Foxconn: No Legal Action After Mike Daisey Story Retracted From 'This American Life'

TAIPEI (Reuters) - Foxconn Technology Group, the top maker of Apple Inc's iPhones and iPads, is not off the hook after a U.S. radio show retracted a program critical of working conditions at one of its Chinese factories.

The Hong-Kong based China Labor Bulletin said Foxconn still employed harsh working conditions, while a fund manager with shares in Foxconn's parent said investors were watching how the company treats workers.

"The retraction has somewhat cleared Foxconn's name, but not all the way. The press and stock investors will continue to watch how Foxconn treats its workers going forward," said Simon Liu, fund manager and deputy investment officer at Polaris Financial Group's fund unit in Taipei. The unit owns share's in Foxconn's parent company, Hon Hai Precision.

"Obviously, Apple is starting to take serious step asking Foxconn to properly treats its China workers," Liu said.

The radio program "This American Life" last week retracted the episode, saying it had contained "numerous fabrications".

Foxconn said on Monday it had no plans to take legal action although the program had hurt its reputation.

"Our corporate image has been totally ruined. The point is whatever media that cited the program should not have reported it without confirming (with us)," said Simon Hsing, Foxconn's spokesman.

"We have no plans to take legal action... We hope nothing similar will happen again."

Rights groups have criticized Foxconn for several years for what they describe as harsh working conditions.

Working practices at Foxconn's huge plants in China, which combined employ a million people, came under intense scrutiny in 2010 after a series of suicides among young workers. Last June three workers died in an explosion at a Foxconn plant in Chengdu, western China.

Geoffrey Crothall, a spokesman for workers' rights group China Labour Bulletin, said workers at Foxconn were still subject to a list of poor working conditions, including long working hours, strict management that sometimes borders on abusive practice, and unsafe work practices in some factories.

"All those things are very much in place. I don't think there's been any alleviation (of these problems) in the past few months. I don't think Foxconn's done anything, really," Crothall said.

The retracted episode, broadcast on January 6, was based heavily on a one-man theatrical show by actor Mike Daisey: "The Agony and the Ecstasy of Steve Jobs."

Daisey's play and its attendant publicity, including the radio segment, played a big role in pressuring Apple to allow outside inspectors at its contract manufacturing facilities in China, mostly owned by Foxconn Technology.

The executive producer of "This American Life" said in a broadcast last week that most of the retracted program's content was true and corroborated by independent investigation.

The inaccuracies were linked to the actors' account of his trip to China. For example, Daisey said guards at a Foxconn factory had guns, but the program said only the military and police are permitted to carry guns in China.

Apple, criticized over working conditions at its chain of suppliers in China, said last week that a U.S. non-profit labor group had begun an "unprecedented" inspection of working conditions at its main contract manufacturers.

Last month the New York Times published an investigation into working practices at Apple supplier's plants in China that documented poor health and safety conditions and long working hours.

Hon Hai Precision fell 0.48 percent on Monday, slightly underperforming a 0.14 percent fall in the main Taiwan stock index.

(Additional reporting by Sisi Tang in Hong Kong; Reporting by Faith Hung; Editing by Neil Fullick)

On February 21, ABC aired a "Nightline" segment in which Bill Weir visited Foxconn factories in China to report on the working conditions there. Take a look at the slideshow (below) for some of the most surprising facts from that broadcast.

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• Handmade Gadgets

  On February 21, <a href="http://www.huffingtonpost.com/2012/02/22/nightline-apple-supplier-foxconn_n_1293393.html?ref=technology" target="_hplink">ABC aired a "Nightline" segment featuring Bill Weir's visit to a Chinese Foxconn factory</a> responsible for making some of Apple's popular devices. During a tour of the factory, Weir says he "expected more robots" but in fact most of the gadgets at Foxconn are made the old-fashioned way: The high tech parts are put together by hand. For example, iPhones are assembled by hand in 141 steps. One iPad takes five days to assemble and passes through 325 sets of hands.

• Insane Output

  Two shifts of workers toiling in 12 hour shifts can make 300,000 iPad camera modules in one day, not to mention shape sleek iPads out of "raw hunk[s] of aluminum" at a rate of 10,000 per hour. <a href="http://abcnews.go.com/watch/nightline/SH5584743/VD55173552/nightline-221-apples-chinese-factories-exclusive" target="_hplink">Image via Nightline</a>

• 7 To A Room

  Many workers live at the factory, where they pay $17.50 per month to live 7 to a room in Foxconn dormitories. <a href="http://www.forbes.com/sites/connieguglielmo/2012/02/22/nightline-goes-inside-apple-factories-in-china/" target="_hplink">The average starting salary is $285 per month,</a> and workers must pay for their food. <a href="http://abcnews.go.com/watch/nightline/SH5584743/VD55173552/nightline-221-apples-chinese-factories-exclusive" target="_hplink">Image via Nightline</a>

• No Free Lunch

  Workers get two hour-long meal breaks during each 12-hour shift. They eat together in a cafeteria where they pay $.70 a meal. This is about a quarter of their hourly wage. <a href="http://abcnews.go.com/watch/nightline/SH5584743/VD55173552/nightline-221-apples-chinese-factories-exclusive" target="_hplink">Image via Nightline</a>

• Tim Cook Investigated Suicides

  In 2010, after a spate of suicides at Foxconn's Shenzen plant, then COO Tim Cook flew to China to investigate the matter. <a href="http://abcnews.go.com/watch/nightline/SH5584743/VD55173552/nightline-221-apples-chinese-factories-exclusive" target="_hplink">According to Nightline,</a> Cook put together a team of psychiatric experts to examine the issue. It was at that team's suggestion that the infamous nets were installed between the buildings to prevent suicides. There have been 18 worker suicides at Foxconn since 2010. <a href="http://www.reuters.com/article/2012/02/15/us-china-apple-idUSTRE81E1FQ20120215" target="_hplink">According to Reuters' interview with Fair Labor Association president Auret van Heerden, the group's initial findings from its audit of Foxconn</a> suggested that the suicides could have been "a function of monotony, of boredom, of alienation perhaps."

• Young Workers

  Weir said he was surprised to see how young the workers were. He said many were in their late teens and no one looked like they could be over 30. Many had left their hometowns, oftentimes in the countryside, in order to get jobs at Foxconn. Weir also toured Chengdu and spoke with the relatives of workers who had left for jobs at Foxconn. According to Cult of Mac, <a href="http://www.cultofmac.com/147878/foxconn-employees-say-underage-workers-were-hidden-before-fla-inspection/" target="_hplink">Foxconn may have hidden underage employees</a> when the Fair Labor Association conducted its inspections. While Apple allows for workers as young as sixteen to assemble their products, those eighteen and under are afforded "special protections," <a href="http://www.appleinsider.com/articles/12/02/22/factory_workers_claim_foxconn_hid_under_age_employees_before_fla_inspection.html" target="_hplink">according to Apple Insider.</a> These include not being allowed to perform some tasks and working shorter hours than older workers.

• Foxconn Exec Wants To Pay More

  When asked how Foxconn would react if Apple suggested doubling workers' pay, Foxconn executive Louis Woo told Weir that the company would welcome a raise for employees. "Why not?" Woo said. "That would be good for the employees and also definitely good for China and good for us."

• Air Showers

  Workers have to wear static-proof jackets and take "air showers" to make sure the work area remains dust-free. Even one spec of dust could prove ruinous to the iGadgets' delicate innards. <a href="http://abcnews.go.com/watch/nightline/SH5584743/VD55173552/nightline-221-apples-chinese-factories-exclusive" target="_hplink">Image via Nightline</a>

• WATCH A CLIP FROM THE NIGHTLINE SEGMENT

Comments

[bumpandrun]

10:00 AM on 03/20/2012

Is it just me or does anyone else find it funny that Foxconn says "Our corporate image has been totally ruined..." but yet they aren't going to sue and the program was retracted?

[Derek Whittom]

10:08 AM on 03/20/2012

They don't want to have people with Foxconn on the tips of their tongues anymore than they have to.

[Derek Whittom]

09:55 AM on 03/20/2012

Sane idea. Take non-violent offenders out of prison and pay Foxconn to give them a job.

[Derek Whittom]

09:27 AM on 03/20/2012

I just want to point out, for fun, that better labor conditions in electronics factories in the developing world only helps Apple. All of these technology gadgets are built in these factories, except Apple's competitors operate on extremely slim margins, whereas Apple has huge margins (generated primarily through brand loyalty and PR reasons). Creating a better public image for itself will only sell more iPhones and iPads, while making it nearly impossible for its competitors (like Samsung and HP) to maintain market share.

[South Breeze]

12:03 AM on 03/20/2012

American corporations are the biggest threat to world peace and human dignity. In the US and elsewhere, it's corporations that create the worst kind of human suffering. The Chinese government is way way way more effective in addressing their citizens needs and demands. They are doing all they can to create better infrastructure, better schools, and better living. What are we doing? We are demolishing the great life that we once created. US corporations are the Nazis of the 21st century.

[Howard Russell]

10:06 PM on 03/19/2012

Don't you think it is a bit obscene that Apple is sitting on a $58 billion surplus when American workers are facing diminishing opportunities here at home?

[Joseph Raymond Herrera]

09:52 PM on 03/19/2012

Under current GOP lunatics if they win the election, USA will become, in less the time to realize, one giant Foxconn.

[Lonnie DeVorak]

10:02 PM on 03/19/2012

Sorry, we cannot become one giant Foxconn in the US. There are no longer any companies in the US as big as Foxconn.

[4TJefferson]

07:12 PM on 03/19/2012

No Simon, your "image" was ruined workers committing suicide trying to gain attention to your inhuman working conditions.

[rafaelloaa]

05:55 PM on 03/19/2012

And this is why I listen to NPR. If they make a mistake, they admit it, and correct their error. On the other hand, many news media outlets would just ignore the error....

[Kaleokualoha]

05:21 PM on 03/19/2012

". . . poor working conditions, including long working hours, strict management that sometimes borders on abusive practice, and unsafe work practices in some factories" may also apply in the United States. Kettle-pot?

[4TJefferson]

07:09 PM on 03/19/2012

No. Does not apply to the US. 100+ hours per week. Less then a $1 per hour. Inhuman working conditions. Besides, where do the workers go to complain? If they complain, they get sent to "retraining" camps.

[JohnTheMac]

09:53 PM on 03/19/2012

you're crackers.

[montex]

04:32 PM on 03/19/2012

Suppose instead of using it's massive cash hoard to pay dividends, Apple chose to build factories in the US and hire American workers to build iPad. Would that change working conditions in China?

[omeo2013]

02:27 PM on 03/19/2012

"Our corporate image has been totally ruined."

Boo-friggin'-hoo.

[68Namvet]

02:23 PM on 03/19/2012

If we pay attention to what Steve Jobs told us of his frustrations in finding the thousands of qualified engineers here in the U.S. required for the production of his products, coupled with the positions of the republicans to curtail higher education grants and expenditures and their belief that colleges are "liberal indoctrination centers" that lead to "elitist" mentalities, we begin to get a clear picture of the problem.

Decades of growth in manufacturing were coupled with growth of unions and collective bargaining that led to a decent working wage and a rise of our middle class. Homes, higher education for our children, retirements, all became affordable and the U.S. prospered. Then corporations saw the advantage of using cheap labor with no bargaining rights in other countries and quickly began shifting manufacturing away from the U.S.. Higher wages, unions, pension costs, health insurance costs were all given as reasons for moving manufacturing, yet nothing was said about the rise in executive pay and benefits.

The conservative solution is simple. Destroy the middle class. Destroy collective bargaining and unions and return the country to third world status. Then, we can run sweat shops and labor camps here as they do in China, and manufacturing can come home to the U.S.

[GOP Lie Detector]

02:37 PM on 03/19/2012

The awful part is they cannot say there were not enough talented people here to get the iPads and iPhones "built". There are plenty of workers here in the U.S.A. capable of fine parts assembly. It is the wages, wages, wages. Apple is building its empire on the backs of nearly slave labor wages. They are literally paid just enough to eat and that is about it. Most people in the industrial Chinese cities that make these products are too poor to buy them now, or ever since they cannot even save enough money to buy one in the future.

[amajamus]

04:38 PM on 03/19/2012

One misconception is that these workers are not "engineers'" they are regular assembly line workers. This is one of the ways apple makes it seem impossible to make devices in the US . . . not enough "engineers!"

[68Namvet]

05:21 PM on 03/19/2012

While it is true that the assembly workers are not engineers, Jobs was referring to the design engineers, hardware engineers, software engineers, test engineers, quality control engineers and line engineers necessary to do design lay out, board lay out, production control and testing of parameters before the devices being put together can be built. And any reasonable person can understand that to produce the device, the engineers responsible for the production, design or quality of the device must be on site to correct any flaws found.

As noted, Foxconn employs over a million workers in it's various plants. Job's was referring to his inability to find the more than 5,000 qualified engineers he required for the production of the Apple product line of iMacs, iPods, iPhones and iPads.

Further, due to a larger population and an educational emphasis on mathematics and engineering in China (as well as India) - China graduates nearly 6 PHD engineers for every 1 in America. Simply put, we are falling behind educationally.

[Lonnie DeVorak]

10:06 PM on 03/19/2012

Not enough engineers but toooo many rocket scientists.

[Becky Selfridge]

02:17 PM on 03/19/2012

I have both the iphone 4s and Ipad 2. It's a little worrisome that my Ipad - that cost me almost friggin' $900 - past through OVER THREE HUNDRED sets of hands. What if one of those poor chinese children who are scared to death of retribution and see the suicide nets as they go to work every day made ONE little misstep? oh God don't even get me started on my stinkin iphone. I'm just amazed, that's all.

[Joseph Raymond Herrera]

10:06 PM on 03/19/2012

I'm in the same situation (only my iPad is the new one) and wonder what fraction of the sums are going to those chinese workers and what of the sums are going to the pockets of Apple's shareholders.

[Blackwing]

01:55 PM on 03/19/2012

How does anyone know what's going on in the factory? The country is run by a Communist dictatorship that Corporate America has fallen in love with. I think Wall Street etc would love to see a similar authoritarian government here in the US so the corporations could do exactly what they want without anyone questioning them.

[jdiary]

01:40 PM on 03/19/2012

I don't know what to think. I'm listening to an interview right now with someone who'd also interviewed Mike Daisy about this story before the TAL airing and apparently Mike Daisy just plain lied. He was asked directly by this interviewer if he saw the stuff at FoxConn with his own eyes and he said "yes."

SO, if there is anything to garner from this in terms of whether the workers are really working under these conditions and need help, we may never be able to garner that. Mike Daisy and his lies have muddied the waters and we'll probably never know the truth.

If he really wanted to help these people, he would have spent more time doing real journalism instead of intentionally misleading people to believe that his performance piece (which I think he's referred to this work as before) was actually the truth. Mike Daisy has done these people a disservice.