Apple, Foxconn To Share Costs For Improving Factories in China

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Apple, Foxconn To Share Costs For Improving Factories in China

Apple Inc. (NASDAQ:AAPL) has received a lot of negative attention in the last few months regarding their Foxconn factories in China. There have been investigative reports that the factory’s working conditions are poor and the employees receive little pay for treacherous labor.

A few months ago, Apple’s chief executive officer Tim Cook paid a visit to the Chinese factory to see what the fuss was about and in March, the Fair Labor Association discovered a number of violations at three different factories of Foxconn Technology Co., Ltd. (TPE:2354). The company then made a promise that they would make improvements.

In a recent statement at a groundbreaking, Foxconn CEO Terry Gou said they were going to work with Apple to improve their factories. He mentioned that they wanted to transform their export factories to be “more domestic market oriented.” At press time, there were no details given about these changes nor was there an estimated amount of money they would spend.

The groundbreaking for a new 10,000 square-meter-operational headquarters in Shanghai is expected to open in 2015. .

Apple’s recent crackdown on poor working conditions at Foxconn is creating a ripple effect in China. TTM Technologies, a company that makes circuit boards, reduced overtime and and increase wages.

This wasn’t the only attempt to make things right for employees. Two years ago after a few employee suicides, the company offered to more than double their basic compensation to $290(1,800 yuan).

Foxconn currently employees 1.2 million workers at their factories, most of who can’t afford the products they assemble.

It’s good to know that Apple and Foxconn are working together to make improvements to their factories, my only qualm is they didn’t share more details. Of course, they may have yet to agree on the details but I wish they shared more of their visionary ideas and plans. It’s going to take a lot more than a small pay increase to improve working conditions.

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