If you look at the back of any iPod or iPhone, you’ll see a small imprint that reads, “Designed by Apple in California. Assembled in China.”
Specifically, many of Apple’s products are manufactured by Foxconn, a Taiwanese based company with a workforce that numbers in the hundreds of thousands. Earlier this year, Foxconn was unwillingly thrust into the spotlight due to a rash of employee suicidesthat highlighted some very arduous working conditions in the far east. Foxconn CEO Terry Gou subsequently took steps to address employee suicides, which included pay raises for some employees, on-site 24-hour counseling center for troubled workers, and even safety nets at the bottom of employee dormitories.
Gou himself is currently the richest man in Taiwan with a personal worth estimated at close to $6 billion, a figure made all the more impressive given that Gou’s foray into the business world began with a meager $7500 loan from his mother.
Since then, Gou has transformed Foxconn into the biggest exporter out of China, and sales this year are expected to reach $85 billion.
Recently, BusinessWeek secured a rare and exclusive interview with Gou. While much of the piece discusses Gou’s rise to the top, there are a few nuggets that pertain to Apple.
Regarding employee suicides at Foxconn:
Gou conceded that he didn’t immediately grasp the significance of the suicides. “I should be honest with you,” he says. “The first one, second one, and third one, I did not see this as a serious problem. We had around 800,000 employees, and here [in Longhua] we are about 2.1 square kilometers. At the moment, I’m feeling guilty. But at that moment, I didn’t think I should be taking full responsibility.” After the fifth suicide, in March, Gou says, “I decided to do something different.”
More interestingly, the report relays the story of how Guo wasted no time in ordering millions of dollars in new equipment so that Foxconn could adequately meet Apple’s stringent design requirements.
“When Apple’s iPhone4 was nearing production, Foxconn and Apple discovered that the metal frame was so specialized that it could be made only by an expensive, low-volume machine usually reserved for prototypes. Apple’s designers wouldn’t budge on their specs, so Gou ordered more than 1,000 of the $20,000 machines from Tokyo-based Fanuc. Most companies have just one. “Terry is a strong leader with a passion for excellence,” says Tim Cook, Apple’s chief operating officer. “He’s a trusted partner and we are fortunate to work with him.” The Longhua plant now produces 137,000 iPhones a day, or about 90 a minute.”
All in all, it’s a fascinating glimpse into the life of a self made man responsible for manufacturing the iPhone you very well may be reading this article on. You can check out the story in its entirety over here.