"This is really bad, someone should be in China driving this."

Have you seen the articles on TechCrunch about the workers in the Chinese iPhone plant maimed in the line of duty without receiving medical care? The overwhelming response in the comments has been a kind of fatalism you rarely see in Silicon Valley: observers all agree that we as consumers are powerless, that Apple itself is powerless, with no choice in how its phones are manufactured.

Why not just say “Stop buying all electronics and go back to the stone age!” asks Nitin Alabur, in the most popular comment on one postIt’s such a farce to blame just Apple for all this!

The idea that Apple won’t listen or can’t change is the real farce. In this age in which every corporation carefully monitors the faintest tweets about its brand, companies worry obsessively about how buying their products makes consumers feel.

As the CEO of Redfin, I have sat in meetings with the entire executive team worrying about whether policy decisions — the decision to skirt a low-priced area for example — would tarnish our reputation for social responsibility among a handful of consumers.

And Apple worries more than most. You pay more for an Apple product because of how it makes you feel when you buy it: as if you’re striking a blow for creativity over corporatism, even fascism. That feeling is Steve Jobs’s greatest achievement. It probably accounts for a third of Apple’s market value.

So when we try to convince ourselves that Apple doesn’t care what we think of Foxconn, we’re hoping to be more powerless than we are. At no point in history have consumers been so carefully analyzed, courted and catered to, yet we act like no one would ever listen to us. If Egyptians were this way, Hosni Mubarak would be looking forward to another thirty years in power.

Retailers are far more sensitive to criticism than Mubarak. Consumer concerns over Wal-Mart’s labor and purchasing practices have, for example, had a greater impact on our immediate world than any election: Wal-Mart is now the world’s largest seller of organic foods, and it just began pressuring its suppliers to offer low-fat, low-salt alternatives to unhealthy snacks.

Why would Wal-Mart do this if all consumers cared about was low prices? The company certainly didn’t start that way. It changed because it realized how miserable shopping at Wal-Mart makes people feel, regardless of the money they are saving. Imagine if you felt that way when you fiddled with your phone.

The first reaction would come from Steve Jobs, who would ask Foxconn to open a clinic for its 450,000 workers to get on-site care. With billions of dollars on the line, Foxconn would listen to Jobs more carefully than to Obama or any other American.

We know Foxconn would listen because Apple’s power over its suppliers is legendary. No other firm can refuse to pay suppliers for prototypes, but Apple does: the iPhone business, Apple argues, is so lucrative that suppliers shouldn’t worry about prototype costs when competing to be an Apple manufacturer.

And Apple has iPhone manufacturers other than Foxconn, insisting as a matter of policy on multiple suppliers for all of its products. In the past, the company hasn’t been timid about using its choices to create more leverage. Just ask its acting CEO, Tim Cook:

Cook’s relation with the supply chain is best described by an anecdote reported by CNN, related to the period when Cook joined Apple in 1998 to straighten the operational morass that Apple was in. In a meeting convened to tackle a problem in China, he had said: “This is really bad, someone should be in China driving this.” Thirty minutes in the meeting he chided Sabih Khan, the then operations executive, saying “Why are you still here?” Khan responded by immediately booking a ticket to China, sans a change of clothes.

There is a group of Apple folks in Cupertino right now, meeting to discuss whether the Foxconn publicity will blow over or blow up: into a Facebook cause, a Twitter trend, a consumer revolt. If it does, Mr. Khan will soon find himself walking off a flight to China, in yesterday’s clothes. If it doesn’t, we only have ourselves to blame.

Discussion

  • http://dannyman.toldme.com/ Daniel Howard

    I have tended to feel that Apple is more surface polish than substance anyway. Like a pretty woman with nice skin who gets you to turn your head, but if you get to know her it turns out she's a smoker who sits around the house watching TV all day, but she's good with makeup.

    Those plain-looking Dell computers know that if they want a consumer to commit they're going to have to forego flair for things like a reasonable degree of corporate responsibility and the like. They can't just skate by on their sexy industrial design.

    But that's just one consumer's brand perception. I don't need to shell out extra for the shiny brand because I am confident that I can get a better experience from the plain Jane brand.

    -danny

  • http://www.nitinalabur.com Nitin Alabur

    Wow, thanks for quoting me! I had no idea that my comment on that TC article was among the most popular ones!

    When you discuss the affects the laborers at Foxconn, it should also be noted that you are discussing about the labor force of a developing country.

    I am not sure if the Foxconn/Apple bashers have ever been to a developing country (lets say China or India). I am from India, and I have seen many MNCs (Big American corporations) making a huge difference in the working conditions for the laborers hired locally (even though, by American standards if these conditions were pitiable).

    Looking at Chinese work force from your experience in US is not going to help the Chinese laborers. Assuming Foxconn employs 10% of China's labor pool, and provides the best amenities/pay etc to the satisfaction of all Foxconn bashers, its a gross injustice for the remaining 90% thats yet to be employed or yet to receive such working conditions. Its purely demand-supply problem. There's too much of a supply of labor in China, and this leads to people willing to work at a cheaper cost to the company than the current ones employed

    Apple could always choose to go in for a more expensive supplier. But the costlier option does not equate to reliable option!

    Also sudden change in earning capacities wrecks a havoc for the locals that most people from the developed countries fail to realize. Most often such indiscriminate actions result in inflation.

    Apple is good at designing awesome devices, it should stick to it. Twitter and Facebook are good at designing awesome communication platforms, and they should stick to that. Apple/Twitter/Facebook/Google can help the oppressed buy ensuring that their products are not modified to the whims and fancies of the country rulers.

    Reforms are required. But only the ones that are going to help the people in the long run. Short sighted short term reforms end up being much more damaging than no reforms at all.

    • http://blog.redfin.com GlennKelman

      I've been to many developing countries Nitin. I am not arguing for free Diet Coke in the break-room. We're talking about people who have been physically and permanently mangled & disfigured without receiving any medical care. It seems like Foxconn and Apple could afford to do better, if either company thought that it would affect demand for its products.

      • http://www.nitinalabur.com Nitin Alabur

        I tried looking for the article (an awesome piece on Inc or Forbes magazines) about how foxconn works, but couldn't find it. It mentions these particular issues. I agree that Apple/Foxconn should do something. But what is it that they should do to be considered humane?

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