Don’t believe the hype

A journalist friend of mine sent me and a mutual reporter friend a Bloomberg Businessweek story on Foxconn, the Chinese company that assembles high-tech consumer goods for world consumption.

She was especially appalled by one part of the article, writing “what’s scary, is this particular paragraph,” and asking our mutual friend, “Did you see all this when you worked and wrote stories in China?”:

The three-decade expansion from television-knob maker to the world’s dominant consumer electronics manufacturer passed with little notice from the Western press. That changed in June 2006 when the London Daily Mail published a story about harsh conditions for 30,000 workers at Foxconn’s iPod factory in Longhua. When two reporters at China Business News did their own version of the story, (Chairman Terry) Gou’s first reaction was to counterattack. Foxconn sued them personally for libel and secured a court order freezing their assets, backing off only at the behest of Apple and HP.

In a past life, I had to deal with legal issues and the press, so I took a closer look at the story. I wasn’t impressed.

The story is a puff piece on founder Terry Gou and his company, disguised as a hard-hitting focus on oppressed and overworked employees (which the story doesn’t back up).

Point by point:

1) The scary paragraph isn’t that scary. The company never screwed with Western journalist. They didn’t go after the London Daily Mail, and in my experience, companies love to go to British courts because U.K. newspapers usually back down and pay off when sued. Foxconn went after the Chinese news organization that followed up on the London story, and it’s safe to say journalist in China, especially natives, are in a more precarious situation than Westerners when it comes to business and government pressure. Think about it: In other developing-world countries, they’re killing journalists for a lot less. Foxconn backed off when Apple and HP said back off. You want an example of a country that goes after Western journalists with a vengeance? Take a look at Singapore.

2) The high play in the story concerning worker suicides is disingenuous.  It says there’s great hand wringing because 11 employees have killed themselves. A minute of research shows the annual suicide rate in China is 13 per 100,000 men and 14.8 per 100,000 women. The company has more than 900,000 employees. If the suicide rate was higher than the national average, it would be worth playing up. But to justify that focus, there will have to be well more than 120 suicides at Foxconn by year end. There was a similar reporting frenzy in Europe this year because of a number of suicides at France Telecom. Turns out the suicide rate there was way below the national average, too. So, wouldn’t it make more sense to look at professions where stressed workers take their lives and exceed the national average than to hype the deaths (that are way below the norm) in these companies?  With that in mind, I especially resent this sentence:

For Western consumers, the lost lives were an invitation to consider the real cost of their electronic playthings.

That’s journalistic posturing, trying to make consumers feel like crap when the story doesn’t back up the guilt trip.

3) The reporters bury their interviews with workers, and there’s no great revelation. In fact, it contradicts the theme they’ve been pushing for more than three-quarters of the story. This part should be much higher:

The Longhua workers interviewed by Bloomberg Businessweek objected to various aspects of how they are treated but not in terms starkly different from the complaints many people have about their jobs. More than two dozen Foxconn employees were interviewed; none showed signs of being afraid to speak freely to a reporter. Those interviewed on the job did so without a supervisor present. Other discussions took place in Internet cafés, staff dormitories, and in the company canteen. Most seem keenly aware of their choices. They work at Foxconn because they want to make money as quickly as possible. Some want cash to buy the things they make. Others want to become entrepreneurs. None of the workers was upset about having to work overtime. To the contrary, the availability of overtime hours was a big attraction.

4) Nothing this company does is going to stop U.S. corporations from outsourcing work to it. Labor costs are cheap (Foxconn was pressured to give factory workers a raise, and that brought the average monthly salary up to $176). The company is efficient. And, from what I can tell, the workers are better educated, more motivated and willing to put in more hours than American workers. You bring these jobs to America and your product costs skyrocket.

5) In general look at who the story is really about: Terry Gou. He praised for building an empire on a $7,500 loan from his mom. He cares about his workers. He hires an American PR firm to improve his company’s public image. He “in the course of a three-hour interview riffed on everything from Warren Buffett (“He’s too old”) to the uselessness of business degrees (“You can’t read a book to learn to swim”) to Steve Jobs (“I forced him to give me his business card”).”

Your typical “captain of industry” profile.

There’s nothing wrong with reading about the rise of corporate China. Just don’t pretend you’re punching hard when you’re using 30-ounce gloves.

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2 thoughts on “Don’t believe the hype

  1. Pingback: This story really should die | Brobrubel's Blog

  2. Pingback: The zombie story that won’t die is shot in the head | Brobrubel's Blog

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