Apple Inc suspended new business with iPhone assembler Pegatron Corp (和碩) after discovering labor violations at a student workers’ program, taking strong action to clean up a Chinese-based production chain long accused of worker abuse.
The Cupertino, California-based technology giant said that it discovered several weeks ago that the Taiwanese manufacturer misclassified student workers in China and allowed some to work nights and overtime in violation of Apple’s Supplier Code of Conduct.
Employees then “went to extraordinary lengths” to cover up the violations.
Photo: David Chang, EPA-EFE
It has since placed its partner on probation until corrective action is completed, the US company said in a statement.
Pegatron is one of just a handful of partners Apple relies on globally to assemble marquee products such as the iPhone.
Like larger rival Foxconn Technology Group (富士康科技集團) — known as Hon Hai Precision Industry Co (鴻海精密) in Taiwan — the company is an integral part of Apple’s global supply chain, which has been the target of criticism by labor activists over the years.
The world’s most valuable company is in the middle of producing four new iPhone models with 5G, and has been working with Pegatron to expand iPhone assembly outside of China.
Those efforts are unlikely to be impacted by this suspension, which was first reported by local outlet The Paper, as it only covers new business.
However, Apple’s move hands an opening to rival Luxshare Precision Industry Co (立訊精密), which is on the verge of becoming the first Chinese firm to assemble the iPhone.
Pegatron’s shares gave up gains and closed down 2.1 percent in Taipei yesterday.
“Pegatron’s current iPhone business should not be affected. However, it is likely that Pegatron will lose some orders for Apple’s new handsets next year to Luxshare, which is poised to become a new iPhone assembler in 2021,” GF Securities (Hong Kong) Brokerage Ltd (廣發證券香港) analyst Jeff Pu (蒲得宇) said.
Apple spent years upbraiding manufacturers after a rash of suicides in 2010 at Foxconn provoked outrage over the harsh working environments in which its upscale gadgets were made.
Soon after, Apple developed standards and started audits of the hundreds of companies that produce components for its devices, threatening to pull business from those who defy labor laws.
However, the sheer scale of the chain makes policing difficult. Foxconn and Catcher Technology Co (可成科技) were among those called out in the past for flouting local regulations.
Apple said that it did not find evidence of forced or underage labor in Pegatron’s case, but discovered the supplier falsified paperwork to hide violations.
Pegatron has fired the manager who oversaw the student worker program, it added.
“Pegatron misclassified the student workers in their program and falsified paperwork to disguise violations of our code, including allowing students to work nights and/or overtime and in some cases to perform work unrelated to their major,” Apple said in its statement. “The individuals at Pegatron responsible for the violations went to extraordinary lengths to evade our oversight mechanisms.”
Pegatron said the violations took place at its Shanghai and Kunshan campuses and that students working night shifts, overtime, and in positions unrelated to their majors were “not in compliance with local rules and regulations.”
The company said it has taken “quick action” to strengthen its procedures, and would add adherence to the code of conduct to metrics used to evaluate senior management.
“Upon discovery of this non-compliant activity, we immediately took the student workers off production lines and worked with our customer and third-party experts to make appropriate arrangements for them to return to their homes or schools with proper compensation alongside all necessary support and care,” Pegatron said in a statement.
Cairo’s new monorail slices across the city skyline, running above the familiar chaos of blaring horns and aging buses’ exhaust fumes that mark rush hour below. The US$4.5 billion monorail, opened this month, is among Egypt’s most prominent new transport projects, part of a debt-funded infrastructure drive criticized for sapping state finances while bringing limited benefits to most of the country’s 109 million people. “It feels like you’re in a different country,” said Ramy Sayed, a restaurant manager, aboard a driverless Innovia 300 train. “No noise, no traffic, we’re not used to this.” The eastern line runs 56km from the bustling middle-class
Starlux Airlines Co (星宇航空) today unveiled a long-haul network expansion plan at a shareholders’ meeting in Taipei, including direct flights to Barcelona, Spain, and Zurich, Switzerland, as well as a service connecting Taipei, Sydney and New Zealand. Starlux is to become the first Taiwanese carrier to offer non-stop services to the two European cities, while the inaugural oceanic route is expected to expand transit opportunities within the Australia-New Zealand market, Starlux said. Flight services to Chicago, Dallas, Washington and New York are under evaluation, the airline added. Prior to the shareholders’ meeting, the airline earlier this year announced that it would be
Taiwanese prosecutors suspect that three people successfully smuggled at least one shipment of Nvidia Corp artificial intelligence (AI) chips to China after first exporting them to Japan, people familiar with the matter said. The trio was detained last week by the Keelung District Prosecutors’ Office for allegedly falsifying documents related to exports of Super Micro Computer Inc servers containing advanced Nvidia chips, which the US has barred from sale to China without a license from Washington. The move marked Taiwan’s first public crackdown on AI chip diversion after years of pressure from the US to take a more active role in curtailing
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) employee bonuses are likely to grow more than 30 percent this year, in line with the past few years as the company’s profits continue to set new records, an anonymous source cited TSMC chairman C.C. Wei (魏哲家) as saying yesterday. TSMC, the world’s largest contract chipmaker, is committed to taking care of its workers, the source said, citing Wei’s meeting with employees yesterday morning. Wei also expressed gratitude to employees for their contribution to the company’s improving bottom line, the source added. Since 2023, TSMC’s employee bonuses have grown at an annual rate of
RSS