Foxconn, Apple's leading Asian manufacturing partner, said Thursday that the two companies plan to share the initial costs of improving working conditions at the Chinese factories where iPhones and iPads are assembled, Reuters reported.
The Taiwan-based contract manufacturer and Apple, its biggest customer, have in recent years come under fire for the working conditions Foxconn's million-strong Chinese labor force are subjected to, with complaints coming from labor rights organizations concerning safety issues, excessive overtime, dubious recruitment practices, and more.
"We've discovered that this [improving factory conditions] is not a cost. It is a competitive strength," Foxconn chief executive Terry Gou said, according to the news agency. "I believe Apple sees this as a competitive strength along with us, and so we will split the initial costs."
The CEO didn't say how much Foxconn and Apple planned to spend on factory improvements nor how much of the cost burden either company would take in that effort.
Gou was speaking at the groundbreaking ceremony for Foxconn's new China headquarters in Shanghai, Reuters reported.
In late March, Foxconn pledged to implement suggestions for improving labor conditions made by the Fair Labor Association (FLA), which audited Foxconn's facilities in Chengdu and Shenzhen at the behest of Apple earlier this year.
Among the problems identified by the FLA were unsafe working conditions and excessively long workdays for the assembly line workers who put together Apple's market-leading smartphones and tablets. The association's report also said Foxconn was clamping down on union organizing at its plants.
Foxconn has already initiated pay increases for its Chinese workers, including a wage hike of between 16 and 25 percent in February, while promising Apple it would hire more workers to cut down on the overtime hours being put in by its current workforce.
"Foxconn has participated fully and openly in this review of Apple-focused business groups at our Longhua and Guanlan campuses in Shenzhen and our campus in Chengdu and this process is part of our long-standing commitment to working together with our customers to ensure that our employees are treated fairly and their rights are fully protected," Foxconn said when the FLA report was issued.
Despite promises made by Foxconn and Apple to improve working conditions, some labor groups remain unconvinced that much is being done to change things.One of the companies' most strident critics, Students & Scholars Against Corporate Misbehaviour (SACOM), has criticized the FLA report for supposedly omitting details about harsh management practices and work stress, and glossing over intern abuse.
SACOM's influential May 2011 report on conditions at Foxconn's Chinese factories highlighted long hours for little pay, exposure to dust and harmful chemicals, and "military style" training sessions.
With additional reporting by Chloe Albanesius.
For more from Damon, follow him on Twitter @dpoeter.
