Repercussions of Reporting on Apple 'Sweatshops'

PRC Banker writes "Following the media attention over Apple using 'sweatshop' tactics to manufacture iPods, facts were disseminated making things seem not as bad as first reported. However, recent developments suggest that 'Apple Computer's iPod supplier FoxConn has decided to sue the media for mis-reporting on working conditions in their factories. Rather than sue the British tabloids, FoxConn sues a Shanghai newspaper. The reporter has a translated version of his personal experience and thoughts.' Powerful Chinese company threatens local media. Worrying indeed, especially given this company's track record. The president of Foxconn is the richest man in Taiwan, and the company has attempted to use coercion in the past."

This is a common trend in China

[Parallax Blue]

Chinese media, especially newspapers, are a popular target for retribution. Report on something damaging to a major company or the government and you could find yourself out of a job [findarticles.com] or worse. It seems you're expected to totally ignore any potentially damaging news and stick to safe topics (ex: what the gov't tells you to report on.)

My guess is that this company figures they have a better chance of exacting revenge on a newspaper in China than on British tabloids.

-Parallax

Boo Hoo

[Kohath]

The media tries to damage a company (and all the people working there, and all the stockholders and suppliers) with a distorted drive-by hit story. It's a little refreshing to see someone hitting back for a change.

Re:Just sell two versions of the ipod

[mp3phish]

Exactly.

One of these days the practice of moving manufacturing to China and other countries will not depend on being big enough to do it efficiently. That is when all these artificial margins these companies (like Apple) are getting will instantly shrink and and guess what? Time to go bankrupt.

Current business models which depend on Chinese (or other offshore) manufacturing to cut costs have no lasting ability. I give them another 3-5 years.

Re:Just sell two versions of the ipod

[djupedal]

"Current business models which depend on Chinese (or other offshore) manufacturing to cut costs have no lasting ability. I give them another 3-5 years."

A generally accurate summation, but I would suggest longer, say as much as ten years.

As I currently live and work as part of the 'current business model' we speak, I too have posed the same problem, and it seems the Chinese at the higher levels are aware of this issue, and are at least attempting to plan for it now.

One method of defense is the practice of having foreign companines create permenant R & D facilities that can remain in use once the factories are shuttered. Another is to gain favor with as many 3rd world countries as possible so that when the time comes to find another LCC, their will at least be some options.

As for what those options are, if the same business model is to live on...North Korea has a decent HR pool, at least in rough terms - and there are only two countries that can ever take advantage. One is China and the other is South Korea.

Actually, I see a combined Asia, along the lines of the EU, coming into place long before ten years has passed and the LCC business model becomes an issue. We can expect micro-factories replacing the mega, such as the 200,000 worker Foxconn facility behind the current iPod flap.