apple and Foxconn are promising to end labor-rights abuses at these factories,” said Scott Nova, executive director of the Workers Rights Consortium, a university-backed monitoring group based in Washington. “They have been promising to do that since 2006. And they have not delivered. I hope this time will be different.”
Van Heerden of the Fair Labor Association said he believed this time the promised changes would occur because his organization would continue monitoring Foxconn and because worldwide attention was focused on the issue more sharply than ever.
“I think they have crossed the Rubicon,” he said, of Foxconn and its chief executive, Terry Gou. “He’d be crazy to make these commitments without fulfilling them.” Information for this article was contributed by David Barboza of The New York Times.
Business, Pages 19 on 04/02/2012