New Suicides at Foxconn Put Apple in a Pickle
Two employees of Taiwanese manufacturer Hon Hai Precision Industry Co. have fallen to their deaths since April, the company disclosed today.
Hon Hai is a large manufacturer of iPhones that has come under scrutiny for its labor practices in recent years. The deaths are a reminder of human rights struggles the manufacturer has faced after the suicides of at least 13 employees in 2010. The company, which uses the trade name Foxconn Technology Group, has instituted reforms since those deaths, but the tight relationship between Foxconn and Apple (NASDAQ:AAPL) has been unraveling.
While the company has opened itself up to audits by the Fair Labor Association and made reforms such as limiting overtime and improving safety, costs have increased and Hon Hai has faced competition with another Taiwanese firm, Pegatron, which has won contracts from Apple to build the iPhone 4S and the iPad mini. It is certain Apple has not been happy about the scrutiny it has come under since the 2010 Hon Hai suicides, but the deal with Pegatron could have more to do with saving money than human rights concerns. Hon Hai tried to pass on to Apple some of the expenses it faced after raising wages and implementing suicide-prevention measures, but Apple refused to take on the costs.
There have been conflicting reports about the number of deaths and whether or not they were suicides. Hon Hai gave an email statement to the Wall Street Journal claiming that the two deaths were accidents, occurred outside company property, and were not work-related, but Market Watch claims that there were actually three employee suicides in recent months.
Facing employee protests and observation from human rights groups, electronics manufacturers throughout China have been forced to raise wages and improve working conditions in recent years, which has caused some companies, including Hon Hai, to move operations to Vietnam and Mexico, where transportation and labor costs are lower. Apple has promised to open at least one U.S. manufacturing plant in 2013, and it was believed that Hon Hai, which has plants in Texas and California, would get the job, but now that is uncertain.
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