Human Costs of the Global Supply Chain

According to The New York Times, Foxconn, the Taiwanese company suffering from an unexplained spate of employee suicides, has 420,000 employees at just two manufacturing sites in China.  An eleventh victim took his life just hours after the company apparently announced that it would ask employees to sign a contract promising not to harm themselves or others.

In a sign that American companies grasp the reputational ramifications of events in their extended supply chains, Business Week reports that Apple and Dell are investigating Foxconn’s strategy for dealing with the problem.  This is a crucial step forward and goes significantly beyond the passive monitoring schemes that have been the conventional response.  Certainly, many American companies have switched suppliers found guilty of  ethical lapses, but intervening directly in this manner represents, we would argue, a qualitative shift.  The speedy response is admirable and it will be fascinating to see whether there are collateral effects.  What about the workplace practices of the suppliers to the suppliers and how far down the supply chain do American companies need to be alert?  Will IPhone customers tolerate learning about factory cities of 200,00 in which 22-year olds much like themselves work on assembly lines that move every seven seconds, as one worker quoted by Business Week stated?  We can only hope that other electronics brands for whom Foxconn manufactures smartphones have their statements at the ready.  You know who you are.


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