Larry Isen’s Emerging China Stocks
In This Post:
- Apple Users Ask “Who Is Foxconn?”
- Foxconn manufacturing process draws scrutiny
- Apple Takes Action With FLA
Apple Users Ask “Who Is Foxconn?”
Apple (NASDAQ: AAPL) is probably just what Wall Street needs to bring retail investors back to the markets. As the company continues to take over the digital wireless and entertainment space with the iPhone, iPad, and the iCloud (which I absolutely love), the stock has finally ripped through the $400 level, but remains undervalued, only trading at about 12x FY 2012 earnings projections. The company is single handedly dragging retail investors back to the stock market, and it’s become one of the greatest stocks of all time to own.
Despite the passing away of founder and tech visionary Steve Jobs last year, everything appears to be perfect in Apple Land. But wait- there is a little bit of dark cloud blocking out the otherwise bright and heavenly light that shines on Apple these days. Consumers are starting to take a hard look at their manufacturing facilities in China, and not liking what they see. Read on McDuff……
Foxconn Manufacturing Practices Draw Scrutiny
Apple’s biggest supplier is China based Foxxcon- an outsourced manufacturer that gets the majority of manufacturing orders from the Apple. Of late, Foxconn has come under fire for working conditions in its Shenzhen and Chengdu manufacturing facilities. Fatal accidents and suicides amongst workers in recent years have brought scrutiny, along with accusations of child labor abuses.
US consumers are starting to take note. The NY Times published and expose article on January 25th entitled “In China, Human Costs Are Built Into an iPad”. The Times chronicled recent explosions and general health care violations taking place at Foxconn manufacturing facilities.
There’s a petition on the web site Change.orgtitled “Apple: Protect Workers Making iPhones in Chinese Factories”- the petition has now garnered over 200,000 signatures. Mark Shields, an Apple customer, started the petition and appealed to the company, suggesting all “Mac People” wanted to hold their heads hi and be proud of the products they use.
Apple Takes Action With FLA
In response to the criticism, Apple joined the FLA- Fair Labor Association, a non-profit organization committed to improving working conditions on a global scale.
This week, the FLA started inspecting Foxconn manufacturing facilities in China. While many critics see this as a publicity stunt by Apple to mitigate the criticism, others see it as a genuine step towards better working conditions associated with Apple products.
The Fair Labor Association (FLA) will conduct “special voluntary audits” at the China based Foxconn’s plants in Shenzhen and Chengdu. In a press release, Apple stated the first inspection commenced this past Monday. Findings will be posted on the organization’s website in March. www.fairlabor.org.
Other critics believe this is simply a transparent effort to rebuild Apple’s image in this area. China Labor Watch’s Li Qiang stated “What Apple should do now is to take action to solve the problems and improve the labor conditions in their supplier factories, not to conduct inspections and put the factories into the media and public’s attention”.
Stand by for more coverage of this controversial issue.
In my view- here’s the best solution- The idiots on both sides of the aisle and in the White House should get together, reduce the corporate income tax rate to 15%, give a tax break for repatriating operations in the US, and bring Apple’s manufacturing back to the US.
But, then again- what do I know?
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