Apple and Foxconn improve conditions at China plants

Updated 23 August 2012
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Apple and Foxconn improve conditions at China plants

Apple and Foxconn improve conditions at China plants

TAIPEI: Apple Inc. and Foxconn have improved working conditions at Chinese factories that make most of the world’s iPads and iPhones, according to auditors the firms enlisted to monitor the process, but tough tasks lie ahead.
The Fair Labor Association said local laws require the companies — which came under fire over conditions at the plants blamed for a series of suicides in 2010 — to reduce hours by almost a third by 2013 for the hundreds of thousands working in Foxconn plants across southern China.
Foxconn said yesterday it would continue to cut overtime to less than nine hours a week from the current 20, even though that could raise labor costs while also making it difficult to attract workers.
“It is a challenge. When we reduce overtime it means we need to hire more people and implement more automation, more investment on robotic engineering. More workers also mean more dormitories and recreational facilities; it takes time,” said Louis Woo, special assistant to the CEO of Foxconn.
“But I expect more loyalty from workers as a result, and then we can save more costs on recruitment and retainment,” he told Reuters in an interview.
“Yield rates will also improve. Efficiency in terms of productivity, yield gain, retention and lower turnover rates should be able to improve next year.”
Earlier this year, the FLA — of which Apple is a member — found multiple violations of labor law, including extreme hours, after launching one of the largest investigations ever conducted of an American company’s operations outside the US.
Apple, the world’s most valuable company, and Foxconn — the trading name of Taiwan’s Hon Hai Precision Industry whose clients also include Dell Inc, Sony Corp. and Hewlett-Packard Co. — agreed to slash overtime, improve safety, hire new workers and upgrade dormitories.
Woo said Foxconn not only wants to do “the right thing” for its one million employees, it also wants to serve as a model for other companies.
In a report tracking the progress of those commitments, the FLA said it had verified that agreed-upon changes had been instituted and that Apple was trying to hold its partner, the world’s largest contract manufacturer, accountable.
Auret van Heerden, president and CEO of the FLA, said Foxconn faces a challenge from workers’ expectations.
“A lot of workers have clearly come to Shenzhen to make as much money as they can in as short a period as they can, and overtime hours are very important in that calculation,” he said.
“We are picking up concerns now on the microblogs about what’s likely to happen as hours gets changed, and whether their incomes will be shaved as well.”
Many people would leave Foxconn if there is no overtime, according to a post by “Shenzhen Mars” on China’s Twitter-like Weibo.com message system.
Foxconn’s Woo said the company has been constantly telling workers about the importance of the quality of life and health.
“This is the thing we need to continue to communicate with workers, especially young migrant workers, that anyone who works more than a certain number of hours will feel tired and not well. If we can improve the work environment and benefits, they can enjoy their life better.”
At Foxconn’s massive factory in Shenzhen’s Longhua district, six workers interviewed by Reuters said overtime hours had been cut to between 48 to 60 hours per month, down from some 80 before.
Some said more workers were quitting Foxconn to seek better paid work elsewhere, with red posters plastered on walls everywhere calling for large-scale recruitment of replacements. Staff were getting text messages offering bonuses for referring friends or relatives to the factory.
“A lot of my friends have resigned,” said a production line worker surnamed Li. .”..From just my home town alone, there have been at least ten people who have left. On a basic level, most workers were able to withstand (the pressures) of the previous overtime system.”
But not everyone was unhappy.
“There’s been an improvement in the past six months... It’s a bit more comfortable with shorter work days,” said spiky-haired worker Liu Xiaoguan. But his take-home pay has dropped from around 3,700 yuan ($583) per month to 3,000 yuan.
“I hardly save anything,” he said with a laugh. “I like spending too much.”
Global protests against Apple swelled after reports spread in 2010 about the suicides at Foxconn plants, blamed on harsh working conditions and alienation felt by migrant laborers, often from impoverished provinces, in a bustling metropolis like Shenzhen, which is home to two of the three factories the FLA inspected.
Apple has tried to counter criticism that its profits are built on the backs of mistreated Chinese workers. The FLA’s progress report comes a day after Apple’s market value climbed past $623 billion, surpassing the record set by Microsoft Corp. during the heyday of technology stocks in 1999.
The latest report card on Apple-Foxconn comes after first findings and a timeline for improvements were announced in March, though some industry observers said the original agreement was not entirely independent because of close ties between the FLA and corporate members.
Since that March audit, rights groups including China Labor Watch have conducted their own studies.
The group said in a statement on Wednesday that Foxconn workers were still unhappy and urged other Apple suppliers to be scrutinized as well.
“Workers have to complete the workload of 66 hours before within 60 hours now per week. As a result, the workers get lower wages but have to work much harder and they are not satisfied with the current situation,” it said.
Apart from health and safety enhancements, Foxconn is offering up a few enhancements to employee morale. For instance, Van Heerden said it is increasingly giving workers a choice of accommodation, such as by providing an allowance for housing and food if the workers choose to live off-site.
Foreign companies have long grappled with working conditions in China, dubbed the world’s factory because of its low wages and efficient coastal transport and shipping infrastructure. In the 1990s, investigations targeted shoe and apparel maker Nike Inc, which eventually agreed to institute changes.


Russian big gun rolls out latest hardware for Gulf customers

Updated 18 February 2019
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Russian big gun rolls out latest hardware for Gulf customers

LONDON: As the region’s biggest military exhibition gets underway in Abu Dhabi, Sergey Chemezov, CEO of Russian defense conglomerate Rostec, spoke exclusively to Arab News about the company’s regional ambitions.
What is the expected value of your exports this year? 
The order portfolio of Rosoboronexport, Rostec’s subsidiary, currently exceeds $50 billion. Russia is the second-largest arms supplier in the world.
In 2018, arms and military machinery were supplied to over 40 countries worldwide. In addition, we signed more than 1,100 contractual documents to an amount of over $20 billion, which is nearly one-quarter more than in 2017. 
The Middle East and North Africa accounted for almost half of Rosoboronexport’s supplies of military products, more than 40 percent. Only two years before, that share had been significantly smaller, about 20 percent. That trend says it all; military and technical cooperation with the countries of that region have been strengthening. The Middle East is currently the leading region in the world by the volume of arms purchased, accounting for nearly one-third of the total market. Middle Eastern states (Saudi Arabia, Israel, Egypt, the UAE and Qatar) make half of the list of 10 major importers of military products, and Saudi Arabia remains the top importer. 
Which country will most likely become your largest client in the Middle East in 2019? Which systems is Rostec planning to sell in the region this year?
We’re implementing a range of projects in the UAE, both in civil and military areas. Russia is also interested in developing military and technical cooperation with all countries of the region. In recent years, we’ve resumed close contacts with a whole range of states, including Iraq.
I’d like to particularly focus on the Yak-130 combat trainer aircraft. The countries of the region are showing a continuously increasing interest in combat trainers. The Yak-300 has all the necessary characteristics required for aircraft of that type, and I firmly believe that it has great potential for supplies to the countries of the region.
What are the potential consequences of the suspension of the New START Treaty with the US? Is it affecting Rostec’s production plans? 
As a person who cares about what’s happening in the world, I can say that I’m worried by the position of the US. It is leading to a new arms race and aggravating international tension. The Russian Army is well equipped, and is capable of efficiently responding to attacks. Our corporation has done its best for this purpose. Yet there will be no winners in a third world war if it happens. 
Is there up-to-date information on supplies of S-400 systems to Turkey?
The contract for the S-400 was signed in 2017. We’ve agreed to reduce the terms already twice, and in autumn 2019 the obligations will be fulfilled. Of course, Turkey does have ambitions to develop its national defense industry, and in this regard, it has already achieved significant progress in a range of areas. Therefore, our partners are interested in such topics as joint development of machinery, including such advanced equipment as air defense systems.
As to joint production, the contract for the S-400 provides for an option. This is about cooperation in technology. We’re ready to agree to localization of manufacture of certain elements of that system. I’ve said it earlier and will repeat it again: The S-400 is a defense system, not an offensive one. We can sell it to the Americans if they want it. Thus, strategically there are no problems in this regard. And I can see no problems for Russia in terms of security.
Is Rostec discussing any potential sales with Saudi Arabia, and if yes, in which area?
The military sector prefers silence, therefore I wouldn’t go into detail. I’d only say that we’re actively working in a range of areas. We can confirm information about signing a number of contracts with Saudi Arabia, as well as about both parties’ readiness to fulfill them, including on the S-400. Talking of the civil area, Rostec possesses a whole range of innovative technologies that can be demanded within implementation of the ambitious NEOM city project. These are water treatment systems, electronic services, various solutions in the area of composite materials, glazing with special features, as well as advanced technologies and innovations for manufacturing biodegradable polymers and products based on natural renewable raw materials. 
Do you have up-to-date information on progress in the privatization of Rostec’s holdings?
The sale of shares isn’t an end in itself for Rostec, but rather a tool for developing its assets in compliance with the corporation’s development strategy until 2025. We’re interested not only in attracting additional investments, but also in gaining new competences, technologies and markets. Private-public partnerships help our enterprises, and holdings become more efficient and take new positions quicker. 
What are your expectations of the corporation’s profit for the year?
We’re finishing assessment of the results, and will officially announce them in the near future. Now I can say that the company continues to show good financial results, and we expect an increase in both revenue and net profit compared to 2017.
Do you expect that long-standing low oil prices will affect regional sales this year?
The example of Russia shows that oil prices do not determine everything. Even when they are low, the economy can develop. 
We sense that the countries of the region have already adapted to the new price realities that dramatically appeared in 2014. At the same time, interest in our products, both military and civilian, in the region is growing from year to year.
What products will Rostec holding companies present at IDEX 2019?
The IDEX exhibition is one of the world’s largest venues where Russia demonstrates its latest developments in the field of weapons and military equipment. This is an opportunity for us to negotiate and discuss cooperation with our traditional partners, primarily from the Middle East, which is of particular interest to Russian industry. After all, the Middle East and North Africa account for almost half of the sales of Russian military products abroad. The joint exposition of Russian enterprises at IDEX, which occupies more than 1,100 square meters of exhibition area, will feature about 1,000 samples of military products.
In particular, the unparalleled Pantsir-ME, an air defense missile and artillery system, will make its international debut at the exhibition, presented by the High-Precision Complexes Holding. The system is able to protect ships from all types of aerial kill assets.
A large-caliber automatic assault rifle complex, the SHAK-12, designed for close combat, will also be shown there. Units of Russian special services are armed with these complexes.
Kalashnikov Concern will showcase a wide range of small arms and hunting weapons. The AK-15 and 200 series Kalashnikov certified for export will be shown abroad for the first time. The 200 series assault rifles will be one of the key Russian novelties at IDEX 2019. 
Tecmash Concern will exhibit a number of its latest ammunition products. These include a 122-mm unmanned rocket missile with a detachable blast fragmentation warhead for the Tornado-G multiple-launching rocket system. This ammunition has much greater kill effectiveness than issued shells of the Grad system. At the same stand, visitors will for the first time see a unique video showing how the Tornado-G works. In addition, at the show the world community will for the first time see Tecmash’s AZ-TSR-47, an increased-efficiency jet-stabilized projectile designed to protect surface ships from weapons equipped with radar guidance systems.
TSNIITOCHMASH will present at IDEX its already well-known second-generation Ratnik combat equipment, which is exactly what is now supplied to the Russian Army. Ratnik in the color of sand, presented at IDEX, has been successfully tested in Syria. Its components include a body armor backed with a special armor panel. This panel can withstand 10 hits of SVD sniper rifle armor-piercing incendiary bullets, fired from a distance of 10 meters, and the plate is not deformed on the back, providing protection against contusion damage. The Russian bulletproof vest also wins in terms of weight: It is 2.5-3 kg less compared to the US general military bulletproof vest.
Each exhibition held in the Middle East demonstrates that the corporation has immense potential to cooperate with the countries of the region.