Bloomberg News

Apple Won’t Turn ‘Blind Eye’ to Supply-Chain Problems, Cook Says

February 01, 2012

Jan. 27 (Bloomberg) -- Apple Inc. is “attacking problems” with conditions at its supply factories and is committed to educating workers about their rights, Chief Executive Officer Tim Cook said in an e-mail to his employees.

The letter, carried on the website 9to5mac.com, comes amid criticism of conditions at plants in China that help make Apple devices such as iPhones and iPads. Employees work excessive overtime, have died in factory explosions and live in crowded dormitories, the New York Times reported on its website Jan. 25.

“We will continue to dig deeper, and we will undoubtedly find more issues,” Cook said in the e-mail, which the website said was sent to all employees. “What we will not do -- and never have done -- is stand still or turn a blind eye to problems in our supply chain. On this you have my word.”

Steve Dowling, a spokesman for Apple, declined to comment.

More than half of the suppliers audited by Apple have violated at least one aspect of the company’s code of conduct every year since 2007, the newspaper reported, citing Apple’s public reports. In some instances, suppliers improperly disposed of hazardous materials and falsified records, the newspaper reported, citing company reports and advocacy groups.

Shares of Apple, the world’s most valuable technology company, rose to a record Jan. 25 after the Cupertino, California-based company said first-quarter profit more than doubled to $13.1 billion because of holiday-season demand for iPhones and iPads.

Foxconn Suicides

Apple’s profit margins have widened at the expense of main supplier Foxconn Technology Group, which cut prices to retain orders for iPhones and iPads. At least 10 Foxconn workers committed suicide in 2010, prompting the Taipei-based company to increase wages, put up safety nets and improve worker welfare.

Foxconn, the world’s largest contract manufacturer of electronics, said some members of its 1 million-person workforce threatened to jump from a plant building earlier this month to protest an internal transfer of employees.

“We care about every worker in our worldwide supply chain,” Cook wrote. “Any accident is deeply troubling, and any issue with working conditions is cause for concern. Any suggestion that we don’t care is patently false and offensive to us. As you know better than anyone, accusations like these are contrary to our values. It’s not who we are.”

Pollution caused by suppliers making Apple products in China “greatly endangers” public health and safety, according to an August report by the Institute of Public and Environmental Affairs. A blast at a Shanghai supplier to Apple injured 61 workers after aluminum dust produced by polishing cases for iPads ignited, China Labor Watch said last month.

Earlier this month, Apple said it agreed to let outside monitors into its supply factories to monitor conditions.

“We are attacking problems aggressively with the help of the world’s foremost authorities on safety, the environment, and fair labor,” Cook wrote in the e-mail. “It would be easy to look for problems in fewer places and report prettier results, but those wouldn’t be the actions of a leader.”

--Editors: Michael Tighe, Matthew Brooker

To contact the reporter on the story: Anand Krishnamoorthy in Singapore at anandk@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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