Tag Archives: Foxconn

Apple’s CEO shows how to handle a media-caused crisis

I’ll admit it. I’m an Apple fan. I’m writing on a huge iMac, with four other Apple products nearby. And yes, I own some stock, but purchased recently unlike my much smarter children who bought it a long time ago. So I’ve been watching Tim Cook, Job’s replacement, very closely for clues to what Apple’s future holds. And particularly the simmering crisis over working conditions.

The accusations looked serious, and they are serious. But, increasingly it looks as if the accusations are once more about reporters and editors looking for attention-grabbing headlines at the expense of hard-earned reputations rather than telling the truth and giving the whole picture.

The article in the Jan 26 edition of The New York Times is clearly intended to produce shock and awe. The headline: “In China, Human Costs are Built into An Ipad.” The article starts with a horrific explosion with words like: eruption, fire, noise, twisted metal pipes. It gets worse as it tells the story of victims of the explosion where people were polishing ipads:  “His features had been smeared by the blast, scrubbed by heat and violence until a mat of red and black had replaced his mouth and nose.”

Then, Apple is introduced as the cause of this mayhem:

In the last decade, Apple has become one of the mightiest, richest and most successful companies in the world, in part by mastering global manufacturing.

It’s no secret to Crisisblogger readers that I detest this kind of reporting, particularly from The New York Times which has such a rich journalistic tradition. This kind of approach one would expect from an extremist worker’s right advocacy organization engaging in propaganda and polemic. But to have it come masquerading as journalism from one of the most esteemed publications in the world is bothersome. I’m not even talking about the facts here, I’m talking about the style clearly intended to generate outrage. Bring in the facts, which we are beginning to see are quite different from the portrayal in this story, and it becomes even more troublesome.

This story from today’s Daily Dog is instructive in the change in tone on this major crisis. Daily Dog tends to buy the mainstream media’s line on almost every crisis I have seen including Toyota, BP, Netflix, etc. (I’ve commented on that frequently here, seeing that as surprising for a publication that serves the PR industry). Here is the Dog’s assessment: “Looking to get in front of the story, Apple enlisted the Fair Labor Association (FLA) to conduct an audit of the Foxconn facilities — and the resulting report has quickly broken a PR mountain down to a molehill. “

As usual, the story of worker conditions in China are far, far more complicated than the NYT’s and the hundreds of thousands of protest signers will allow. For one thing, there is the overall disparity in working conditions between the US and the rest of the world. But, it is because of companies like Apple that that disparity is rapidly decreasing. USAToday has comments from several on this controversy, including this from Tim Worstall of Forbes:

“It is precisely because Apple manufactures in China that conditions for manufacturing workers in China are getting better. Better at a rate never before seen in human history. And if we were to be realistic about this, instead of spouting nonsense, then we would recognize this basic fact. And it is that last which is the most important fact about it all. Far from a boycott of Apple products being the best way to better conditions at the manufacturing plants, it is the purchase of products from such plants which is, as it has been for the past few decades, making China a richer and better place. Boycotting Apple for better Foxconn wages and conditions is like having sex for virginity. Entirely counterproductive and exactly the wrong thing.”

And David Pogue, the highly regarded tech writer for NYT, has a far more nuanced view of the issue than the propagandists behind the Jan 26 NYT article: “Nobody wants to see workers exploited, and if Apple can pressure Foxconn to clean up its act, it should. Apple is the poster child for the conditions at the Foxconn factory. (But) Apple isn’t the only company that builds electronics at Chinese factories. The truth is, almost all of them do. … What assurance would the Apples and Dells and Panasonics have that if they forced their Chinese contractors to adopt American-level wages and conditions, their competitors would all do so simultaneously? That’s the part that the protests are missing. Is Apple supposed to be the only company that takes on the costs of improving conditions? Are the protesters seeking a world where an iPhone costs $350 and a competitive Android phone costs $200? … The issue is complicated. It’s upsetting. We, the consumers, want our shiny electronics. We want them cheap, yet we want them built by well-paid, healthy workers. But apparently, we can’t have both.”

The question here really isn’t how bad much of today’s media reporting is, but how to deal with it if you find yourself in the crosshairs of this kind of reporting. Tim Cook was angry and the reports of his reaction made that clear. That’s good if you can stand on solid ground. But the best thing he did was to bring in an independent auditor and to commit to monthly reports on working conditions. He made it clear that Apple has high standards, that it audits, that it is a positive contributor to improving working conditions. But he didn’t leave that to his and Apple’s credibility alone. He brought in an outside auditor for credibility and vowed to make results transparent.

Certainly, there are those now who want the original accusations to be upheld, and who now are trying to discredit the Fair Labor Association as an independent auditor. Which brings us to the basic point and something important for crisis manager’s to understand: the position you take on a story and controversy like this says more about you and your perspectives than about what is being said. There are those who find globalization a great evil, who believe that the very high standards for environmental protection and worker protection that we, as the richest country in history, have adopted should not be compromised one bit by others who do our manufacturing for us. They will find nothing but evil in Apple (and Dell and HP and, and, and all the others who manufacture in China or other countries with cheaper labor than the US. They will discredit those who counter there already fixed opinion.

But, my take on this is also clearly biased as I mentioned at the outset. Biased by my positive view of Apple, by my belief that globalization results in reduced poverty and improved living standards around the world, and belief that media stories like this one are driven more by intense competition for eyes than for a genuine desire to inform.

Dealing with a crisis like this drives us back to the old political strategy of “saints, sinners and saveables.” There are those you will never convince (sinners), there are those who you have with you regardless of the story (saints) and then you have those who could turn in either direction (saveables). The most effective strategy is aimed at the saveables and to prevent as much as possible them moving more and more into the sinner category. I think Tim Cook’s reaction to this very significant crisis demonstrates that strategy and also gives me more confidence in the future of Apple than before the crisis.