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iPod maker cuts damage suit demand to 1 yuan

A maker of Apple Computer's iconic iPod said yesterday it has cut its demand for defamation damages over a report it mistreated its workers to a symbolic 1 yuan (US$0.12) following a wave of bad publicity.

Hongfujin Precision Industry Co (鴻富錦精密工業) said it was reducing its demands for damages from a pair of Chinese journalists from 30 million yuan (US$3.8 million) "to avoid blurring the issue because of the great public attention on the target of the injunction."

The company also said it was withdrawing its request that the court handling the case freeze the journalists' personal assets.

The dispute highlights challenges big companies face in living up to their codes of conduct while outsourcing most of their production. It also reflects the pressures Chinese journalists confront in doing their jobs.

The case provoked an open letter from journalists' advocacy group Reporters Without Borders demanding that Apple's chief executive, Steve Jobs, intervene.

It also sparked a flurry of Internet and media comment.

"The public's right to know is in danger when sprawling corporate power, aided by distorted legal procedures, attempt to stifle freedom of the press," the state-run newspaper Shanghai Daily said in a commentary yesterday.

Apple said on Wednesday it was working behind the scenes to help resolve the dispute.

A wholly owned subsidiary of Taiwan's Foxconn Technology Holdings (鴻準精密), Hongfujin issued a statement saying that any compensation it receives in the case would be donated to charity.

"Of this entire episode, what the company had asked for is simply the right to protect her reputation, to preserve the Chinese dignity," it said. "Any claim to us is more for its symbolic meaning than anything [else]," it said.

Hongfujin, reportedly China's biggest export manufacturer last year with overseas sales totaling US$14.5 billion, filed the suit in Shenzhen, where its factory is located. It named two journalists at the state-run China Business News, which ran stories alleging that some workers on iPod assembly lines worked 15-hour days under harsh conditions for low pay.
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