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On Eve Of iPhone Launch, Apple Hit With Another Manufacturing Scandal

Daily Ticker

Foxconn, the company that assembles Apple's iPhones, has been employing tens of thousands of "interns" who have been forced to make iPhones as part of their school-work, the New York Times's Charles Duhigg reports.

This follows on the heels of the intense scrutiny Apple (AAPL) and Foxconn faced last year, in the wake of a fabricated report that Foxconn employed workers as young as 13 and paid them like slaves. In response, Apple stepped up its commitment to monitoring its supply chain. Apple's move, combined with the exposure of the Foxconn report as a fraud, quickly put most of the concerns to rest.

In this case, Foxconn acknowledged that it employed about 32,000 students. The company said that the students were not required to work as part of their curriculum, but several students disputed this. They said they were told that if they refused to work, they wouldn't graduate.

Foxconn appears to have used the "interns" to ramp up its production lines in weeks leading up to the iPhone 5 launch. It's not clear whether the students were paid for their work.

This labor issue seems much less serious for Apple than the prior one, and it will likely blow over quickly.

More broadly, though, as China's economy matures and huge American companies like Apple continue to coin money with the help of cheap Chinese labor, these issues are likely to come up again and again. In the 1980s, frustration with South Africa's apartheid policy led to pressure being put on many global companies to withdraw from South Africa until the policy was changed. It remains to be seen whether human rights concerns in China will ultimately provoke this sort of response, but the issue isn't likely to go away.

Meanwhile, Americans are eagerly getting ready to line up to buy the iPhone 5.


Tour The Foxconn Factory Where Teens Are Making Your iPhone For $2 An Hour