Apple called out for omitting factory workers from cash pile

Watchdog group SACOM says Apple isn't using $98 billion cash pile to address poor working conditions in China

By , IDG News Service |  IT Management

A watchdog group issued a renewed call for Apple to address what this group considers poor working conditions for factory workers in China, criticizing the company for not assigning any of its US$98 billion cash pile to address the issues.

The Hong Kong-based Students and Scholars Against Corporate Misbehavior (SACOM) said the factories in China continue to underpay and violate labor rights. In a letter to Apple CEO Tim Cook, SACOM said that Apple's failure to assign cash reserves to address the issues "demonstrates the enormous greed and desire for profit of Apple and its executive[s]."

"Apple announced that it would finally share some of its $100 billion in cash reserves with shareholders. It is regrettable that Apple did not show any intention to share the revenue with its production workers whose labor helped the company become one of the most profitable corporations in the world," SACOM wrote in the letter.

Apple last week said it would use its US$98 billion cash balance toward issuing dividends and repurchasing shares. Apple acquired a substantial cash balance thanks to the success of the iPhone, the iPad and Macs, and Cook said the company expects to continue growing as the mobile markets expand at a fast rate.

SACOM has issued multiple reports over the last few years highlighting the poor working conditions of factory workers making Apple's iPod, iPhone and iPad products. The organization has alleged contract manufacturers like Foxconn underpay workers, while exposing them to health and safety risks. Issues related to the working conditions came under scrutiny again earlier this year following a New York Times story that described poor working conditions at Chinese factories operated by Apple contractors. Non-profit organizations such as Change.org are also running campaigns for Apple to address the issue and make products ethically.

Cook on multiple occasions has defended Apple's record, saying the company takes working conditions in factories that make products seriously, and is taking every step to hold suppliers responsible. Despite the concerns, Apple products continue to find millions of buyers. Apple sold over thee million new iPads in the first weekend after the product went on sale starting March 16.

It's difficult to connect the $98 billion cash reserve to resolve the manufacturing issues in China, said James Post, professor in management markets, public policy and law at Boston University.

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