A Long and Winding Post

It was the best of times, it was the worst of times. --Charles Dickens

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Oh let us love our occupations / Bless the squire and his relations,

Live upon our daily rations / And always know our proper stations.

---Charles Dickens

Prelude

Yesterday morning, bright and early, the Roto-Rooter guy arrived to unclog my toilets. I opened the door and remembered, in that grateful moment, how much the service sector matters in this country. We need manufacturing and service, working in tandem. People here making the products; people here repairing those products when they sputter and stop. Or clog and threaten to overflow, as the case may be.

The smiling plumber wore a pressed pale blue shirt tucked into navy blue pants and a navy blue cap emblazoned with the Roto-Rooter logo. "Morning, Ma'am. I'm Cory. Sorry to hear things in your home are backed up." Yes, Cory. Backed up, indeed.

Roto-Rooter Cory, nice as he was, couldn't have known that what really had me concerned was a different kind of sewage: The mess created when American companies set up manufacturing Anywhere But Here. I left Cory to do his dirty work and I went about my own none-too-tidy chore, slogging through Apple, Inc's 25-page "Supplier Responsibility: 2011 Progress Report." Wish I'd worn gloves.

A Long and Winding Post

The "Supplier Responsibility" title is, in my opinion, a genius public relations decision. It says: Hey, don't blame Apple. We can't help what those crazy suppliers do. Key phrases that pop up throughout the report are equally genius: Why use the word "slave" when "debt-bonded labor" or "involuntary labor" will do? Apple discovered these so-called "debt-bonded" laborers in numerous facilities in Taiwan, Singapore, and Malaysia. Apple-contracted suppliers hired these workers away from their home countries and required them to pay "recruitment fees" for the privilege. The fees equaled many months' wages. Sounds like slave labor to me.

And while Apple audited 100 percent of its production suppliers in Taiwan for "debt-bonded labor" violations, the company admits it audited "many" in Malaysia and Singapore. Many? Not all? How many weren't audited? What about them? Apple would rather we appreciate the 100 percent Taiwan audit and ignore the rest. After all, says Apple, debt-bonded laborers "have been reimbursed $3.4 million in recruitment fee overcharges since 2008." Read that statement carefully and realize a) Apple itself didn't pay the fees, but pressured its sleazy production suppliers to do so and b) Apple takes a self-congratulatory tone even though c) the workers were simply reimbursed, not compensated for essentially doing slave labor and d) Apple still doesn't address the facilities that haven't been audited at all; facilites where e) "debt-bonded laborers" still likely work / slave away.

No one, including Apple, can possibly know the extent of the worker abuse. All this running back and forth from Cupertino to Taiwan, Malaysia, Singapore and wherever to conduct "audits" to see if workers are in fact slaves; all these meetings with contemptible suppliers hell bent on creating and keeping slave-labor. Wouldn't it be simpler for Apple to hire American workers here at home? Sigh. (I fear the answer is "no," but that's for another post.)

Undaunted, Apple presses on in its "Progess Report." Touting its "Supplier Code of Conduct," it states: "While similar to the Electronics Industry Citizenship Coalition (EICC) Code of Conduct, Apple's Code is more stringent in…requiring collective bargaining practices and prohibiting any form of involuntary labor." The "Code" sounds like a nice way massage Apple's less-than-carefree conscience. As if to say: Hey, we're trying here. We're trying to teach suppliers not to use slave labor. We're trying to tell the workers not to allow themselves to be abused. Can we help it if these people don't get it?

I doubt you'll find the "Supplier Progress Report" displayed in any of Apple's 300 worldwide retail stores. But it should be. Despite Apple's best efforts to sound noble, a darker, Dickensian story simmers just below the surface. In China alone, where Apple audited 127 facilities, "ten factories had hired workers under the age of 16 years." Apple verified at least 91 cases of underage labor violations. Factory owners / suppliers--whether in China, Taiwan, Malaysia or Singapore--must wield frightful intimidation over their workers, especially those who are, let's face it, children. And come on, you just know there are way more than 91 cases. The solution? Just. Stop. Manufacturing. Away. From. Home.

And, by the way, does anyone else wonder exactly how many foreign suppliers / factories Apple uses? The report states "over the past several years, Apple has audited 288 facilities for compliance with our Code." How can Apple keep reliable, bribery-free tabs on several hundred suppliers? I doubt these suppliers--who charge "recruitment" fees, violate safety precautions, push workers to produce more in less time, and hire underage workers--bow and scrape to the Mighty Apple Code. Please.

To participate in the Supplier Responsibility audit in China, Apple's Acting Chief Tim Cook visited Foxconn in Shenzhen, where iPads are manufactured. As I've discussed in an earlier post ("Jobs, Chinese and Otherwise"), in 2010 at least a dozen (the reports I read say 13) Foxconn workers committed suicide, some leaping out of factory-managed dormitory windows. Surely suppliers (and their ever-intimated workers) put on a nice dog-and-pony show for Mr. Cook. The report, sounding cold, analytical and detached, explains that Apple "commissioned an independent review by a broader team of suicide prevention experts." This team surveyed "more than 1,000 workers about their quality of life, stress, psychological health, and other work-related factors." It also "commended Foxconn for taking quick action." The actions: Foxconn hired counselors, established a 24-hour "care center," and attached "large nets to the factory windows to prevent impulsive suicides." Gee, thanks, Foxconn. Thanks, independent suicide prevention experts.

According to a couple of CEOs I've spoken with, Chinese factory workers earn between 50 and 82 cents an hour. It's curious / suspect that Apple's suicide prevention experts didn't blame low pay for worker despondency. Yes, the cost of living is much lower in China, but please. Imagine working a 60-hour week, Apple's stated weekly maximum. You could end up with as little as $30. Oh, and then hand it over to the factory owner who undoubtedly runs the nearby concession stands. No wonder Apple repeatedly found workers putting in too many hours despite its "Code." Bad, bad workers.

Meanwhile, on January 18, 2011, Apple, Inc. reported a record-breaking 78 percent increase in profits compared to the same period last year, with profits of $6 billion on revenues of $26.74 billion. I'll let that statement stand alone. Just take it in.

If we are all as "connected" as we like to think, then how can we disconnect from the workers who make our Macs, iPhones, iPads, iPods, as well as parts and components such as LCDs, hard drives, and printed circuit boards? How can we pretend our electronic gadgetry simply drops from the sky into our nearest sleek and spotless Apple retail store? Sigh. We can't.

I'm not out to bash Apple, Inc. or for that matter all the other American companies doing business in other countries. I just want to hold their feet to the fire. Not literally. Please don't take out matches or anything. In this case, I simply want to ask Apple: Why not invest in America? Why not build factories and train people here? How many Americans could you have potentially employed last year alone? It's a mind-boggling loss to our economy. Ok, so that last sentence was not a question but a lament. A whine, if you will.

Aristotle had it right when he said: "Well begun is half done." Creating brilliant software and equally brilliant products to deliver said software only represents half the project. The other half is creating, building, overseeing factories right here at home where those products can be manufactured in a safe, humane manner. In Apple's (and any American corporation's) rush to get cutting-edge, competitive products to the marketplace, has it lost its way? In our rush to snatch Apple's products up, slave labor be damned, have we lost our way, too?

Forget Apple. Let's Talk about My Dad, Einstein, and Samuel Blanc

Just before he left, Roto-Rooter Cory wadded up toilet paper, threw some in each of the three previously-clogged bowls, and flushed. He didn't sing Away go troubles down the drain, but he would've if I'd asked. "Everything's working fine now, ma'am. But just in case they back up again, you have a six-month guarantee."

Not bad. Reading up on Roto-Rooter (now owned by Cincinnati-based Chemed Corporation) confirmed I'd chosen what sounds like an admirable company. In 1933, Samuel Blanc created "a funny-looking sewer cleaning machine from a 1/6 HP Maytag washing machine motor, roller skate wheels and 3/8-inch cable to turn the blades." Ingenious, like something my Dad would've come up with. Samuel Blanc, Albert Einstein, Dad. All three just wanted to dream up ideas and see those ideas turned into reality. To me, that's what manufacturing is all about. That's why we need to re-energize it right here at home. We all long to be connected: to each other, to the clothing we wear and products we use. Manufacturing here secures those connections.

If Apple would lead the way on this, take the first step by opening even one facility where an iPad could be manufactured start to finish in America, would we as consumers be willing to pay more? How much more would it cost? I was asked that a couple of weeks ago in my radio interview with Armstrong & Getty. It's a critical question. I'm still trying to get the answer. I won't give up.