Making Smartphones Without Condoning Poor Work Conditions

By Wayne Rash  |  Posted 2012-02-01

Making Smartphones Without Condoning Poor Work Conditions

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.

Motorola Says It Pays Closer Attention to Work Conditions


But I was able to find a manufacturer that not only was willing to talk, but is proud of its track record when it comes to proper treatment of its workers.

Motorola, maker of the Xoom, the Droid Razr and now the Droid Razr Maxx, makes a big deal of corporate responsibility. Unlike most companies, Motorola exerts direct responsibility over everything from proper mineral extraction to environmentally safe materials handling. The company also enforces rules about working conditions and supplier conduct.

The difference between Apple and Motorola is that Apple does its manufacturing through contractors. Motorola owns its own factories, and the people building Motorola products are company employees. Motorola does use some contract manufacturing, but according to Christa Smith, Motorola's director of  Corporate Communications, audits are frequent and ongoing. What's more, Motorola discloses the results of those audits to the public. The reports make interesting reading, and they highlight the complexity of managing a global workforce with a wide range of practices that are considered acceptable.

And therein lies the difference between Apple and another major manufacturer. Motorola could probably increase its margins slightly by using only contract manufacturing, but by owning its own factories it retains control over the process. This means that the company can ensure that proper procedures and practices are followed, and it has the leverage to enforce its policies when they're not.

But perhaps what's more important is that Motorola is willing to open the process to public scrutiny. The results of the company's inspections are there to see, warts and all. What's also interesting to see is the level of detail in the audits. Who knew that proper placement of exit signs would be an important finding? Or that one problem with managing work hours is the desire of the workers to work more hours so they can earn more money?

Clearly, it's easy to look at Apple and throw stones. But it's more useful to point out another company that might be doing it right and show examples that demonstrate that there are other ways to manufacture mobile devices than the way it's done by Foxconn for Apple. While I haven't spoken with every device maker (although I'm trying to), I suspect that at the very least this issue is now very much in the consciousness of all U.S. device makers. That alone can help improve things. 

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