Reference no: EM132229734

The newspaper published reports of labor abuses that seemingly run rampant in the Chinese factories responsible for producing Apple's most popular products. These in-depth reports catalogued a long list of failures: the presence of child workers, more than 12-hour shifts, regular work weeks of longer than 60 hours, workers housed in tiny dormitories with approximately 20 people limited to three rooms, allegations of suicides, and lax safety standards that have led to fatal explosions.

When Apple says it needs 1 million products, say, then its supplier is going to do whatever it takes to get those products ready in time. The code of conduct might ask that factory workers be limited to 60-hour work weeks, but in truth, Apple is asking the factories to keep running all day, every day, to make the order. To keep its costs low, Apple also offers very slim profit margins to suppliers. In turn, these factories aim to reduce their own costs. Another Apple supplier thus began using a toxic chemical, instead of rubbing alcohol, to polish the screens of iPhones, because the chemical dries faster. But it exposes workers to the threat of paralysis and nerve damage.The primary reason for these labor abuses may come only at the end of the supply chain—the consumer. A survey of Apple consumers showed that only 2 percent of them recognized labor issues as a concern. In a remarkably succinct summary of the challenge, another anonymous Apple executive asserted, “You can either manufacture in comfortable, worker-friendly factories, or you can reinvent the product every year, and make it better and faster and cheaper, which requires factories that seem harsh by American standards. And right now, customers care more about a new iPhone than working conditions in China.”

What do you think that this publicity will do to Apple's sales and image?