Apple ‘determined’ to improve conditions at plants in China

Apple CEO Tim Cook on Tuesday said that the world’s most valuable tech company is doing everything it can to address growing concerns over working conditions at its Chinese manufacturing plants.

“We know people have a very high expectation of Apple,” he told hundreds of investment professionals at the annual Goldman SachsTechnology and Internet Conference in San Francisco. “No one in our industry is doing more to improve working conditions than Apple.”

Image representing Apple as depicted in CrunchBase

Cook’s comments came one day after the announcement that an independent watchdog group, the Fair Labor Association, hasbegun auditing conditions at plants in China that make most of Apple’s products, including iPhones and iPads.

Cook called it “probably the most detailed factory audit in the history of mass manufacturing.” Apple is taking the “unprecedented step” of recording the results monthly on its website, he said.

Abuses at Chinese plants run by manufacturer Foxconn have gained recent attention amid news reports of long working hours, underage workers and a secretive, militaristic culture. The news has become a rare public relations problem for the computer giant.

But Apple’s chief sounded defiant on Tuesday.

“We think the use of underaged labor is abhorrent. It’s extremely rare in our supply chain, but our top priority is to eliminate it totally. We’ve done that with our final assembly and we’re now working with vendors farther down in the supply chain. If we find a supplier that intentionally hires underage labor, it’s a firing offense,” he told the audience.

Cook conceded there have been widespread violations of the number of hours employees should be allowed to work. He said the Apple’s code of conduct allows for no more than 60 hours a week — 20 more hours than a typical week for American workers.

“We’re determined to drive widespread change,” he said.

Appearing on stage with Goldman Sachs hardware analyst Bill Shope, the 51-year-old Apple CEO fielded questions on a range of topics.

When the subject turned to Apple’s $98 billion in cash, Cook said the company’s board of directors is in “active discussions” on what to do with it.

“I think it’s clear to everyone we have more cash than we need to run the business,” he said.

Still, Cook gave no indication on whether Apple would begin issuing dividends to shareholders, something the company has long avoided.

Cook also declined to go into detail about speculation on whether the company intends on entering the TV business. But he spoke enthusiastically about the company’s $99 dollar set-top box, which the company labels “a hobby.”

“It’s clearly ramping [up],” he said, noting that Apple increased its sales to 3 million units last year. Still, that number pales in comparison to other Apple products. The company sold 37 million IPhones last quarter alone.

“We’ve always thought there was something there [in TV],” he said.

As for tablets, Cook bristled at the suggestion that lower prices from its competitors could hurt its business. Amazon’s popular tablet, the Kindle Fire, for example, sells for $199 compared with $399 for the iPad.

“Price is rarely the most important thing,” he said. “A cheap product might sell some units. Then they get home and use it and the joy is gone.”

Cook ended the 45-minute session by talking about the philosophy driven by his predecessor, Steve Jobs, who died in October.

“Steve drilled in all of us over many years that the company should revolve around a few great products, ” he said. “Don’t think about how great things were yesterday.”


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