Apple, HP, Dell begin investigating after suicides

May 26, 2010 Posted by brindils on May 26, 2010 in Business | 0 comments

Apple, HP, Dell begin investigating after suicides

Apple Inc., Hewlett-Packard Co. and Dell Inc. claimed they’re investigating operating circumstances at Taiwan’s Hon Hai Group following a mounting number of suicides at their contract manufacturer.

Apple is “saddened and upset” by the suicides and has a team evaluating Hon Hai’s countermeasures, explained Steve Dowling, a spokesman at the Cupertino, California-based maker of iPhones and iPads. HP claimed it’s investigating Hon Hai’s practices and Dell said it is examining reports for the world’s largest contract manufacturer, also known as Foxconn Technology Group.

The probes add towards the pressure on billionaire Chairman Terry Gou, who nowadays opened Hon Hai’s biggest Chinese production site towards media to defend operating circumstances that some labor- rights groups describe as a “sweatshop.” The fallout threatens to disrupt a $40-billion-a-year operation that builds everything from iPhones to desktop computers and televisions.

“Hon Hai wants to resolve the issue simply because the situation is also negative for Apple and HP,” explained Allen Pu, an analyst at Fubon Securities in Taipei who recommends investors “add” shares of Hon Hai Precision Business Co., the group’s flagship. “Clients may possibly reallocate some orders to other producers, though I still see Hon Hai keeping its role as the major supplier simply because no a single else has such sizeable operations.”

The chairman’s opening with the manufacturing facilities highlights the scrutiny the corporation is facing, according to UBS AG analyst Arthur Hsieh.

Never Seen Before

“This has in no way been noticed previous to, it is definitely unusual times,” stated Hsieh, who’s primarily based in Taipei. “It’s crisis control.”

There were nine suicides and two attempts at the Chinese operations this year, a Hon Hai official explained yesterday, declining to be identified. At least four of the deaths occurred this month.

“We’re in direct contact with Foxconn senior management,” Apple’s Dowling mentioned. “Apple is deeply committed to ensuring that problems throughout our supply chain are safe and workers are treated with respect and dignity.”

HP is investigating “the Foxconn practices that may perhaps be associated with these tragic events,” the Palo Alto, California-based personal computer maker explained in an e-mail.

“Any reports of poor working conditions in Dell’s supply chain are investigated,” Jess Blackburn, a spokesman for Round Rock, Texas-based Dell, explained in an e-mail. “We expect our suppliers to employ the exact same high standards we do.”

Dell rose 7 cents to $13.40 at 9:31 a.m. New York time in Nasdaq Stock Market trading. Apple climbed $5.48 to $250.70. HP gained 36 cents to $46.21 in New York Stock Exchange composite trading.

Family Mourns

Gou, who says he hasn’t slept well within the past month, loaded journalists aboard a fleet of five buses to tour the Longhua campus in Shenzhen, southern China, as the household of Ma Xiangqian, one of the deceased, looked on from the south gate. The parents, who say Ma didn’t kill himself, knelt around the ground crying, holding on to a framed picture of their dead son.

Within one particular from the factory buildings, rows of workers wearing white jackets, caps and blue slippers assemble motherboards in an area the size of an American football field.

“Most of the employees here are young so you will find lots of boy-girl issues,” stated Huang Lixia, 25, who supervises a line of 35 individuals.

Most with the complications involve new laborers, Chen Zhonglei, 30, who manages 200 workers that assemble printers, explained from a support center inside the campus.

“These young personnel coming in now aren’t as ready to take on hardship as a lot as I was when I arrived,” said Chen, who’s worked at Hon Hai for a decade. “Psychologically they’re far more fragile. When I started I didn’t think about so a lot of factors.”

‘Trampling’ Sweatshop

Foxconn is usually a sweatshop that “tramples” workers’ individual values for the sake of efficiency, Li Qiang, executive director of New York-based China Labor Watch, wrote in a May 21 statement. Gou on May 24 said his firm isn’t a sweatshop.

Suicides among Chinese factory personnel have far more than doubled inside the industrial south this year, compared with all of 2009, Li wrote inside a report currently, citing a survey of 201 workers. The survey excludes the deaths at Hon Hai.

“Foxconn may possibly not be a sweatshop inside sense that it physically abuses its workers or forces them to operate extra hours,” the China Daily Newspaper wrote in an editorial right now. “That does not mean it really is showing adequate humanitarian concern for its employees. And, neither does it imply that it can be doing adequate to foster a corporate culture that helps employees strike a healthier work-life balance.”

Students and Scholars Against Corporate Misbehavior, a Hong Kong-based organization that monitors corporations, mentioned yesterday it will ask consumers to boycott the next iPhone as Apple really should share the blame due to the fact it hires contract suppliers just like Hon Hai to make its goods.

Gou mentioned he plans to enhance psychological testing to support avoid a lot more suicides.

“I provide my sincerest apologies to society, the entire public, all our employees and their families mainly because we had no way of preventing these things from happening,” Gou mentioned as he bowed at a press conference these days. “Will it occur again? From a logical, scientific standpoint, I don’t have a grasp on that.”