What Hath Apple Wrought?

I just had a morbid thought: I wondered how many Chinese workers committed suicide in the making of my iPhone.

This is not the kind of thing I would normally dwell on, but after listening to the podcast of last weekend's "This American Life" episode, I can't stop thinking about it. That program featured the first part of Mike Daisey's monologue "The Agony and the Ecstasy of Steve Jobs."

Daisey is a self-professed techno geek, a lover of everything Apple (NAS: AAPL) , one who has knelt, as he says, before Steve Jobs' throne. But Daisey began questioning his near-religious Apple fervor after seeing photos (test images taken with a just-assembled iPhone) of Chinese workers on an iPhone production line. The picture he had in his mind of his techno toys being assembled by a bunch of robots was replaced pictures of real people, frantically hand assembling thousands of devices every day, barely keeping up with the world's growing appetite for technical gadgetry.

So Daisey did what very few people would do. He travelled to Shenzhen, the third largest city in China, and an area designated a special economic zone by the Chinese government. Shenzhen is, Daisey tells us, the place where much of our electronic "crap" comes from. It doesn't just pop out of an abstract place called "China"; it is made by hand, by actual people.

After trying without success to get access to Shenzhen's factories through the normal channels of inquiry, Daisey ends up, unauthorized, outside the gates of a Foxconn factory on the outskirts of Shenzhen. Foxconn is the largest exporter in greater China. It employs more than 400,000 people in its Shenzhen plant alone, where it assembles products for Apple, Dell (NAS: DELL) , and Hewlett-Packard (NYS: HPQ) , among others.

Those aren't butterfly nets
As Daisey approaches the factory, he can't help but note the anti-suicide nets on the edges of each building's roof. Those nets are the company's response to a rash of suicides around the time of his visit -- 18 jumped at Foxconn factories in 2010, with 14 deaths.

In response, Apple issued a statement saying, "We are saddened and upset by the recent suicides at Foxconn. We're in direct contact with Foxconn senior management and we believe they are taking this matter very seriously."

Dell's statement: "We expect our suppliers to employ the same high standards we do in our own facilities." And HP said that it was looking into "the Foxconn practices that may be associated with these tragic events."

Meanwhile ...
Daisey spent hours outside the factory talking to a long line of Chinese workers while under the suspicious eyes of Foxconn guards. He listened to a gush of stories from workers telling him what it's like working for Foxconn. He talked to underage workers, some 14, 13, even 12 years old. Daisey wonders how a company like Apple, one so concerned with every detail of its products, somehow didn't seem aware of this.

Later in his journey, Daisey infiltrates a number of different companies' factories and is struck by the deep silence inside the assembly areas. It is a place without noisy machinery, just thousands of workers assembling each piece by hand, all of the workers silent. Labor is cheaper than machinery in China. At Foxconn, Daisey says, workers who speak on the line receive demerits.

He is told it is not uncommon, under peak demands created by the release of some hot new device, for workers to have month after month of 16-hour days. He learns that while he has been in China, a worker died after working a 34-hour shift, an event that was not unprecedented.

He talks to workers, members of illegal unions, who were made to work with n-hexane, a solvent used to clean iPhone screens. Those workers' hands now shake uncontrollably from constant exposure to that toxic chemical. Others have sustained such repetitive motion injuries their joints have been essentially destroyed.

Threatened mass suicide
Earlier this month, at a Foxconn factory in Wuhan, China, a group of workers, reported to number between 80 and 200, climbed to the roof of a six-story dormitory and threatened to jump. The reasons for this threat were reported to center around the company's attempt to transfer some employees from assembling Microsoft (NAS: MSFT) Xbox gaming consoles to other jobs.

A protesting worker who wanted to remain anonymous, told The Telegraph that the new "assembly line ran very fast and after just one morning we all had blisters and the skin on our hand was black. The factory was also really choked with dust and no one could bear it."

Microsoft issued this statement: "Microsoft takes working conditions in the factories that manufacture its products very seriously, and we are currently investigating the issue."

On the other hand
This is not a black-and-white world, and what may seem like a clear-cut case of worker exploitation also has another side. The "This American Life" episode also interviewed New York Times columnist Nicholas Kristoff, who explained that the manufacturing in Shenzhen and surrounding areas has been "a tremendous benefit, not only to southern China, but indeed to much of Asia." For many Chinese, he said, "the grimness of factories like Foxconn was better than the grimness of rice paddies."

But Mike Daisey points out the great irony of companies manufacturing expensive high-tech products in a country where so few could ever afford them. He met one worker who hand was left mangled from working on an iPad assembly line. Daisey brought out his own iPad to show it to the man who had never even seen one turned on. The wide-eyed man slid his useless hand back and forth across the screen, watching the icons moving around, then tells the translator that "it's a kind of magic."

I encourage folks to listen to the episode. It's an i-opener.

To learn more about other American companies that have set their sights on dominating emerging markets, get this special free report.

At the time thisarticle was published Fool contributorDan Radovskyhas no financial position with any of the above-mentioned companies. The Motley Fool owns shares of Apple and Microsoft.Motley Fool newsletter service shave recommended buying shares of Apple, Microsoft, and Dell.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Microsoft.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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