Apple and China - time for a new PR strategy?

For the past five years, two things have remained constant about Apple - an inexorable rise in sales and profits, and a steely determination to control its message in the media. But, just as the company basks in the admiration of the financial world after last week's amazing results, is customer concern about where and how all those iPads and iPhones are made going to force a change in its PR strategy?

Let me explain how that strategy works. Its fundamental principle is that Apple will only communicate with the outside world on its terms and to its timetable, and that means at exquisitely stage-managed events in California.

But what happens when American customers and politicians start reading about what seem to be the appalling conditions in which your products are made?

There have been a number of exposes over the past 18 months of working conditions at Apple's Chinese factories.

The most startling I've heard came not from a journalist but an actor, Mike Daisey. His monologue telling of how an obsession with all things Apple ended up with him visiting China and finding workers, some apparently as young as 13, putting in 15-hour shifts, was performed recently on the radio programme This American Life.

More seriously for Apple, the New York Times has run a series of articles over the past week examining why America's most successful company can't manufacture its products in the United States, and then taking a closer look at conditions at its suppliers.

But the latest audit shows that at 93 factories, workers put in more than the 60-hour weekly limit prescribed by the American firm, and a third of all the plants inspected did not have sufficient measures to prevent employees suffering occupational injuries.

Now, calls for consumers to start boycotting iPhones or iPads are unlikely to have much of an impact. After all, just about every major electronics brand manufactures in China, and it is far from clear that if you buy a rival phone or tablet it will have been made under better conditions.

It seems clear too that, however miserable the work in the vast factories making every kind of gadget, it is lifting millions of Chinese out of rural poverty.

READ THE FULL BBC NEWS STORY>

Flush with cash, Apple unveils plan to shift 700,000 jobs to United States

CUPERTINO, CALIF. — Giving new meaning to corporate social responsibility, Apple Inc. announced it is “bringing home” more than 700,000 manufacturing jobs currently held by workers in foreign countries.

“As a leading corporate citizen of the United States,” the company said in a press release, “Apple can’t help but feel some sort of responsibility to its fellow Americans. So why not start hiring them?”

Apple plans to spread the employment across ten different U.S. cities, bringing each city an average of 70,000 new jobs, all with full benefits, by the end of 2013.

“We basically just gave our outsourcing team a different task,” Apple’s chief executive Tim Cook told The OB Rag. “Instead of scouring third-world countries to find where workers come cheapest, we surveyed America to find areas where these new jobs would make the most sense.”

Currently, 12.8 million people are unemployed in the United States, a rate of 8.3%. But Apple’s plan will provide jobs to at least 700,000 Americans, slashing the rate to 7.8% and providing a needed surge to the American economy.

Apple said entry-level assembly-line jobs it was bringing to the United States would pay an average of $25 an hour, or about 10 times the rate currently earned by a typical Apple employee in China.

“When the dust settles, this might reduce Apple’s profit margins and put upward pressure on the price of Apple products,” the company’s press release said. “But honestly, Apple can afford it, and so can Apple consumers. So we’re honored to be in a position to help make America stronger.”

Wealthy consumers around the world have embraced products such as the iPhone and the iPad, drawn to their reputation for high quality and — perhaps more importantly — the social value seemingly signified by their possession.

Accordingly, Apple’s profits have soared and its stock market value has surpassed all other publicly traded companies.

With this success have come more questions about Apple’s hiring practices. A recent New York Times expose revealed the company employs only 43,000 people in the United States versus 700,000 people through sub-contractors in foreign countries with lower standards of living.

Success has also swelled Apple’s cash hoard to an incredible $98 billion.

“Frankly speaking, it’s more than we need to run the company,” CEO Tim Cook told shareholders at Apple’s recent annual meeting.

Cook acknowledged that some shareholders might prefer to see Apple pay out much of the cash in a massive one-time dividend. “This isn’t a case where 100 percent of people are going to agree with what we do,” he said.

Indeed, the U.S. Chamber of Commerce issued a statement condemning Apple’s plan. “Just because corporations get the rights of American citizens doesn’t mean they should be burdened by the same responsibilities,” the statement said. “For example, everyone knows people can’t kill people — but sometimes job creators like corporations need to be able to kill people, as the Supreme Court is working on right now.”

Alan Ableman, a 35-year-old former construction worker who has been unable to find work since 2008…couldn’t agree more…“I hope other executives start thinking like Apple executives,” Ableman said. “Because if America’s most valuable companies don’t start hiring Americans, what kind of an America will we all end up with?”

READ THE FULL STORY HERE>

APPLE JOBS ARE NOT COMING BACK TO THE US

When Barack Obama joined Silicon Valley’s top luminaries for dinner in California last February, each guest was asked to come with a question for the president.

But as Steven P. Jobs of Apple spoke, President Obama interrupted with an inquiry of his own: "What would it take to make iPhones in the United States?

Not long ago, Apple boasted that its products were made in America. Today, few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured overseas.

Why can’t that work come home? Mr. Obama asked.

Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back,” he said, according to another dinner guest.

The president’s question touched upon a central conviction at Apple. It isn’t just that workers are cheaper abroad. Rather, Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that “Made in the U.S.A.” is no longer a viable option for most Apple products.

Apple has become one of the best-known, most admired and most imitated companies on earth, in part through an unrelenting mastery of global operations. Last year, it earned over $400,000 in profit per employee, more than Goldman Sachs, Exxon Mobil or Google.

However, what has vexed Mr. Obama as well as economists and policy makers is that Apple — and many of its high-technology peers — are not nearly as avid in creating American jobs as other famous companies were in their heydays.

READ THE ENTIRE NEW YORK TIMES ARTICLE >

BANK CANCELS THE DEBTS OF POOREST CUSTOMERS

A 375-year-old French bank has decided to forgive the debts of its poorest customers, Good.is reports.

The Crédit Municipal de Paris, a Parisian institution that offers small, low-interest loans against inexpensive valuables, has announced a one-time cancelation of the debts of some 3,500 customers who owed the bank 150 euros (about $190) or less. The announcement marks the bank's 375th anniversary.

A PR stunt? Maybe. But that isn't stopping thousands of customers from celebrating an unexpected windfall.

"It was nice, I have recovered it all," Lina, a young mother, told Europe1. In May, Lina had borrowed 120 euros by pawning her jewelry.

Bank officials say that the European economic crisis has resulted in a 30 percent increase in customers. "People used to get their property back after 11 to 13 months; now it's closer to 24 months," spokesperson Florence Marambat told Good.is.

According to the New York Times, the bank exists in lieu of private pawn shops in France and has served clients like Victor Hugo and Emile Zola.

FULL STORY>

FAIL: APPLE'S REPORT CARD IS BAD NEWS

[FROM THE WALL STREET JOURNAL]

Apple's Report Card

Findings from the firm's annual audit of its suppliers

• 62% weren't compliant with working-hours limits. 
• 32% weren't compliant with hazardous-substance management practices.
• 35%failed to meet Apple's standards to prevent worker injuries.

(Source: Apple's report)

Apple Inc. is increasingly finding itself pinched between the promise and perils of doing business in China.

Under pressure from activists in the U.S. and abroad, the company released a 27-page report detailing working conditions throughout its supply chain, which sprawls throughout Asia, but especially China.

The report is the most comprehensive on the subject in Apple's history, based on 229 audits of factories that do work for the company, the world's second-largest by market capitalization.

Apple said that at its direction, suppliers have stopped discriminatory screenings for medical conditions or pregnancy. Apple also said it found 112 facilities that weren't properly storing, moving or handling hazardous chemicals.

READ THE ENTIRE WALL STREET JOURNAL ARTICLE >

JOHN PERKINS: THE SECRET HISTORY OF THE AMERICAN EMPIRE

IS JOBS A LIAR? THE FBI THINKS SO.

Bloomberg reports that the FBI has released a decades-old file it kept on Steve Jobs, the deceased Apple co-founder, after a background check for a possible appointment by former President George H. W. Bush conducting interviews with unnamed associates of Jobs to judge his character, drug use and potential prejudices:

'Several individuals questioned Mr. Jobs' honesty stating that Mr. Jobs will twist the truth and distort reality in order to achieve his goals,' according to the materials. Several people commented 'concerning past drug use on the part of Mr. Jobs,' according to the file including marijuana, hashish and LSD during the period 1970 – 1974. 

The file also noted that Jobs was not a member of the communist party."

FULL STORY HERE>