Although I have visited a number of factories in China I’ve never had the opportunity to visit the giant Foxconn factories which are located in several different parts of China. Foxconn is actually a Taiwanese company as an affiliate of Hon Hai Precision Industry. Yesterday (Thursday) Apple Inc. agreed that it would work with its partner Foxconn to improve wages and working conditions at the factories where iPads, iPods, and iPhones (among other products) are made – http://www.msnbc.msn.com/id/46896890
The independent Fair Labor Association claims that the results of their probe ends up being good for Foxconn, good for Apple and not least importantly – good for the factory workers themselves. Foxconn has more than 1.2 million workers. Does this mean that popular products made by Apple will become more expensive? Probably but keep in mind that labor costs are only a small part of the total cost of Apple devices made in China. Other companies such as H-P, Amazon, and Sony will all face similar changes and possible price increases.
When I have visited factories in China I cannot ever recall being appalled by the working conditions. That may just be my particular experience and not indicative of things in general. The factory buildings are inelegant and utilitarian. South China, where the city of Shenzhen is located, is very warm for much of the year and there are areas in the factories that are not air conditioned. In fact the Chinese are cost conscious and therefore energy saving conscious. Many offices only have room air conditioners (no central A/C) which are left off when the rooms are not in use. I recall many meetings in a room with temperatures in the mid-80F range when the meeting began. We all were sweating but by the end of the meeting the temperature was a more bearable 75F which somehow felt really cool. But on the factory floor there were fans everywhere and while it was warm it was not uncomfortable and the employees seemed to not be bothered at all.
The probe centered a great deal on the amount of hours Foxconn factory workers were working. What was interesting to me is that during peak production, workers put in more than 60 hours a week on average. Apparently they were paid overtime for additional hours over what they signed on for. Since many of the workers travel far distances to work in factories in order to earn money, they live on the premises in dormitories during the week and some even on the weekends if they live too far away to travel back and forth. It’s possible that those workers counted on the overtime as often is the case here in the United States. But Apple acknowledging that it can play a part in making working conditions better for Foxconn’s employees is a positive development overall.
As China’s economy continues to grow and standards of living continue to improve, it will become more important for Chinese factories to provide technological solutions to problems and challenges and not just bodies. There are now new places in the world that can offer labor costs less expensively than China. Yet since the worker cost in a device like an iPad is small, the likelihood of moving production out of China is not as imminent as some people might like to believe. Accordingly the uneasy marriage between Foxconn and Apple will be around for quite a while yet.
Do you feel Chinese factory workers are being treated unfairly? And if so on what basis do you make that assertion?
Back more than thirty years ago when I went to college in Los Angeles and flew back to New York to visit my family, I recall paying (well actually my parents did) $99 each way to fly from L.A. to New York. It was a really good deal then. Translated into today’s dollars that round trip would cost more than $300 each way or a roundtrip fare of over $600. Anyone that has flown recently is aware that a round trip coast to coast fare for less than $600 can be purchased rather easily.
So even with skyrocketing airline fuel costs, the cost of air travel today continues to be less (inflation adjusted) than what would be expected. Is it possible that airline travel is too cheap? Well maybe in terms of the kind of service you receive flying domestically in the USA. However most people I talk to don’t feel airline travel is inexpensive. People seem to wax nostalgically about the halcyon days of air travel with better meal service, more attractive and attentive flight attendants and smaller crowds. Of course it’s easy to forget that until 1988 people could smoke cigarettes on airplanes – I doubt many people wish to return to that particular practice. Here’s a video of those not-so-good old days – http://www.youtube.com/watch?v=6_caR1bkOEg
Cheap (or cheaper) airline travel has enabled many people who heretofore could not have traveled by air to afford to fly to see family, friends, do business or take a vacation. Would people today be so willing to fly to Las Vegas (just as an example) from New York if the round-trip fare was $1,000 or more?
While it’s true that the level of service on airlines has dropped overall and yet at the same time air travel is being segmented such that the ‘Elite’ traveler continues to receive something reminiscent of the ‘classier’ airline service of the past, while the ‘proletariat’ (low-fare) traveler is taking what amounts to be an air bus – literally. But then the low-fare traveler would not have been able to do that thirty or more years ago. At that time air travel was still considered to be a bit of a luxury. Today, airline travel, if nothing else is…a commodity. And if you agree that airline travel today is a commodity – is that a bad thing?
Here in 2011 people think nothing of hopping on a plane to do whatever strikes their fancy. They can use a myriad of online services to check out the lowest fare and if that’s the driving force they can get to where they are going – perhaps not directly and maybe even with three or more connections, cheaply and for the most part safely. This is not only true in the U.S. but something I’ve noticed when traveling in China and Asia in general. There is not much ‘class’ in airline travel anymore as it’s become a tool for the masses. I think that’s a positive thing and something people overlook more often than not.
People like to complain (I’m among them) and ignore basic facts such as airline travel is cheaper than it’s ever been and airfare costs are not usually the determining factor on whether to fly somewhere – or not.
So the next time you have to fly somewhere and you go for the lowest cost think about that cost being 3 times what you are quoted and ask yourself would you still be doing it?
I could not wait any longer. As a longtime customer (more than ten years) of Blackberry devices I feel I gave them ample time to give me a reason to buy a new device from them as my now ancient BB Storm 2 was dying a slow death day after day. After waiting for over a year for Blackberry to come up with something I might want to buy, I finally gave up and purchased a Motorola RAZR Droid.
Here’s what I will miss from Blackberry. Very little. Email security? Maybe a bit, but that’s more based on Blackberry’s reputation than anything that’s ever happened to me. Syncing with MS Outlook? Yes I will miss the ‘ease’ of hooking up a firewire and syncing all of my desktop MS Outlook data (contacts, calendar etc.) with my mobile device. It won’t be as easy but I have a feeling the adjustment will not be all that troublesome. Will I miss BBM? Not really. Since I have unlimited texting it’s not a big issue and I only had a few ‘BBM’ friends. Most of my other BBM friends have migrated off the Blackberry platform as well. The Motorola RAZR Droid is an impressive piece of technology on the Android platform.
Here’s what I will not miss: the limited amount of apps available on the Blackberry platform. I also won’t miss the seemingly incessant need for my Blackberry phone to be rebooted. Frequently it rebooted itself for no reason at all. Rebooting would take more than five minutes. In support of the Blackberry Storm 2 at least I could replace the battery, but I won’t miss it really since the charge barely lasted 8 hours and I needed to carry multiple batteries at all times. I also won’t miss the slow video transmission or the painfully slow internet browser.
Having a new mobile device is always fun during the honeymoon period. Whether the new phone rapture will last is something to be evaluated over the long haul. I think there are many other Blackberry owners that are right on the edge of giving up on the platform as well. After all, why would you want to ‘commit’ to a two-year contract for a phone on a platform that might not last one year?
Sorry RIM – you took too long to give me a reason to continue being a loyal customer. And that’s too bad – it was good while it lasted. Bye-bye Blackberry.
While I readily admit I am not overwhelmed with Tim Tebow’s prospects as an NFL starting quarterback, he is not without assets that could help my favorite NFL team – the New York Jets. In fact the sting of Tebow’s 95 yard late fourth quarter march to victory over the Jets as a member of the Denver Broncos still smarts. Now Tebowmania will be coming to New York and while his addition hardly makes the Jets an immediate Super Bowl contender, the attention and buzz created by the signing shows the Jets understand that football is entertainment and if nothing else Tebow and the Jets offers great prospects for ongoing entertainment. Entertainment + fan engagement = marketing success.
So what if the Jet signing of Tebow was as much for marketing reasons as it was for football. The Jets just extended starting quarterback Mark Sanchez’s contract to five years at a total of $58.25 million. The concern that Mr. Sanchez’s feelings might be bruised with the addition of Tebow is totally overblown. Nobody should feel sorry for Mark Sanchez – he would tell you that himself.
No doubt the first time Sanchez throws a late game interception or fumbles the boo-birds will be out in force calling for Mr. Tebow to ‘take over’. The Jets management team was well aware of that but the allure of bringing in such an interesting player like Tim Tebow was too strong. By NFL standards Mr. Tebow’s contract at roughly $1 million per year makes him a pretty inexpensive backup/wildcat quarterback.
Was the move to bring in Tebow a thinly veiled attempt by the Jets to take back some of newspaper back pages lost to the New York Giants in their unlikely Super Bowl run to the championship this past season? Jet management would tell you no, this was a football move that makes the team better. But don’t think for a moment that the ‘added-value’ of having a New York Jets version of ‘Linsanity’ in ‘Tebowmania’ didn’t play a role in the decision. And is there really wrong with that?
I want to believe that having Tim Tebow take ten snaps a game at quarterback will contribute to the Jets finally returning to the Super Bowl. After all it’s been more than 43 years. Jet owner Woody Johnson, GM Mike Tannenbaum and coach Rex Ryan have made the Jets a preferred destination for NFL players – let’s not forget that as recently as 5 years ago few players had desire to ‘be a Jet’.
If nothing else Tim Tebow’s tenure with the New York Jets will not be boring. However long it lasts.
Do you think marketing played a role in the Jets signing Tim Tebow?
After a 17 month hiatus AMC’s ‘Mad Men’ returns this Sunday in its regular 10PM slot. AMC has also created another new show which debuts with a ‘sneak preview’ April 8th at 11PM (right after ‘Mad Men’) called ‘The Pitch’ – Stuart Elliot of the New York Times covered this in his excellent column on Monday – http://nyti.ms/GHuVXI.
The premise is that a number of real-life advertising agencies compete to win the business of clients such as Subway, Waste Management, and Frangelico to name a few. Apparently the successful highlighting of brands on shows such as ‘Undercover Boss’ has emboldened brands to continue offering themselves up for deeper dives into their collective corporate cultures.
Fifteen agencies agreed to appear – all of them are small or midsize independent shops. The larger agencies have all declined as well as a number of notable smaller ones. Were our agency given the opportunity to participate I’d quickly decline as well. If I were a betting man I suspect fictional Don Draper of Sterling, Cooper, Draper, Pryce would also decline. In fact I recall a terrific scene from season 3 where Don and Conrad Hilton have a meeting where Mr. Hilton asks Don for advertising advice.
I’m Donald Draper.”
{Reminds him they met}
“We have, haven’t we?”
“We had a drink, of course.”
“I can’t believe you’re Conrad Hilton.”
“Don.”
“I’m fine.”
“I really should have known that.”
“Well, they don’t do that for everyone.”
“How did you find me?”
“Well, here I am. What can I do for you?”
{Mr. Hilton asks Don for advice on advertising}
“I think you wouldn’t be in the Presidential suite right now if you worked for free.”
“Connie, this is my profession, what do you want me to do?”
I can understand the attraction of having your agency get exposure as well as an opportunity to show off the kind of thinking that goes on every day at marketing and advertising agencies. However, it is a very slippery slope to offer high level strategic thinking and marketing concepts for free in the hope that your agency will stand out and then be hired. Why buy the cow when you can get the milk for free? Clients really get a big benefit in shows like ‘The Pitch’ in getting free consulting that they may or not choose to avail themselves of, and there’s not much protection for a version of that idea being employed by the client with no restitution to the agency that came up with the idea.
This has been going on in the advertising industry for years and it’s not likely to stop or even slow down.
I’m not mad about the idea at all. Would your agency choose to participate or pass?