On Thursday, the flood of bad reports continued, with the independent Fair Labor Association releasing the results of its probe of Foxconn, outlining the expected litany of abuses. But for once, this was not bad news for Apple. The company had sanctioned the FLA’s report, and its response was a masterstroke: Apple immediately announced a deal with Foxconn to hire tens of thousands of new workers, tighten safety and overtime rules, and build better employee dormitories. Instead of headlines blaring the Fair Labor Association’s findings, Friday morning brought news stories focused on Apple’s determination to change how it does business with its suppliers—indeed, to set a new standard for China’s entire technology manufacturing sector.
In one deft move, Apple has pivoted from villain to crusading hero. But wait—won’t all those changes cost a lot of money? Yes. And that will benefit Apple even more.
Foxconn is by far the world’s largest electronics manufacturer. It’s best known for building iPhones and iPads, but it’s also a major supplier for Hewlett-Packard, Dell, Amazon, Sony, and many others. Any improvements it makes at Apple’s behest should spill over to its work for those companies as well. And any progress Foxconn demands from its own suppliers—some of which are believed to be even less scrupulous in their labor practices—will compound the effect. Some analysts believe Foxconn is so large and influential that higher wages, tighter regulations, and better working conditions there will ripple across all of China.