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Foxconn and Apple will share costs to improve Chinese factories

Apple and Foxconn will share the costs associated with improving labor conditions at factories in China where devices like the iPhone and iPad are built.

Foxconn Chief Executive Terry Gou revealed that Apple will be contributing to the improvements, at least initially, according to Reuters. He did not detail exactly how much Foxconn or Apple would be spending to improve working conditions, or how the costs will be split.

Gou said improving factory conditions provides Foxconn with a "competitive strength." He said executives at Apple feel the same way, which is why the iPhone maker is chipping in.

The comments were made on Thursday at a groundbreaking for a new 10,000-square-meter operational headquarters in Shanghai. The project is scheduled to be completed in 2015.

Foxconn has been facing criticism for years as some have referred to the electronics maker as a "sweatshop" where employees work long hours for little pay. The company has worked to improve its image, and Apple has encouraged those changes with a series of audits, including new independent reviews from the Fair Labor Association.

Tim Cook at Foxconn

Apple CEO Tim Cook touring an iPhone production line at a Foxconn plant in Zhengzhou, China.


In March the FLA announced it had found a number of violations at Foxconn, after auditing its facilities at the request of Apple. Foxconn responded by reducing employee working times and addressing various code violations.

But some workers who relied on extra pay from overtime hours became upset when those hours were reduced. That prompted the company to announce a "significant" wage increase in April in an effort to court and keep employees.

Apple's crackdown on supplier working conditions has had a ripple effect in the China, going beyond Foxconn, which is Apple's largest supplier. Earlier this month, AppleInsider detailed a research note from Topeka Capital Markets that revealed that TTM Technologies recently boosted employee pay in response to Apple's concerns over labor issues.