The company that runs factories in China producing Apple products including iPhones and iPads has committed to a reduction of weekly work time from 60 to 49 hours per week.
The Fair Labor Association, a US-based labour auditor hired by the technology giant to inspect working conditions at Foxconn facilities, said Taiwanese-owned Foxconn had agreed to the change.
FLA auditors visited three Foxconn complexes in February and March: Guanlan and Longhua near the coastal
The FLA said Foxconn had been recording only accidents that caused work stoppage but was now committing to manufacturing hub of Shenzhen, and Chengdu in the inland province of Sichuan.recording and addressing all accidents that result in injuries.
Foxconn employs a total of 178,000 workers with an average age of 23, and average monthly salaries at the factories ranged from $360 to $455.
Apple’s profits – $13bn in the October-to-December quarter – have made it the world’s most valuable company, worth more than $570bn.
“We fully support their recommendations,” an Apple spokesman said. “We share the FLA’s goal of improving lives and raising the bar for manufacturing companies everywhere.”
Unions have criticised Apple’s use of the FLA, insisting that audits use a “top-down” approach. They say Foxconn’s workers would be better served by being able to organise.
“The report will include new promises by Apple that stand to be just as empty as the ones made over the past five years,” said SumOfUS.org, a coalition of trade unions and consumer groups, ahead of the release of the report.
Cost of production
Foxconn’s factories are the last step in the process of manufacturing iPhones and other Apple devices, most of which have hundreds of components.
Research firm IHS iSuppli estimates that Apple pays $8 for the assembly of a 16-gigabyte iPhone 4S and $188 for its components.
It sells the phone wholesale for about $600 to phone companies, which then subsidise it to be able to sell it for $200 with a two-year service contract.
iSuppli’s figures suggest that if Apple was to absorb a Foxconn wage increase that kept salaries level while cutting average working hours from 60 to 49 per week, it would pay less than $2 extra to have an iPhone made.
Thomas Dinges, an analyst at iSuppli, said Apple’s competitors would probably have to accept the price increase too, since it was framed as a moral issue.
“At this point, it’s politics. It’s not really economics,” he said.
Foxconn told the FLA that it would raise hourly salaries to compensate workers for the reduced hours.
The new 49-hour-per-week limit, which is the legal Chinese maximum, is routinely ignored in factories throughout the country.
Auret van Heerden, the CEO of the FLA, said Foxconn was the first company to commit to following the legal standard.