Apple and Foxconn pool cash for factory refresh

May 10, 2012
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Apple has taken some heat over conditions at Foxconn factories located in mainland China, although the company has been quick to address such issues. The latest development sees Apple and Foxconn sharing the costs to try and improve working conditions at the factories. Foxconn declined to say how much the companies were spending, or how the companies would split the investment.

Terry Gou, chief of Foxconn, believes the media perception surrounding the factories, where products such as the iPhone and iPad are made, has largely been unfair. In a statement, he said: “We've discovered that this is not a cost. It is a competitive strength. I believe Apple sees this as a competitive strength along with us, and so we will split the initial costs."

The figure remains a mystery, as does the percentage split between the company. This latest piece of news comes after Foxconn raised wages for workers in March following media criticism, along with a rare video of the iPad construction process being released last month in response to Mike Daisey’s “This American Life” report, which was later debunked.

Wage increases also has other manufacturers worried. Toshiba responded to Foxconn workers pay rise and reduced hours by saying it would also follow suit, and in 2010 Foxconn’s doubling of salaries had a ripple effect on the rest of the Chinese manufacturing industry. In response, some companies have already begun looking to Vietnam plus other cheap labor markets in order to keep costs down.

[via Reuters]


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