When vocational school students are pressed into producing them
The iPhone 5 would hardly have sold as much and as quickly, as it has, had it not had strong contract manufacturers assembling it overnight. Such assembling does not take place in the headquarters of Apple. Much of it is done in what is still the ?factory of the world?: China.
Foxconn Technologies is one of the biggest assemblers and component manufacturers of Apple products. Headquartered in Taiwan, Foxconn has several manufacturing operations in mainland China and is vital for making iPhones and iPads for global markets. It symbolises the production line in modern hi-tech industrial manufactures where innovation and R&D are completely separate from assembling. While Foxconn does not contribute the innovations shaping Apple products, it gives the innovations physical forms and ensures their quick turnover.
More than assembling, however, Foxconn has recently been in news for incidents involving labour in its different factories in China. Foxconn employs about a million people in China, out of which around 100,000 work in the Zhengzhou factory in Henan province. The New York-based China Labour Watch reported that 3,000-4,000 workers in the factory went on strike recently, protesting against the management?s demands for stricter quality control and working on holidays. Demands for introducing finer quality specifications into the iPhone5 sets, without proper training, irked workers who clashed with quality control inspectors on site. Though Foxconn disagreed on the number of workers involved in the strikes, it did not deny the occurrence of the protests and urged workers to refrain from resorting to extreme rights for meeting their demands.
There have been fairly regular reports of labour unrest in Foxconn. Less than a month ago, 40 workers were injured in a conflict involving around 2,000 people in the Taiyuan plant in Shanxi province. Earlier in June, several workers went on a rampage at the company?s Chengdu plant in Sichuan province. There are reports of several Foxconn workers having committed suicides because of mounting stress.
Two other trivia highlight Foxconn?s trials and tribulations in managing labour and maintaining volumes. The first is the rather bizarre occasion of vocational school students being asked to work in Foxconn factories. Several vocational students from Huai?an in Jiangsu province were asked to make USB data lines for iPhone5 sets before their release. And about a year ago, Foxconn had announced radical plans to introduce 1 million robots in its production value chain by 2013 for the relatively more mechanical functions.
The problems in Foxconn point to emerging structural issues in China?s labour market. For several years, China has dominated the global manufacture market by producing large batches at low cost and in quick time. This has been made possible by its abundant work force and tightly controlled customised modes of labour management. Over time, however, some aberrations are emerging to this model.
Labour supply is no longer as inelastic as it was before. More supplies require more wages. Fifteen or ten years ago, assemblers and factories could mobilise thousands of workers at little notice and low wages for responding to a sudden increase in demand for their products. The same is becoming increasingly difficult. By Foxconn?s own admission, the students in Huai?an were made to work because the impending global launch of iPhone5 brought more than expected orders for the plant and found it short-staffed. Indeed, the students worked for more than eight hours without supervisors, something which is not only unprecedented but also probably not permissible under the provincial laws.
While labour supply is getting interrupted, forcing manufacturers to turn to quick-fix solutions like employing students, more critical shortfalls are surfacing in skills. Product lines like the iPhones require continuous innovations. Apple emphasises innovations for increasing aesthetic appeal and user comfort. But planting innovations into products requires more skills than those usually available with mass labourers recruited from rural areas. The unrest at the Zhengzhou factory apparently took place over the management?s demands to introduce 0.02 mm induction standards and for implementing measures preventing scratches on frames and covers of iPhones. The workers were not trained to meet the new quality standards and the demand to introduce them in quick time and in large numbers led to production of sub-quality products failing to pass the scrutiny of inspectors.
Making iPhones is surely different from stitching garments, building radios and fixing machine parts. Producers and workers in China are realising this hard as digital products become innovation-dominated and the turnaround time for graduating to new innovations reduces rapidly. Labour volumes, which themselves are shrinking, can no longer substitute skills. While the iPhone5 continues to blow away customers across the world off their feet, it also prolongs suffering and anguish for thousands of workers in the mainland, untrained to respond and with uncertain futures.
The author is head (partnership & programme) and visiting senior research fellow at the Institute of South Asian Studies in the National University of Singapore. He can be reached at isasap@nus.edu.sg. Views are personal
