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Tech Industry

Shouting from Hon Hai

The Western press is currently rife with demands that Apple improve its manufacturing working conditions. But it is far from the only company that engages in such practices.

Hon Hai Precision Industry.

This is the corporate name for what the world knows as Foxconn Electronics, a Taiwanese company that is the world's largest electronics manufacturing services (EMS) provider, more commonly known as an original equipment manufacturer (OEM). It makes all manner of things for other companies, mainly electronics and components, which then go into other companies' products, hidden behind other brands. Almost a silent partner, if you will.

The monolithic company (which has facilities in Brazil, China, the Czech Republic, India, Malaysia, Mexico and Slovakia) has traditionally preferred to keep a low profile, but despite this, it has been in the news quite a bit lately. Suicide rates in particular have gained the attention of the Western press, which sadly flocked to the story not because of the poor working conditions, but because Apple is one of Foxconn's clients.

Given the way that things have been reported, you can hardly be blamed if you thought that Foxconn is only an Apple factory, churning out iDevices and nothing else. The need of editors to attach Apple to any technology headline to drive clicks, no matter how spurious, is downright sad. But it isn't just Apple that contracts Foxconn's services; the scale of the company is gargantuan. Crack open almost any electronics device, and there's a chance that you'll spot its logo on one of the components.

Foxconn Electronics makes many things for electronics companies. For example, these connectors found on a motherboard. (Credit: Lexy Savvides/CBSi)

History repeats

The recent happenings in China aren't the first time that Hon Hai has managed to penetrate Western consciousness.

Take the trials of Joyce (Wen-chi) Kuang, way back in 2004, who wrote an article claiming that Hon Hai would profit well from Intel's switch to the LGA775 CPU connector.

Hon Hai reacted, showing a startling amount of reach by suing the journalist and freezing her assets for seven months. Awareness came to the Western press via the Association of Taiwan Journalists, and Foxconn backed off.

It made the same mistake in 2006, when journalists Weng Bao and Wang You reported on working conditions in the Foxconn iPod factory. Once again, the Western media got involved, thanks to Reporters Without Borders, and Hon Hai backed off, slashing its compensation demand to a token amount of 1 yuan. Hon Hai, for its part, claimed that the allegations were false.

While things have started to improve, there's still a long way to go. Thankfully, the media's fixation on Apple has actually come to some good, with changes appearing to take place, thanks to investigations being performed by the Fair Labor Association (FLA).

A significant problem

To reduce this issue down to just Apple and Foxconn is naive. What of other OEMs and ODMs? What of Flextronics, Jabil, Sanmina, Celestica and Inventec? What of Wistron, Compal, Pegatron, Quanta and Unihan? Ability Enterprise, Altek and Asia Optical? Perhaps they are all above board — but without an investigation, who will know?

Quanta and Pegatron, at least, are in the FLA's firing line due to being Apple suppliers. But if changes are recommended and adopted, will only those who are working on the Apple supply line benefit? What happens when the watchers go away, and the media loses interest? Will human accountability suddenly become a buzz phrase like "free-range" eggs, causing companies to fall over themselves to be the most accountable? Or will we just forget after a while in the face of our shiny, new, affordable gadgets?

But reducing this to just electronics would still be trivialising the issue. This is a problem with the way in which business is run, a method that economies depend upon. The onset of the industrial age mandated cheap, mass production of items, something that created amazing demand and entirely new business models. Increasing profit is the highest purpose of a public company, and screwing down production costs is one of the most effective ways to maximise those margins. Cheap production costs can also keep final retail prices down, allowing more goods to get into the hands of more people.

A necessity of cheap prices, though, is cheap labour, and cheap labour is found where the lowest value is held on a human's time and worth. There are plenty of willing workers lining up, too, who see it as the only way to keep themselves and their families afloat. First-world lifestyles, and to a large degree first-world innovation in products, are dependent upon stepping on others. Even as China rises and pay and working conditions improve, companies are already looking at other regions, like South America, to move manufacturing bases to in order to bring down costs again. Turn a blind eye, make the boss happy, keep the company alive.

Human cost

The amount of human interaction still involved in assembly would surprise most people. At a particular factory I visited, it was somebody's job specifically to attach a PCI Express connector to a motherboard. The board was passed down the line for someone else to secure another specific component, then to another person, then to another. This was repeated endlessly at a relentless pace to fuel first-world desire. Perhaps working conditions were fine; they certainly looked okay while I was there, or were at least made to seem so. I was a detached observer, and clearly no company would own up to poor working conditions of its own volition. As a side note, a large percentage of electronics assembly employees are women; smaller fingers help with more delicate work.

Why not use machines? Well, the answer is simple.

Humans are cheaper.

It's a devotion to practicality over morality.

Would society have progressed as quickly as it has without these abuses? Is our current quality of living attainable without it? Perhaps that's one for the philosophers — it's certainly a controversial topic to saddle, and one that will no doubt cause heated arguments about whether it was worth the human cost.

It is because of this that I watch China's enthusiasm towards the iPhone's local release with a sense of unease. But perhaps that's just my Western sense distorting my view.

The fact that public consciousness is starting to see the problems created by the industrial age is a great thing. But more than just Apple and Hon Hai have to change. Unless corporations and the law catch up, and robotic manufacturing becomes significantly more viable, the abuses will continue — all in the quest to keep things cheap.