Apple is not the only company that uses Chinese factories such as Pegatron and Foxconn, but being named the World’s Most Valuable Brand by Forbes has people looking at their business practices.
An undercover investigation report by BBC Panorama in December 2014 reported poor treatment of workers where Apple products are made at Pegatron factories on the outskirts of Shanghai, China.
Undercover reporters told stories of 12 to 16 hour shifts and one undercover reporter claimed working 18 days in a row despite repeated requests for a day off.
Apple moved some of its production work to Pegatron’s factories on the outskirts of Shanghai after poor conditions in Chinese factories were highlighted in 2010 when 14 workers killed themselves at Apple’s biggest supplier, Foxconn.
According to BBC Panorama’s undercover reporters standards spelling out how factory workers should be treated were routinely breached on the factory floor.
According to the BBC article Apple declined to be interviewed, but said in a statement: “We are aware of no other company doing as much as Apple to ensure fair and safe working conditions.”
China Labor Watch report
An article from ChinaFile published in February discusses research done by the New York-based nongovernmental organization China Labor Watch.
The report by China Labor Watch concluded that Apple consistently suppresses labor costs by shifting production to cheaper manufacturers. They believe Apple switched from the Taiwanese conglomerate Foxconn to Pegatron for its lower cost production by way of lower labor costs. Pegatron Group has many locations in mainland China with about 80,000 workers and most of them are producing Apple products.
Profits up thanks to devoted fans and cheap labor
An interesting point made in the Forbes World’s Most Valuable Brands article is that “Apple relies on its avid fan base more than Madison Avenue to promote its products.” Samsung spends nearly $4 billion on advertising to sway consumers, Apple spent only one-third as much at $1.2 billion last year.
Apple saves billions in advertising by having a devoted fan base.
Apple saves billions cutting costs on the backs of Chinese factory workers.
Thanks to their loyal fans, and cheap Chinese labor, Apple profits are up. According to Forbes, “Apple is making money hand over fist” with an $18 billion profit in the fourth quarter, up 33% from the prior year.
The $5 Billion “Spaceship” Campus
While Apple is scrutinized for exploiting factory workers in China, back home in California, Apple is spending $5 billion building “an amazing new campus.” The 3.7 miles of curved glass will wrap around the “Spaceship” Campus, with the museum-grade stone-infused flooring in “one of the most beautiful corporate spaces ever conceived.”
Apple should invite their devoted fan base and some Chinese factory workers to their “amazing new campus.” After all, they helped pay for it.