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Beyond Just Words – What Apple Could Do

By Kevin Meyer

The New York Times created a deserved furor last week with their article describing how the U.S. supposedly can't compete with China on manufacturing - specifically the manufacturing of Apple products.  As our fellow blogger Mark Graban points out in an excellent summary of that article, we shouldn't want to compete in that manner.  The stories of worker abuse and managerial tyranny are appalling.  Time magazine, in typical Time "hey please read us too" fashion, jumped on the bandwagon with an article on the human price of success.  And Apple CEO Tim Cook tried to deflect the PR carnage with a long email describing all that Apple supposedly does.

Don't get me wrong - I'm a huge fan of Apple... products.  I made the leap from PC to Mac a few years ago and haven't looked back.  I also own an iPhone and iPad, a 27" Thunderbolt display, use iTunes - the whole kit and kaboodle.  Those that haven't used Apple products for more than a few hours simply don't understand - the bloomin' stuff just works - and works like I want it to work - every time all the time.  That has value, and is why I happily pay more for Apple products.  Just this past weekend I watched a friend spend nearly an hour trying to get his Android phone to do what he wanted it to do.  Wow.  Really?  There's a reason why less than 1% of Apple users leave Apple.

I've heard several people call Tim Cook the world's greatest supply chain executive.  Sorry, I've never bought that.  Tim Cook executed a traditional "chase cheap labor" supply chain strategy in a great way.  But in my book that's not excellence - that's being the shining star of lemmings - the golden sheep if you will.  The China factory isn't necessarily a bad thing - one valid reason to have a factory overseas is to be closer to your customers, and there are a lot of potential customers in that part of the world.  But as nearly a singular factory serving the whole world?  With employees that are abused?  Sorry, no dice.

Apple, and Tim Cook, has done some good things.  They do audit their supplier's factories more than most companies.  They are taking some strong workers rights positions in their industry.  They are opening their kimono and exposing more of their dirty laundry.

Apple has $96 billion in the bank - think of what they could do.  More than just words and policy statements and such.

They could significantly increase the wages of their employees in China - even if they doubled their wages Apple would still have record profits.  But that could actually cause more harm than good.  Many workers simply want to earn enough to eventually go back to their home town or help their remote families.  Some social destabilization dynamics need to be understood.

However consider this, Mr. Cook:

How about immediately hiring and sending an Apple observer into every plant, perhaps every line in every plant, full time.  That way Foxconn wouldn't be able to shift workers from one line to another to hide abuses before audits occurred.  How much would that cost?  A million or two a year?  Put Foxconn on notice that this is not acceptable, with milestones that could transfer manufacturing elsewhere.  Difficult?  Sure.  Ethical business often is.

How about publicly saying (words...) that chasing low cost labor is not a long-term "manufacturing" option and then back it up by sinking a billion or two into developing truly innovative manufacturing methods and systems. Imagine what could happen if the same level of design prowess that was applied to product design was applied to manufacturing design.  Perhaps Apple could become the next Toyota - instead of just another cheap labor chaser lemming.

I could go on - and I'm sure there are lots of other ideas out there.  The bottom line is that thanks to its success - built on the backs of abused workers - Apple has the unique opportunity to change a global dynamic.  But that will take more than just words.

As my friend Shrikant Kalegaonkar tweeted this morning, the world is changing.  Voice of the customer now extends beyond products, and now includes the process for making the product.  As an Apple customer - and also a shareholder - I care about Apple's financial performance.  I want it to do well so it can return value to me in terms of new products and direct shareholder gains.  I don't have a problem with wealth being created and distributed commensurate with individual effectiveness.  But I also have a conscience, and increasingly I hate battling my conscience when using my Apple products.  I bet many Apple customers are feeling the same way.  That's dangerous for any company, and especially one like Apple which claims to embrace people.

So imagine.  Imagine what would happen if Apple took the high road, then backed up the words with serious, solid, perhaps expensive action.  Action that would change a global dynamic, showing that it is possible to be very profitable, very global, and very human-centered.  $96 billion gives Apple the ability to do something truly incredible. 

In addition to the actual improvement of the global condition, I bet a lot of folks would be impressed with the company - and would be inclined to buy its products.

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8 Responses to "Beyond Just Words – What Apple Could Do"

  • Mark Welch
    30 January 2012 - 2:07 pm

    I agree with you on all points, Kevin. The sad thing is, they didn’t get to $96 billion by caring a single tidbit about people, and that’s not about to change as long as the laws in China don’t change. That’s what’s needed for change. Apple won’t change these practices on their own. They don’t seem to care about ethical issues, but they would be more likely to comply with labor laws, which they claim they are doing now (and those laws are ridiculous). That is their standard retort: “We’re complying with the law.” I’m confident they’re figuring this firestorm of negative publicity will blow over and it’ll be back to business as usual.

    Yes, they’re in position to do something incredible, but they won’t, because putting people first didn’t get them to where they are. Trampling the weak and hurdling the dead is what got them there, and they’re not going to dance with the new girl who didn’t bring them to the dance to begin with.

    Cynical? No. Just realistic. The fact that they’re sitting on $96 billion tells us what their priority is, and it’s not people, regardless of how many workers have attempted or completed suicide attempts.

  • terry Durbin
    31 January 2012 - 6:31 am

    This is an excellent article, Kevin, and sets a robust challenge for Apple. And also for yourself. Put down the iPad. Switch to an Android based phone. Go back to a PC.

    If the issues are significant enough to justify Apple taking “serious, solid, perhaps expensive action” are they not significant enough for you to take, at least symbolic, action? Your position as a Lean voice provides a platform from which to demonstrate commitment as well as a pulpit from which to preach it.

    I do not use Apple products for all the reasons you stated in your blog. I know that the conditions in the factories where my Samsung phone was made may be every bit as poor as at Foxconn, but Apple is the bell-cow for this issue, and therefore the brand which should be targeted for our statements.

  • Jeff
    31 January 2012 - 6:48 am


    What role does the ease of doing business in China play? Cheap labor is one motivator but I wonder if the dramatic lack of interference from government and NGO’s in setting up and running manufacturing is not a large factor. The amout of paper work and permits needed to set up a factory in California (and the ongoing costs) have to be a major driver.

  • Mark Graban
    31 January 2012 - 10:07 am

    Thanks for the shoutout.

    “They do audit their supplier’s factories more than most companies.”

    You’re right to say they need more than spot audits. It sounds like the Foxconn factory needs some full-time adult supervision.

    They certainly need to start “thinking different” (bad grammar…)

  • Mark Graban
    31 January 2012 - 10:08 am

    One other thought — yes, Apple has $96B, but many of the changes don’t require much money (like job rotation and proper ergonomics). As Mike Daisey said, somebody just has to give a damn.

  • Chris Mahan
    31 January 2012 - 10:27 am

    don’t ask apple management to do something you won’t do yourself. Stop using their products. Take your loss. Then move on. They have no incentive to stop until they haveno customers. Sell your shares. Mothball the hardware, and bemoan DRM’s effect on your precious music collection. I don’t own apple products, don’t own shares, etc.

  • Pramar
    14 March 2012 - 9:23 pm

    he had wanted to keep Apple mtaufncauring in the U.S. but all the insane government rules, made it so complex and expensive for him to do so and create one problem after another for him. So he was basically pushed to move it abroad to get his products made and on time. Thought that was an interesting perspective.Again, as usual, the root of the problem originates in Washington and the way they shape and enforce insane policies that destroy jobs, destroy companies from being able to hire enough people, etc (Just listen to Peter Schiff Radio, and how he wants to create more jobs because he needs to expand yet can’t because of insane government rules! Instead he has to open offices abroad. And listen to Gibson guitar, how the government is harassing them and forcing them to lay off people.)