The Investor's Shelf — one book
Dying for an iPhone

Dying for an iPhone

Jenny Chan, Mark Selden, Pun Ngai
2020
T3 302 pages · about 5h 2m to read OL21665733Wgoodreads

Foxconn from the inside; the labour cost of the contract model.

Summary

Chan, Selden and Pun, academic sociologists studying Chinese labour, wrote this from more than a decade of research including interviews with Foxconn workers, factory visits and access to internal documents.

The empirical core concerns the labour regime at Foxconn, the Taiwanese contract manufacturer that assembles a large share of the world's consumer electronics including Apple products, employing over a million people in China. The authors document the recruitment of young rural migrants, the student intern programmes under which vocational school students were required to work on production lines as a condition of graduation, the dormitory system that places workers on the factory campus and extends managerial control beyond working hours, the production quotas and the pace of line work, the overtime that exceeds legal limits, and the disciplinary practices.

The suicides of 2010, in which at least fourteen workers died at Foxconn facilities, are the book's occasion. The company's response included installing nets on buildings and requiring workers to sign undertakings, which the authors treat as characteristic.

The structural argument concerns where the pressure originates. Apple and other brand companies set prices, specifications and delivery schedules, and the contract manufacturer's margins are thin, which means the pressure to meet demanding schedules at low cost transmits directly to the production line. The authors argue that audits and supplier codes of conduct do not change this because they do not change the commercial terms that produce it.

They also cover the Chinese state's role, the household registration system that limits migrants' rights in the cities where they work, and the official union's function.

The book argues a position and is written from a labour perspective. Foxconn and Apple dispute characterisations. The documentation of the intern programme and of the dormitory labour regime is detailed and is drawn from primary research.

Key takeaways 7

  1. Contract manufacturer margins are thin, so pressure on price and schedule from brand companies transmits directly to the production line.
  2. Supplier codes of conduct and audits do not change conditions because they do not change the commercial terms that produce them.
  3. Vocational school students were required to work on production lines as a condition of graduation, supplying labour outside employment law.
  4. Dormitory accommodation on the factory campus extends managerial control beyond working hours.
  5. Overtime exceeding legal limits is structural because base wages are set below what workers need.
  6. The household registration system limits migrant workers' rights in the cities where they work, which weakens their position.
  7. A brand company's specifications, prices and delivery schedules determine labour conditions at suppliers it does not own.

Who should read it

Operators and investors in consumer electronics and outsourced manufacturing who need to see how commercial terms determine supplier labour conditions.

Where it sits in the reference 2

Business models
Industries

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