One advantage of contracting out manufacturing was that it distanced brand companies from the work conditions under which their products were made. Seeking lower labor costs usually meant relocating manufacturing to low-wage regions, often with autocratic or corrupt governments; avoiding unions; and paying less attention to worker health, safety, and well-being. If child labor, excessive hours, use of toxic chemicals, repression of unionists, and the like took place within the facilities of a brand company, its image—its most important asset—might well be damaged. But if the problems could be blamed on a contractor down the supply chain, the damage would be less costly and more easily contained. Nike and Apple were both able to survive with remarkably little long-term harm revelations about work conditions and worker treatment in the plants that made their products by blaming contractors, promising better oversight and more transparency, and issuing new codes of conduct.40
The location and size of the contract factories serving large retailers and brand companies varied greatly and changed over time. Early on, many American electronic companies contracted with local firms, some in or near Silicon Valley, to build their products. But logistical and political changes made it ever easier to locate manufacturing plants at great distances from contracting firms. Container shipping and expanded airfreight capacity increased the speed and lowered the cost of shipping. Cheap international telephone rates, satellite connections, and the internet improved communications. Lower tariffs reduced the surcharge on manufacturing across borders.
As retailers and brand-name firms like Wal-Mart and Apple relentlessly pressured their suppliers and subcontractors to lower their prices, firms scouted the world for low-wage regions to locate their factories. Mexico was one favored site. So, following the collapse of Soviet communism, were Eastern European countries. Textile and garment manufacturers built plants in Central America, the Caribbean, South Asia, and Africa. Malaysia, Singapore, and Thailand attracted contract electronics manufacturers. And, more and more, manufacturers looked to China to locate their plants, with its vast, cheap labor pool and cooperative government authorities.41
The staggering size of orders from transnational corporations like Hewlett-Packard, Adidas, and Wal-Mart made it convenient for them to depend on concentrated production centers, minimizing the administrative and logistical tasks that would result from using many widely scattered suppliers. The changed economics of shipping made it possible for them to concentrate manufacturing in a single small region or just a single factory. In the nineteenth and twentieth centuries, even companies known for centralized, vertically integrated production, like Ford, set up branch plants to assemble products for markets distant from their main factories. But the radical reduction in shipping costs and increase in shipping speed, largely as a result of container shipping and highly efficient port logistics, meant that companies like Apple could supply a particular product to retail stores and internet customers around the world from just one or two locations.42
Concentrated production did not necessarily mean big factories. Sometimes it meant industrial districts or centers where many small plants and ancillary services clustered together. In the mid-2000s, over a third of the world’s socks—nine billion pairs a year—were produced in Datang, China, not by one company but many, supplying retail giants, including Wal-Mart. Production of neckties began in Shengzhou, China, in 1985 when a Hong Kong company moved its production there. Soon various managers left to start their own companies and tie production grew until the city became the global leader, able to meet orders of hundreds of thousands of units at a time. At one point Yiwu, China, had six hundred factories where workers, who in many cases did not know what Christmas was, produced over 60 percent of the world’s Christmas decorations and accessories.43
But sometimes scaling up meant just one giant factory. For some products, including footwear and electronics, big buyers, especially brand marketers, have preferred very large factories, which can consistently provide the vast quantity of goods they sell and quickly gear up to make new products or meet rush orders. Apple represents this tendency taken to the extreme. It produces only a very limited number of products but in mind-boggling quantities. Its marketing strategy depends on carefully choreographed, highly publicized annual or semiannual product introductions, stimulating global stampedes by consumers eager to get the newest product and demonstrate their position on the leading edge of technology, style, and modernity. In June 2010, Apple sold 1.7 million iPhone 4s in the three days following its introduction. In September 2012, it sold five million iPhone 5s on the first weekend of sales. Three years later, the company sold more than thirteen million iPhone 6 and 6 Plus units during the first three days after launch. With final product design often locked up only shortly before sales begin, Apple needs to mobilize a vast amount of labor in a very short time to produce inventory for the sales rush to come. Factory giantism has been the solution Apple has adopted, though the giant factories are not its own.
Using giant contract manufacturers, like Foxconn and Yue Yuen, has allowed Apple, Nike, and their ilk to operate without large standing inventories of products that tie up capital and run up warehouse expenses. Even more important, just-in-time production avoids the possibility of being stuck with piles of outdated cell phones, laptops, or sneakers in what are essentially fashion industries. Tim Cook—the Apple executive who masterminded the company’s shift from in-house production to contracting out before succeeding Steve Jobs as CEO—once called inventory “fundamentally evil.” “You kind of want to manage it like you’re in the dairy business. If it gets past its freshness date, you have a problem.”44
Foxconn and Pegatron keep Apple’s milk fresh by rapidly mobilizing hundreds of thousands of young, poorly paid Chinese workers, often under harsh conditions (perhaps closer to evil than inventory). In 2007, just weeks before the scheduled unveiling of the first iPhone, Jobs decided to switch from a plastic to a glass screen. When the first shipment of glass screens arrived at the Foxconn Longhua plant at midnight, eight thousand workers were awoken in the dormitories, given a biscuit and a cup of tea, and sent off to begin a twelve-hour shift fitting the screens into their frames. Working around the clock, the plant was soon pouring out ten thousand iPhones a day. On occasion, to fulfill an order, Foxconn moved large groups of workers from one factory to another in an entirely different part of the country. Meeting surges of demand requires not only a vast army of labor but also a large corps of junior officers, thousands of industrial engineers to set up assembly lines and oversee them, something that China, with its massive program of technical education, can provide. It is this ability to quickly scale up (and, when the rush is over, quickly scale down) production that Apple and other customers prize in the giant contract manufacturing plants that have sprung up in East Asia.45
A combination of Fordism and Taylorism facilitates the rapid mobilization of unskilled workers. Apple is ideal for this approach, because it makes a very limited number of highly standardized products, just as Henry Ford did. Some of the final assembly procedures for Apple’s computers and mobile devices are highly automated, but most are not. Rather, they involve an extreme division of labor, very simple tasks repeated over, and over, and over again. Workers can be taught them in virtually no time—critical given the very high turnover of workers at factories employing Chinese migrant workers (who have no reason to be loyal to their employers and frequently switch jobs) and the need to bring on fleets of new employees rapidly when big orders come in. The orientation for new hires at Foxconn involves lectures about company culture and rules, but no training in actual production tasks.46
Many large contract manufacturing firms cope with big rush orders by subcontracting some of the work to small companies with which they have relationships. Rather than either/or, large and small factories often work in symbiotic relationships, with the bigger companies helping small ones, sometimes just family workshops, to set up as parts suppliers or as subcontract assemblers or processors.
Such networks enhance the ability of big firms to quickly scale up production without adding to their fixed costs.47
Some contract manufacturers have preferred large-scale factories for their own convenience or out of a kind of corporate vanity, separate from the preference of their customers. The head of a firm that made cases for PCs and game consoles related that he preferred to buy land in low-wage areas close to major markets, build a large factory, and set up suppliers right there. Rather than many small factories, his company runs six big industrial parks spread around the globe. Yue Yuan built gigantic factories in part simply as a strategy to quickly raise its capacity to produce a vast volume of shoes in its successful quest to become the world’s largest footwear company. Foxconn’s Longhua plant grew very large out of a rush to scale up production, as well as to serve as a showcase for the company and its CEO, Gou. The manager of the complex felt it far too big for efficient operation. Most subsequent Foxconn factories have been considerably smaller, though still very large.48
Asian industrial giantism requires state support. In recent decades, the Chinese government has maintained the Soviet and early Mao-era view that very large concentrations of productive capacity are the quickest route to industrial advance and economic growth (a policy Vietnam has followed as well), with distributed, small manufacturing no longer a major thrust. Concentration has not necessarily meant giant factories. The Chinese government actively encouraged the creation of the sprawling clusters of small and midsize firms making specialized products, providing big parcels of land for development, creating industrial parks, building infrastructure and transportation, and providing tax benefits. But often it has meant outsized plants. One manager in the Chinese automobile industry, which is partially owned and heavily guided by government entities, told sociologist Lu Zhang “the government wants big firms. To achieve large scales and high volumes in a short time, we rely not only on highly advanced machinery, but also on our hard-working workers—our comparative advantage.” Provincial Chinese governments have embraced industrial giantism as a development strategy. Companies seeking to build large new plants have been offered land (sometimes for free), tax breaks, reduced-cost electricity, and help in recruiting a workforce (including student interns, an increasingly important source of cheap labor for manufacturers).49
Inside the Behemoth
What is it like to work in the industrial behemoths of modern Asia? In some ways, the experience is remarkably like that of factory workers generations and even centuries ago in England, the United States, and the Soviet Union. As was the case with nineteenth-century Lowell-style mills, many young women and men have been attracted to twentieth- and twenty-first-century Asian factories by the opportunity to earn money and help their families, build houses or pay for a sibling’s education, or amass savings to start a business or bring to a marriage (providing women some protection in case it goes bad). Some women sought to escape arranged marriages, patriarchal control, or family disputes. Just as in the Lowell-style mills, most workers returned to their home village after a few years of factory work to settle down to marriage and family in the countryside, farming or sometimes setting up small businesses.
But factory work in China has not only been a means to make money but also a way to escape rural provincialism and experience city life and what is seen as modernity. The first generation of migrant workers, in the 1980s and 1990s, had little idea of what to expect. Returning migrants were living billboards for a different world. One teenaged woman from an ethnic minority in Guangxi Province recalled that when young people from her village came back for the New Year celebrations in their new clothes, she was envious, echoing the experience of New England teenagers nearly two centuries earlier. She soon left to take a job in an electronics factory. Later migrants were more sophisticated, having seen images of city life and modern factories on television and become at least superficially familiar with fashion and fashionable products through smartphones. One young female worker from Hunan Province, who took a job in an electronics factory near Guangzhou, recalled “When I saw factories on TV, they always seemed so nice: well-built buildings, tiling, and a clean environment, so I thought it would be fun.”50
Going from the countryside to a factory hundreds of miles away, teeming with tens or even hundreds of thousands of workers, could be deeply disorienting. Recently industrialized Chinese cities do not look like modern equivalents of Manchester. Because so many low-paid workers live in company dormitories, there are not sprawling districts of slums. Some industrial centers, like Shenzhen, contain within them neighborhoods or villages filled with migrant workers and businesses serving them, which reproduce something of the feel of village life. But most new industrial regions are modern and large scale. Upriver from Shanghai, sociologist Andrew Ross reported “Spotless, newly laid highways reached out in all directions. Crowding out all the other buildings were the industrial newcomers—fat, squat warehouses with high-tech roofs, rows of factories as long as freight trains, and a multitude of postmodern boxes that carried the brand of their corporate owners but said nothing about what was done inside their walls.” Driving across Dongguan, Nelson Lichtenstein and Richard Appelbaum saw “broad but heavily trafficked streets, continuously bordered by bustling stores, welding shops, warehouses, small manufacturers, and the occasional large factory complex. This is how the cities of the old American rust belt must have once looked, smelled, even vibrated.”51
Simply finding the way around vast factory complexes like Foxconn City could be bewildering to teenagers who had rarely left their small villages, if ever. The Longhua plant covers over two square kilometers; it takes an hour to walk from one side to the other. Many signs at Foxconn plants were English acronyms, meaningless to newcomers. Frustration and anomie from sudden immersion in an alien world contributed to the rash of Foxconn suicides.
But there was excitement, too. Many migrant workers marveled at new sights and experiences. One worker from Hunan, assigned to a factory dormitory, recollected, “I had never lived in a multi-story building, so it felt exciting to climb stairs and be upstairs.” Just as had been the case in the Soviet Union in the 1930s, something as simple—and taken for granted—as a staircase could be the divide between two universes.52
The factory giants in China and Vietnam are not sweatshops. Generally, they are recently built and modern looking, though undistinguished. Inside they are mostly clean, orderly, and well lit. Some are air conditioned. As a rule, conditions, pay, and benefits are better in foreign-owned large factories than in locally owned small plants and workshops. And large factories are less likely than small ones to cheat workers out of what they are owed, a big problem in China.53
Still, work inside large factories often is difficult and the atmosphere oppressive. Many Taiwanese-owned industrial giants use quasimilitary discipline to control their workforces, full of newcomers. Workers at EUPA, Foxconn, and other large plants wear company uniforms. Plant security is intense. The entire perimeter of Foxconn City is walled, with barbed wire topping some sections. Like River Rouge, entry is only though manned security gates. Identification cards are necessary to enter most large factory complexes and sometimes again to enter particular buildings. At Foxconn plants, surveillance cameras are ubiquitous.
Foxconn puts particular stress on following detailed rules and work instructions—a kind of hyper-Taylorism—enforced by a multilayered management hierarchy. Line leaders, themselves poorly paid workers, supervise individual production lines, in turn overseen by layers and layers of higher-level supervisors. Workers are forbidden from talking on the job (though in practice enforcement varies greatly) or moving about the plant. Slogans adorn banners and posters on factory walls, some reminiscent of Alexei Gastev: “Value efficiency every minute, every second,” others more hyperbolic, “Achieve goals or the sun will no longer rise,” and still others crudely threatening, “Work hard on the job today or work hard to find a job tomorrow.”
At Foxconn and other foreign-ow
ned factories in China, there is no echo of the experiments with worker involvement in management that took place in state-owned enterprises. The genealogy of the internal organization of modern Chinese factory giants lies in Western and Japanese systems of management, not in the earlier years of communist China. Hierarchy is unquestioned, rules and regulations extensive. Quality-control systems, imported from developed capitalist countries, further top-down organization.54
Assembly-plant jobs that require the rapid repetition of a series of motions for long periods of time are exhausting and even debilitating, reminiscent of early English textile mills where child workers suffered physical damage from doing the same tasks over and over again. At the Foxconn Chengdu plant, some workers’ legs swelled so badly from standing all day that they had difficulty walking. Extremely long working hours compound the problem. Though Chinese laws stipulate a normal workweek of forty hours and limit overtime to nine hours a week, factories routinely ignore them, scheduling much longer workweeks. Schedules of well over sixty hours are not uncommon. At Foxconn, workdays of twelve hours (including overtime) are common, but there and elsewhere, when order deadlines approach, workdays can stretch even longer. Foxconn workers switch between day and night shifts once a month, much like American steelworkers used to rotate shifts every two weeks, leading to sleep loss and disorientation. Though workers like extensive overtime for the boost it gives to their earnings, they have fought to control their hours and raise wages so that huge amounts of overtime are not necessary to make a decent living. At one giant Yue Yuen factory, workers found the mandatory overtime so exhausting that they struck in protest. Just as in Marx’s time, much of the struggle between labor and capital in today’s megafactories revolves around the length of the working day.55
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