Whitewash of the investigation of Apple's Chinese suppliers would hurt Microsoft, too

Before the investigation of working conditions at Apple's Chinese suppliers has even begun, the head of the group doing the work has praised the biggest and most controversial factory. This potential whitewash will hurt Microsoft as well as Apple, because the same company turns out Microsoft hardware, the Xbox.

Apple asked the Fair Labor Association (FLA) to do the investigation after the New York Times published an in-depth article documented horrific working conditions at the Chinese factories making Apple products, notably Foxconn.

Some groups criticized the choice of the Fair Labor Association, claiming that it was too cozy with companies that fund it.

It's starting to look as if those groups are right. Even before the investigation had really begun, the FLA president Auret van Heerden heaped praise on Foxconn, saying "its facilities are first-class," and that "Foxconn is not really a sweatshop," among other statements.

Having the president of FLA praise the factories his group is supposed to be investigating before the investigation has truly started makes one think that this isn't going to be an honest investigation. As Scott Nova, executive director of the Workers Rights Consortium, told the New York Times:

"I'm amazed that the F.L.A. would give one of the most notoriously abusive factories in the world a clean bill of health -- based, it appears, on nothing more than a guided tour provided by the owner."

If the investigation turns out to be a whitewash, it will hurt, not help Apple. A brand's name has actual value, billions of dollars, in fact, and when the brand is tarnished, it hurts the bottom line, because people are less likely to buy from the company, and the company is forced to spent more in marketing and advertising to build its image. So a flawed investigation will cost Apple considerable money.

It will hurt Microsoft as well. Although Apple has gotten all the bad publicity about Foxconn, the factory turns out work for Microsoft as well. Foxconn makes the Xbox for Microsoft, and there have been serious problems reported with the way those workers are treated. John Grgurich of the Motley Fool reports that up to 200 Foxconn workers threatened mass suicide because of working conditions, and that they were making the Xbox.

Eventually the public spotlight about working conditions at Chinese factories will turn on Microsoft as well as Apple. So Microsoft has a lot to lose if the investigation is a whitewash.

It's not yet clear if the investigation will be a whitewash, because the FLA's second-in-command Jorge Perez-Lopez in essence criticized the FLA president for praising Foxconn. He told the New York Times:

"The work we're doing at Foxconn is not about first impressions or whether something has a paint job or not. The proof will be in the pie, will be in the eating. It will be when the report comes out."

Microsoft, as well as Apple, should hope that the report will be a fair one.

Copyright © 2012 IDG Communications, Inc.

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