Apple’s beleaguered shares took another hit on Wednesday, down nearly 2% for the day, after the Financial Times reported that the hiring freeze at Foxconn factories were due to a slowdown in iPhone 5 production. A Foxconn spokesperson later denied that the slowdown had anything to do with Apple’s flagship device.
Several alternative explanations were quickly put forward:
- A slowdown in 9.7-inch iPad sales (Fubon Securities analyst Arthur Liao)
- A decline in Hewlett-Packard (HPQ) PC sales (UBS’s Steve Milunovich)
- A shift to robotic production by Foxconn (CBN Daily)
- A shift by Apple to other manufacturers (Business Insider’s Nicholas Carlson)
- Fewer workers going AWOL after the Chinese New Year break (RBC’s Amit Daryanani)
The last theory would mean Apple did have something to do with it. Merely by making Foxconn treat their workers better!
According to Daryanani, History shows that 20%-30% of Chinese workers don’t bother to come back after the holidays to factory jobs. Factors for going AWOL include low pay and harsh working conditions. However, according to Daryanani’s sources, this year the return rate is coming in closer to 90%.
Apple and local worker rights groups have pressured Foxconn to raise wages, cut hours, and generally improve working conditions.
What do you think? Is Apple responsible for the Foxconn hiring freeze? And if they are, isn’t that a great thing to be responsible for?
