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Foxconn Pledges to Give Workers Greater Say

Foxconn Pledges to Give Workers Greater Say

After much publicity and protests regarding working conditions at Foxconn's Chinese manufacturing plants -- the ones where Apple's iPhone 5 are put together -- the Taiwan-based company says it will adopt some labor reforms. While the move is being praised as encouraging, it also raises questions about whether true U.S.-style union strategies can have an impact on China's culture.

By Rachelle Dragani MacNewsWorld ECT News Network
02/06/13 5:00 AM PT

Foxconn, the Chinese manufacturing firm that assembles Apple's iPhone, said it is implementing labor reforms in an attempt to address allegations of harsh working conditions and low wages.

"Foxconn is introducing measures to enhance employee representation in the Foxconn Labor Union and to raise employees' awareness of the organization," the Foxconn Technology Group said in a statement provided to MacNewsWorld by Yvonne Tung.

The Taiwan-based company, which assembles products for several major technology companies, has faced scrutiny from fair labor advocacy groups in the past. Rumors of abusive practices at the company's plants began spreading in 2010 after several Foxconn workers in the Shenzhen, China, factory apparently committed suicide.

Last year, Apple asked the Fair Labor Association (FLA) to assess Foxconn's factories. The FLA recommended increased wages, reduced overtime, improved communications and better safety measures.

Foxconn said it used those suggestions when implementing its new labor policies.

Union employee representative elections have been in place since 2008, with the latest election being held in 2011. Currently, in its Shenzhen facilities, Foxconn said that 70 percent of its elected employee representatives are workers; the rest are company staff and management.

Those elections will not change, but Foxconn said will be adding to the process. It will increase the number of junior employee representatives in union committees. The manufacturer said that an overview of those reforms has been printed and distributed in a pamphlet for employees called "The Guidelines for Junior Employee Representative Election Process."

The company said management will not be involved in the election process.

More Voices Heard

Foxconn's willingness to make the recommended changes is encouraging, said Wayne Eastman, professor in the Department of Supply Chain Management at Rutgers Business School.

"Foxconn's statement refers to enhancing opportunities for junior employees in the union," Eastman told MacNewsWorld. "That is promising."

Unlike some established labor union practices in other countries, China has not typically given a collective voice to the union, he said. Rather, it can count on opinions or votes from a few senior employees, which could make it easier for management to get its way. A system with increased input from all levels of Foxconn employment might be a step in the right direction.

Foxconn and other businesses in China -- and Chinese society as a whole -- can definitely benefit from moving away from a hierarchal, top-down managerial orientation "by providing opportunities for junior, as well as senior, non-managerial employees to exercise voice and take on leadership roles in appropriate areas," said Eastman.

If a Foxconn union is to be successful, it needs to strike a delicate balance, Eastman said. A union modeled on those in the U.S. wouldn't help the factory workers earn what they want, but developing a culture where they understand how to speak up about their needs and rights could help ease potential problems.

"For Foxconn to get a labor union along American lines would be a mixed blessing at best," he observed. "Going forward, Foxconn, Chinese workers and China will benefit if they can work together to move unionism with Chinese characteristics away from a focus on collective bargaining, and toward a focus on fostering employee participation."

Apple Does Its Part

Apple, by asking for the FLA report and responding to other Foxconn criticism, has done its part to convince consumers it cares about what is going on in its supply chain, said Shad Dowlatshahi, professor of operations at UMKC's Henry W. Bloch School of Management.

The company, however, has to master its own balancing act: keeping operations costs low and consumer sentiment high. For all of the increased scrutiny and condemnation from fair labor advocacy groups, real outrage might come if Apple device prices rise to accommodate more fair working conditions, Dowlatshahi pointed out.

"More accountability and using proper practices do not necessarily mean higher prices to the customers. Many things can be done without increasing the cost, because customers will definitely react if prices go up," Dowlatshahi told MacNewsWorld. "That is exactly what Apple wants to avoid. For good or bad, Americans are used to the concept of outsourcing and this has become a common practice in the U.S."

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