Inside Foxconn, Maker Of The iPhone

From Bloomberg Businessweek

Foxconn, the Taiwanese company that manufactures iPhones and iPads, was in the news this year as more than a dozen factory workers leaped to their deaths. NPR's Melissa Block talks with Bloomberg Businessweek reporter Frederik Balfour, who spent time at the Foxconn plant in Shenzhen, China, about what the company's response has been, and how effective it's been.

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ROBERT SIEGEL, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MELISSA BLOCK, host:

I'm Melissa Block.

And it's time now for All Tech Considered.

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BLOCK: As 2010 heads to a close, we're taking a look back at the company behind one of this year's most popular gadgets: the iPad. We're not talking about Apple, we're talking about Foxconn. By September, the Taiwanese manufacturer had shipped more than seven million iPads from its factory in China. That's on top of the 40 million iPhones it produced in the 2010 fiscal year. But Foxconn also made news this year for another reason - more than a dozen of its factory workers leaper to their deaths.

Frederik Balfour wrote a lengthy story about Foxconn for Bloomberg Business Week earlier this year. He joins us from Hong Kong. Welcome to the program.

Mr. FREDERIK BALFOUR (Reporter, Bloomberg Business Week): Thank you, Melissa.

BLOCK: We should explain when we talk about Foxconn's manufacturing in mainland China, these are operations on a scale that's just hard to fathom.

Mr. BALFOUR: It certainly is. They now employ more than one million people. The largest factory, which is in Shenzhen, the one that I visited, has over 300,000 people. It's an entire city - not a particularly attractive city, but it's got Internet cafes, it's got banks, it has its own postal code. It's absolutely massive. And these are people creating the iPads, Sony Playstations, laptops for Hewlett-Packard and for Dell - the entire supply chain.

BLOCK: And the head of this company, of Foxconn, is a man named Terry Gou. He's the richest man in Taiwan - splits his time between Taiwan and China. And you had a chance to talk with him at a point where he was basically living at this plant in Shenzhen because of the suicides, right?

Mr. BALFOUR: Absolutely. The odd thing was the response took about three months. The first two or three suicides, he just figured it was a statistical blip. And it wasn't till the fifth employee jumped off a building that he realized he had a problem on his hands. And suddenly they went into crisis mode. They hired a PR company, they got counselors in, they had experts on suicide come in.

And then they decided to rethink their model, which was instead of creating entire cities for their employees, to try and build new factories in the interior of the country and let the government take care of housing and feeding them.

BLOCK: And the notion of putting factories in the interior of the country, as I understand it, Frederik, would be that workers would be closer to their families. These are migrant workers who've traveled huge distances to work in Shenzhen. This would at least put them closer to home.

Mr. BALFOUR: Exactly, Melissa. And it does make sense because they had no social support network whatsoever in places like Shenzhen.

BLOCK: You know, Frederik, one detail about the response to the suicides that we haven't talked about is that they ended up stringing nets outside the dormitory so that if people were to jump, they would land in the nets.

Mr. BALFOUR: And, sadly, one person did try to jump and landed in the net and still died. But the nets are still up. So, they're still very aware of the potential problems.

BLOCK: When you were at the Foxconn plant, you spoke with about two dozen workers, what did they tell you about conditions there? And did it seem to you like they were working essentially in a sweatshop?

Mr. BALFOUR: No. I've visited plenty of sweatshops around the world, from Central America to Vietnam. This is definitely not a sweatshop. The thing is, though, that these workers are probably under more pressure than anyone else working in China. The supervisors are extremely draconian. There's no margin for error. The sophistication of the process and the products that they're producing means that they're always under the gun. And that, I think, is what contributes to the high stress level at Foxconn.

BLOCK: Is there any indication that the measures that Foxconn took, that that's had an effect, that the rate of suicides has dropped?

Mr. BALFOUR: Yes. The rate of suicides has dropped, Melissa. There's only been one since the beginning of the summer. I think the company really is making a concerted effort. They're under a lot of pressure both from their customers and from the Chinese government to try and address the problems and the needs of migrant workers. And it's something that the entire country faces. It's not just Foxconn. They just happen to be the biggest.

BLOCK: Well, Frederik Balfour, it's a fascinating story. Thanks very much for talking with us.

Mr. BALFOUR: Thank you, Melissa.

BLOCK: Frederik Balfour covers Asia for Bloomberg Business Week. He's based in Hong Kong.

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