FLA Issues Adverse Foxconn Audit Results; Apple (AAPL) Shares Close Near Session Lows
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Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 0.5%
Revenue Growth %: -4.3%
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Apple (Nasdaq: AAPL) ended Thursday's session on a sour note following the release of an external audit from the Fair Labor Association (FLA) into supplier Foxconn.
The report is 13 pages long and can be accessed here. "The findings of FLA’s nearly month-long investigation revealed serious and pressing noncompliances with FLA’s Workplace Code of Conduct,1 as well as Chinese labor law." Yikes.
The FLA report continues: "In its investigation of Foxconn, FLA observed at least 50 issues related to the FLA Code and Chinese labor law, including in the following areas: health and safety, worker integration and communication, and wages and working hours."
For working hours, the FLA said tens of thousands of workers would need to be recruited in order for Foxconn to meet FLA labor standards.
On safety, the FLA report said many Foxconn workers felt at fear for their safety. Notably, aluminum dust was of main concern. The FLA noted Foxconn did take extra steps to reduce the amount of aluminum dust following the Chengdu factory explosion last year.
Workers felt alienated and said they had no voice over factory improvements or working conditions. The FLA said workers will have a better say on committees and other union structures moving forward. Additionally, from the report, "All workers will receive a copy of the Collective Bargaining Agreement and new employees will receive information about union activities during their orientation process."
There were also some issues surrounding social security and overtime pay.
Foxconn obviously needs to make a lot of changes. When changes will need to be made is of curiosity. At the end of the report (SPOILER ALERT), the FLA stated: "The remedial plans agreed with Apple and Foxconn involve specific deliverables in defined timeframes. FLA assessors will verify some items on site and impact assessments will be made of certain aspects - training in particular - of the remedial process. Many of those have specific milestones that the FLA will track over time and report on publicly via our website."
Apple shares slipped 1.3 percent on the session.
Apple (Nasdaq: AAPL) ended Thursday's session on a sour note following the release of an external audit from the Fair Labor Association (FLA) into supplier Foxconn.
The report is 13 pages long and can be accessed here. "The findings of FLA’s nearly month-long investigation revealed serious and pressing noncompliances with FLA’s Workplace Code of Conduct,1 as well as Chinese labor law." Yikes.
The FLA report continues: "In its investigation of Foxconn, FLA observed at least 50 issues related to the FLA Code and Chinese labor law, including in the following areas: health and safety, worker integration and communication, and wages and working hours."
For working hours, the FLA said tens of thousands of workers would need to be recruited in order for Foxconn to meet FLA labor standards.
On safety, the FLA report said many Foxconn workers felt at fear for their safety. Notably, aluminum dust was of main concern. The FLA noted Foxconn did take extra steps to reduce the amount of aluminum dust following the Chengdu factory explosion last year.
Workers felt alienated and said they had no voice over factory improvements or working conditions. The FLA said workers will have a better say on committees and other union structures moving forward. Additionally, from the report, "All workers will receive a copy of the Collective Bargaining Agreement and new employees will receive information about union activities during their orientation process."
There were also some issues surrounding social security and overtime pay.
Foxconn obviously needs to make a lot of changes. When changes will need to be made is of curiosity. At the end of the report (SPOILER ALERT), the FLA stated: "The remedial plans agreed with Apple and Foxconn involve specific deliverables in defined timeframes. FLA assessors will verify some items on site and impact assessments will be made of certain aspects - training in particular - of the remedial process. Many of those have specific milestones that the FLA will track over time and report on publicly via our website."
Apple shares slipped 1.3 percent on the session.
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