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Apple’s Explosive Supply Chain
Serious safety concerns around Apple’s supply chain continue to emerge after the recent weekend explosion in which local media said dozens of workers were injured.
The blast recently happened at a metal casing factory owned by a subsidiary of Pegatron of Taiwan, a major main metal casing supplier and a contract manufacturer for Apple products. Pegatron said in a statement to the Taiwan stock exchange that the blast happened at a part of the site still under construction and therefore would have no immediate impact on production.
But China Labor Watch, a US-based organisation, said the blast was caused by aluminum dust in a workshop where iPad cases were polished. It said 61 workers were hurt in the explosion with 23 hospitalised. Pegatron declined to comment beyond its stock exchange statement.
This is not the first trouble at metal casing factories in China. In May, three workers were killed and 15 wounded in an explosion at another metal casing factory in Chengdu owned by Foxconn, a subsidiary of Hon Hai, the world’s biggest electronics contract manufacturer and Apple’s main manufacturing partner. Investigators identified a build-up of dust as a possible cause of the blast.
In October, Chinese officials ordered the closure of a metal casing plant owned by Catcher, another Taiwanese supplier, for violating environmental regulations after local residents complained of bad odours generated by the plant.
According to Shaw Wu, an analyst of Sterne Agee, the incident would have small impact on iPad’s production. “The risk of disruption to Apple’s supply chain due to the explosion in Pegatron’s factory is minimal,” he told Reuters.
“It’s a setback but it’s relatively minor,” Wu said. In his opinion, Pegatron is only a third-tier supplier for Apple. “The Foxconn (Chengdu) explosion was a much bigger deal but still they were able to work around it fairly quickly.”
Critics have taken Cupertino, California-based Apple to task for alleged violations of labor and environmental standards by its China-based suppliers, and the company has said it is working to resolve such problems.
Foxconn, which also supplies products for many other top consumer electronics companies, has also recently dealt with employee suicides, prompting Apple’s then-COO (and current CEO) Tim Cook to visit Chinese factories in person over workplace concerns.
There is a sharp contrast between the strong performance of Apple and the poor condition of the workers working on its assembly line in China. It is expected that very little will be done as Apple increasingly rely on Foxconn for its manufacturing, a company known for hiding and violating basic working environment standards in China for years.
