Supply chains are a huge and rising reputation risk

Reading a major, left-leaning British newspaper on Saturday I was struck by two separate stories featuring what is now the world’s largest technology corporation, Apple. The first was a light, positive piece about the frenzied events at the company’s flagship London store on the first day that Ipads went on sale. Apple marketing folk must have been delighted by the scale and tone of the article. The second story was altogether different, and must have tainted the pleasure prompted by the first. It was about a spate of suicides by unhappy workers at a Chinese factory owned by Foxconn, a major supplier to Apple.

Once Foxconn realised the Western media had taken an interest, it announced that wages were to be increased by 20%, subsequently raising this to 30%. Today Steve Jobs of Apple, sensing a potential reputation risk drama brewing, felt compelled to go on the defensive. He was reported by the BBC as saying:

“You go in this place and it’s a factory but, my gosh, they’ve got restaurants and movie theatres and hospitals and swimming pools. For a factory, it’s pretty nice.”

He may have been quoted selectively, but I couldn’t help thinking that he seemed to be saying that the suicidal workers should have been more grateful for such a working environment. You can imagine the careful orchestration of the Chinese owners to present Jobs with a ‘shiny, happy people-style’ image for his visit.

Next time, he should arrive unannounced and insist on unrestricted access without a chaperone. He might then see why Chinese migrants prefer to make the ultimate protest than continue working in Apple’s supply chain. The people in London who grappled one another to get their hands on an Ipad might do well to reconsider their preferred choice of gadget brand as well.

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