Trouble at t’mill*.. or, to be more precise, at the Foxconn (Apple sub-contractor) Plant

Reuters reported that 2000 Chinese employees of Foxconn, an iPhone assembly company, fought a pitched battle into the early hours of Monday, forcing the huge electronics plant where they work to be shut down”.

5,000 police were sent in to restore order, which doesn’t say much for the police effectiveness  (2.5 : 1 ratio?) What was apparently a personal dispute escalated into what some claimed was a fight based on the geographic origins of different groups of workers, whilst other reports suggested it followed incidents where security guards had beaten up workers.

Reuters says 40 people were taken to hospital and a number arrested, while the state-run Xinhua news agency reported three people were in a serious condition.

Workers clear up after the violence at the plant (Photo: REUTERS/Stringer)

My colleague at Spend Matters US, Thomas Kase, coincidentally wrote just last week about Chinese working conditions, and he’s written another excellent article about this latest incident. Here’s an extract but you can read the whole piece here and I thoroughly recommend it.

Granted, Foxconn has around 1 million employees in China. And this latest incident occurred at "only" a 79,000-employee plant. But still, riot shields, batons and hospitalized workers in critical condition is not only tragic in itself. It also contributes to the continued stream of negative PR from Apple's supply base, not to mention additional lost production. Perhaps most important and vexing, it sends a strong message about poor morale and weak management skills at Foxconn, which currently plays an inseparable role in Apple's supply chain.

One thing we do know about managing suppliers in China is that when there's smoke, there's fire. As I hinted at in an earlier column on the issue, does anyone think that once these workers go back to building iPhones that there will not be quality fluctuations? Will there be no cogs thrown into the machinery, no intentional mischief? I'd be interested in seeing stats comparing quality from rioting plants vs. those from plants with more amicable worker-management relations. I bet there is a noticeable gap”

It’s all a reminder that while having the buying power and reputation of Apple brings some major advantages in terms of supply chain and procurement, it also leads to real problems that most companies can only dream of. This latest example is a reminder of just how vital, and how challenging, the Apple supply chain really is.

* UK in-joke. "Trouble at t'mill", said with a broad Yorkshire or Lancashire accent,  was supposedly how Victorian melodramas always started, with some workplace disaster or plucky strikers standing up to rapacious mill-owners...

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