Bloomberg News

Apple CEO Reaffirms Commitment to Upholding Labor Conditions

February 15, 2012

(Updates with Cook comments on tablets in 12th paragraph.)

Feb. 14 (Bloomberg) -- Apple Inc. Chief Executive Officer Tim Cook said that the company takes working conditions seriously and that it’s pressing suppliers to meet stringent standards or risk losing business.

“We believe that every worker has the right to a fair and safe work environment, free of discrimination, where they can earn competitive wages and they can voice their concerns freely,” Cook said during a San Francisco conference sponsored by Goldman Sachs Group Inc. “Apple suppliers must live up to this to do business with Apple.”

Cook used the talk to reiterate remarks the company has made, and to explain why he believes Apple does more to ensure fair labor practices than any other technology provider. Apple, based in Cupertino, California, said yesterday that the Fair Labor Association has begun inspections of Foxconn Technology Group’s plants in response to criticism of conditions for workers assembling devices such as the iPhone and iPad.

Cook called the use of underage labor “abhorrent” and said that while it’s rare in Apple’s supply chain, the company is working to stamp it out. Using underage labor is a “firing offense” for Apple suppliers, he said.

“We know people have a very high expectation of Apple and we have an even higher expectation of ourselves,” Cook said.

Apple rose 1.4 percent to $509.46 at the close in New York. The shares have gained 26 percent this year.

Labor Standards

Apple became the first technology company to join the Washington-based Fair Labor Association last month. Protesters demanding that Apple develop a worker-protection strategy to prevent abuse at its suppliers’ facilities presented the company with petitions signed by more than 250,000 people last week at its Grand Central store in New York City.

Cook also asked for forbearance from investors while the company discusses how to best use its growing cash pile.

“We have more cash then we need to run the business on a daily basis,” Cook said. “I only ask for a bit of patience so we can do this in a deliberate way.”

Apple, under co-founder Steve Jobs, expanded from personal computers into areas such as phones and tablets. Cook, who succeeded Jobs as CEO in August, said his goal is to maintain Apple’s focus on a limited number of selected “great products” and on the culture Jobs instilled before his death in October.

“Apple is this unique company,” Cook said. “I’m not going to witness or permit the slow undoing of it, because I believe in it so deeply.”

Taking Sales

Cook said he’s convinced the market for tablets such as the iPad will become bigger than that for PCs. While the iPad has cut into sales of Mac computers, it’s taken even more sales from PCs based on Microsoft Corp.’s Windows operating system, the CEO said.

“It’s just a matter of time” for tablet sales to surpass PCs, he said. “It’s too much of a profound change for it not to.”

Cook also said Apple has called its TV effort “a hobby” because it’s not as large as the company’s other businesses, even though current customers enjoy the product. He emphasized that Apple “doesn’t do hobbies as a general rule” and said the company needs to find something that could be more mainstream.

Jobs told biographer Walter Isaacson before his death that Apple had been working on a new television product.

--Editor: Tom Giles, John Lear

To contact the reporters on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net; Dina Bass in Seattle at dbass2@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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