Meanwhile, in one of the main Chinese production centers for that device, overstressed workers rioted.
As the initial reports have moderated in tone, it has become apparent that Foxconn may be as much victim as villain. Apple's demands regarding timing and the ramping up of production caused Foxconn to transfer thousands of its 1.1 million Chinese workers from their homes to factories in the hinterlands to make up for production and human resources imbalances. There were even reports that students had been forcibly drafted from certain technical universities and were threatened with expulsion if they did not cooperate. Demands that Foxconn zealously protect Apple's marketing and production secrets led to heavy-handed security constraints that no modern worker would tolerate and, as events unfolded, that few Chinese are willing to endure either.
It would be easy, once again, to beat up on Foxconn. But their problems betray a larger, structural concern in the global labor market. The company may, arguably, be the largest private employer in the world. But the profits it generates on production of the hot new phone are miniscule compared to those Apple collects. That imbalance is reflected in the pay and working conditions Foxconn can offer those who work on these assembly lines. This arrangement may simply be unsustainable given the demographic changes in China, the expectations Apple has created among its followers and the economics of global production.
This may bode well for the highly touted return of manufacturing in the US and parts of Europe. But it may also be a warning. The assumption that workers can always be found to meet the margins expected of tech investors and the managers who serve up their returns could be transitory. Competition may force re-examination of the global model as it has evolved over the past three decades. As the song said (albeit in a different context), 'if they can make it here, they can make it anywhere.' JL
Michael Martina reports for Reuters via The Guardian:
A brawl at a Foxconn factory that disrupted production at Apple's main China supplier for 24 hours highlights regimented dormitory life and thuggish security as major sources of labour tension in China.
While unrest often flares in China as low-paid workers agitate for better pay and conditions, the conflict at Foxconn's Taiyuan facility in northern China was notable for its scale and severity, even if not directly related to shop-floor conditions.
It marked a blow to Apple's top supplier as it ramps up production to meet orders for the iPhone 5 and seeks to rehabilitate its image after a labour audit this year found flaws.
Details of the melee remain sketchy as police and company officials investigate, but employees interviewed by Reuters said tension between workers and security guards boiled over on Sunday evening after a worker was severely beaten.That led to thousands joining in and about 40 people were injured, according to Foxconn and Chinese media.
The movement of workers from other Foxconn plants to Taiyuan may have contributed to friction between groups of labourers facing heavier workloads and crowded dormitories as production intensified to meet Apple targets, rights groups and workers said.
It was quiet on Tuesday outside the factory, with police keeping watch. Gates had been were torn off hinges and windows smashed, and a voice on a loop recording broadcast over a loud speaker appealed for people to maintain order.
"There were thousands of bystanders and they just couldn't control it. It was just smash and destroy," said a 29-year-old worker who would only give his surname Xiang.
Xiang said several thousand police were eventually deployed to quell the unrest.
Foxconn Technology Group of Taiwan, the trading name of Hon Hai Precision Industry Co <2317.TW>, is the world's largest contract maker of electronics for global brands such as Hewlett Packard , Nokia and Dell as well as Apple .
Foxconn said on Tuesday the one-day closure would not disrupt supplies from the factory where 79,000 people work.
The company said the unrest was triggered by a personal dispute that spun out of control, rather than harsh conditions in the factory.
Louis Woo, a Foxconn spokesman, said the security personnel involved were under contract with a third party at a privately managed factory dormitory, adding that their attitude "is not too good".
In the past, Foxconn security personnel have been known for bullying and as tough enforcers of efforts to stop theft, including the pilfering of Apple prototypes, with workers being subjected to stringent body searches. On one occasion, Foxconn guards roughed up a Reuters journalist outside a factory in Shenzhen.
APPLE "RESPONSIBILITY"
Interviews with several Taiyuan workers said some tension had arisen because of the deployment of workers from other Foxconn plants to bolster manpower in Taiyuan, with friction between workers from different provinces including Henan and Shandong.
"This happens in many companies, especially big ones," Woo said of the movement of workers around the country.
"We have 1.1 million workers in total in China, the advantage is we can mobilise our workers when one business line suddenly needs more people. Relocation happens very often."
Some labour groups say ultimate responsibility for such strains rests with Apple, which they say puts profit above workers' welfare despite pledges to cut overtime hours and improve workers' livelihoods.
"The whole Apple production chain has problems," said Li Qiang, with the New York-based China Labor Watch, that has scrutinised Apple and Foxconn for years.
"Its sales and marketing strategy involves launching a product suddenly, without maintaining much inventory ... so the subsequent product shortages help build demand, but also place extreme pressures on workers."
Foxconn has begun a series of reforms after facing accusations of poor conditions and mistreatment of workers.
The company does not confirm which of its plants supply Apple, but an employee told Reuters that the Taiyuan plant was among those that assembled and made parts for the iPhone 5, while some workers on the ground said they were making the iPhone 4s.
Li Qiang, the labour activist, said workers at Foxconn's giant plant in Zhengzhou, in Henan province, were working largely on the iPhone 5, and were also facing great pressure, with overtime of about 70 hours a week common, despite pledges by Apple and Foxconn to cap work at 60 hours a week.
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