Foxconn too big to fall

Apple chief executive Steve Jobs has broken his silence over Foxconn's suicide scandal. He says Foxconn is not a sweatshop and the suicide rate at the company's manufacturing base in Shenzhen is below the per capita rate in the United States.

Jobs defended Apple's major contractor at the top technology executives' annual gathering D8 conference in California, declaring his firm is on top of the situation at Foxconn.

"I can tell you a few things that we know: Foxconn is not a sweatshop. It's a factory, but they have restaurants and movie theaters," Jobs said. "They've had some suicides and attempted suicides. They have 400,000 people there. The rate is under what the US rate is, but it's still troubling."

Why did Jobs feel he had to defend Foxconn with remarks that may be considered controversial at present? Apple's iPads may provide the answer.

Since iPad first hit the market 60 days ago, the American technology giant has sold more than two million units. The frenzy is more intense than that of iPhone's launch in 2007. But, after 10 deaths at Foxconn's Shenzhen plant, labor right activists have called for a boycott of Apple products because Apple is Foxconn's biggest client.

It is clear in Jobs' statement that he has no intention of replacing Foxconn, especially now as it would undermine the launch of its best-selling iPad.

But how can Apple protect its most important revenue driver? Rumors are rife the California-based company will pay an extra amount to Foxconn workers by setting aside about 2 percent of the final retail price for a given product to subsidize Foxconn's pay raise.

If true, it would be a revolutionary initiative. By donating a tiny fraction of iPad revenues to workers' pay, Jobs will be putting a humanistic face on iPad, defending it against boycott calls. No wonder Foxconn is increasing workers' wages by 30 percent instead of the earlier projected raise of 20 percent.

Elsewhere in China, Honda is also moving fast to end the strike by more than 1,800 workers at its Foshan parts plant by offering a 24 percent pay hike.

Are there any lessons to be learned from the Foxconn suicide scandal and Honda's strike? The immediate reaction in the West is they serve as a wake-up call for multinational companies to reconsider their strategies in choosing China as the destination of choice to set up production lines because of the mainland's low labor costs.

This seems to be an alarmist warning. As said before, the double-digit pay rises won't immediately affect China's role as the world's major manufacturing base because, given the small base, salary payouts will still be relatively limited.

If the same happened elsewhere - say, British Airways - the airline would have to shut down immediately.

Hopefully, the intense public discussions about Foxconn will arouse the authorities' attention to genuine sweatshops across the mainland, where workers are not even paid the minimum wages, while having to toil long hours in dangerous and dirty environments.

This is the area deserving greater attention.*Overset by 610.*

英文虎報 Central Station | By Mary Ma