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Foxconn Interns Worked Illegal 11-Hour Shifts To Meet iPhone X Demand

Summary:
Apple and Foxconn have a well-documented history of labor abuses ranging from underpaying employees to compulsory over time that have been blamed for a slew of deaths and suicides among Foxconn's workforce. These abuses were widely covered in the media around 2012 but largely disappeared from the headlines after Apple CEO Tim Cook said he would pressure Foxconn into adopting more humane labor conditions. But apparently the unprecedented production problems that plagued the company's rollout of the iPhone X put Foxconn in an uncomfortable situation where they couldn't find enough seasonal workers to ramp up production fast enough. To compensate for the shortfall, the company recruited "interns" - who were also studying as full-time students - to work grueling 12-hour shifts at a factory

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Apple and Foxconn have a well-documented history of labor abuses ranging from underpaying employees to compulsory over time that have been blamed for a slew of deaths and suicides among Foxconn's workforce. These abuses were widely covered in the media around 2012 but largely disappeared from the headlines after Apple CEO Tim Cook said he would pressure Foxconn into adopting more humane labor conditions.

Foxconn Interns Worked Illegal 11-Hour Shifts To Meet iPhone X Demand

But apparently the unprecedented production problems that plagued the company's rollout of the iPhone X put Foxconn in an uncomfortable situation where they couldn't find enough seasonal workers to ramp up production fast enough. To compensate for the shortfall, the company recruited "interns" - who were also studying as full-time students - to work grueling 12-hour shifts at a factory in mainland China. The story was uncovered by the Financial Times, which sent a reporter to China to talk with Foxconn interns, who worked the long hours. This violated not only Apple and Foxconn's policies, but local laws governing labor abuses.

The students, who are doing the internships for school credit, say they have little choice but to follow their supervisers' orders.

Six high school students told the Financial Times they routinely work 11-hour days assembling the iPhone X at a factory in Zhengzhou, China, which constitutes illegal overtime for student interns under Chinese law.
The six said they were among a group of 3,000 students from Zhengzhou Urban Rail Transit School sent in September to work at the local facility run by Taiwan-based Apple supplier Hon Hai Precision Industry, better known as Foxconn.

The students, aged 17 to 19, said they were told that a three-month stint at the factory was required “work experience” that they had to complete in order to graduate.

“We are being forced by our school to work here,” said Ms Yang, an 18-year-old student training to be a train attendant who declined to use her first name for fear of punishment. “The work has nothing to do with our studies.” She said she assembled up to 1,200 iPhone X cameras a day.

The school declined to comment.

Apple said an audit has turned up “instances of student interns working overtime at a supplier facility in China”, adding “we’ve confirmed the students worked voluntarily, were compensated and provided benefits, but they should not have been allowed to work overtime”.  

Foxconn said that “all work was voluntary and compensated appropriately, [but] the interns did work overtime in violation of our policy” prohibiting student interns working more than 40 hours a week.

When confronted by the FT, Apple and Foxconn acknowledged that they were aware of student “interns” working overtime and said they were taking steps to end the practice. Both companies insisted that the students were working voluntarily, and that Apple had a strict policy prohibiting interns from working more than 40 hours a week. However, given the iPhone X’s unprecedented production problems linked to its facial-recognition features, Apple management was willing to tolerate a few “violations” of the company’s policy.

The launch of the anniversary iPhone X was marred by production issues and was delayed to November from Apple’s typical September release date. The weeks of idle capacity caused Foxconn’s quarterly profit to drop 39 per cent.

According to a long-time Foxconn employee, the Zhengzhou factory hires students every year during the busy season between August and December. Such hiring can swell numbers at the plant from a base of 100,000 to more than 300,000 workers producing up to 20,000 iPhones a day, the employee said.

But this year, the need for seasonal workers was greater, the employee added.

“The purchasing practices of Apple and others are designed to cut costs, and do things ‘just in time’,” said Jenny Chan, assistant professor at the Hong Kong Polytechnic University. “This leads to the use of student labourers who can be flexibly hired."

In accordance with its “preferential policies” meant to keep Foxxconn happy and thriving, the local government in Henan, where the Foxxconn factory is based, helped the company recruit interns from vocational schools.

According to the FT, the regional government issued notices to schools in the central Chinese province to send their “work experience students” to Foxconn.  Students also came from the nearby cities of Kaifeng, Nanyang, and Xinxiang, according to a Foxconn employee working on the iPhone X. Students also came from the nearby cities of Kaifeng, Nanyang, and Xinxiang.

Of course, Apple greatly benefited from Foxconn's abuses: Wall Street analysts are now predicting that Apple may have sold as many as 8 million iPhone X units since they went on sale late last month. And so far, it appears that neither Apple nor Foxconn will be held accountable for violating labor laws.

So, what's stopping it from doing this again next year?

Tyler Durden

Tyler Durden (a pseudonym) represents the idea that a return to truly efficient markets is a possibility and a necessity. After having experienced the inner workings of capitalism at various asset managers and advisors, Tyler believes that the current model is flawed and a deleveraging at every level of modern society is needed to reinspire the fundamental entrepreneurial spirit.

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