Making Smartphones Without Condoning Poor Work Conditions

NEWS ANALYSIS: In the wake of Apple's black eye from the reports of poor working conditions at its Foxconn contract manufacturing operations in China, there is at least one company that's willing to pay close attention to how its production workers are treated.

After writing an article about rising concerns over the working conditions in the factories operating in China by Foxconn, Apple's contract manufacturer for iPhones and iPads, I heard from readers about a number of points. First, there are a lot of readers who think Apple's profit margins are obscene and point to the obviously marginal conditions at its contract manufacturer as evidence that greed rules at Apple.

A couple of other readers dropped me a note to let me know that not every smartphone or consumer electronics maker puts up with poor working conditions in return for higher profits. One reader claimed that LG and Samsung, both based in Korea, have much higher standards.

Readers also asked about the idea of a Fair Trade smartphone by my friend Rob Pegoraro, who writes for USA Today and Discovery Communications. You can see Rob's question in the comments section of my earlier column at the link above. But the idea intrigued me. Is it possible, I wondered, to build a smartphone in which the components are responsibly produced at factories where workers properly treated?

So I started working the phones calling both carriers and device manufacturers. I know that while the carriers don't actually manufacture the phones they sell, they have great influence over the manufacturers. On the other hand, the device manufacturers have direct control. If they want to insist that their contract manufacturers follow a specific code of conduct, they make that a condition of the contract, and then enforce it.

One of the reasons Apple is in so much hot water about the working conditions at its contract manufacturing plants in China is because Apple has claimed that these conditions don't exist and that the company can prove it through auditing. Clearly the audit results are works of fiction. The violations of Apple's labor policies are so egregious that the company's managers are either clueless or incompetent or they just don't care. I don't think Apple employs managers who are clueless or incompetent, and despite Apple CEO Tim Cook's protests to the contrary, I think the company can't see far enough past its greed to actually take a close look at what's going on in its suppliers' factories.

Fortunately, not every company operates like Apple. But, unfortunately, a surprising number of device manufacturers really don't want to talk about the issue, assuming perhaps that it will distract from their main message or perhaps that somehow an exception will surface and make them look bad.