When Apple Suppliers Fight the Media — Literally

Earlier this week, I shared how Apple is serious about supply chain security -- and some of the ends to which it goes to keep suppliers in the dark. It turns out this behavior has led some suppliers to a new degree of paranoia, which recently resulted in a reporter getting beaten up by Foxconn employees (or contractors). The post reports that a reporter was "tipped by a worker outside the Longhua complex that a nearby Foxconn plant was manufacturing parts for Apple too." After getting to the plant, the reporter "stood on the public road taking photos of the front gate and security checkpoint..." A guard then intercepted the reporter's taxi and the guards and a mob of Foxconn workers proceeded to attempt to drag him into the factory. Once the reporter was able to free himself from the melee, he was told in no uncertain terms by the police that Foxconn had a "special" status in the region, the implication being that it could do as it pleased regarding security.

I find it ironic that when it comes to supply chain risk, we remain so concerned about areas such as child labor and working conditions within company supply bases, that violations of rules governing either (with or without the buying company's knowledge) can be absolutely disastrous from PR and revenue perspectives. Yet we don't think about suppliers trampling the rights of reporters on public roads and carrying out physical assaults to intimidate them. Neither do we think about this kind of risk when local police are complicit in the act.

It's clear to me that the secrecy with which Foxconn operates is a direct result of a culture of fear with which Apple manages its supply chain. In Spend Matters' view, we should hold Apple accountable for its supplier's behavior in this case, just as we hold accountable companies that choose to ignore -- or not discover -- other types of labor infractions within their supply chain. So next time your iPhone decides to drop a 3G call on you -- which happens to me at least once for every 15 minutes I talk, if not more frequently -- it might be worth thinking about the kind of culture you're supporting every time AT&T kicks back a share of your phone bill to Apple.

Jason Busch

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