Haunted Empire: Apple After Steve Jobs

by Yukari Iwatani Kane

  To Christensen, Apple had two choices. It could open up its operating system and license the technology, which would fuel more innovation and expand Apple’s presence in the industry at a greater degree than it could on its own. Or it could come up with another disruptive product category that would forestall it from having to face the Innovator’s Dilemma. “The salvation for Apple,” he said, “may be that they can find a sequence of exciting new products whose proprietary architecture is demanded by the marketplace.”

  Publicly, Tim Cook was committed. “Our North Star is to make the best product,” Cook said time and time again. “Our objective isn’t to make this design for this kind of price point or make this design for this arbitrary schedule or line up other things or have X number of phones. It’s to build the best.”

  Now he needed to prove it.

  12

  Boundless Oceans, Vast Skies

  As dusk descended on an early summer evening in May 2012, a river of workers streamed out of Foxconn’s factories in Longhua at the end of their day shift. Outside the North Gate, a small market lay in wait to entice them into parting with some of the money they had just worked so hard to earn. Food stalls, open from 4 a.m. to midnight, sold noodles, honey cakes, and slices of watermelon and cantaloupe. Stores across the street displayed clothing, cell phones, even lingerie. At Pepsi Smile, the local fast-food restaurant, two dollars bought a drink, french fries, and a fried chicken sandwich.

  Soon the streets filled with people. Virtually everyone was a factory worker at Foxconn. The neighborhood, known as East Qinhu Village, was the only refuge where employees could easily relax and enjoy themselves for a few hours. The nearest big city, Shenzhen, was more than ten miles away, but to reach it, one had to transfer several times on the bus. The air was lively as couples strolled by holding hands and groups of friends gathered by the stalls for a bite to eat. Many of them had changed out of their factory uniforms and were wearing T-shirts, shorts, and skirts to stay cool on a warm and humid evening.

  By city standards, Longhua was in the middle of nowhere, but for many of the workers who had migrated from the countryside, the area was more urban than anything they had ever known, with its tall apartment buildings, neon store lights, and gigantic factory grounds. The fresh-faced men and women looked vulnerable. The vast majority were under twenty-five. The youngest were sixteen, the legal working age in China. Like Sun Danyong, who had also worked there, many were away from their families and living on their own for the first time. They laughed and chattered like any high school or college students their age.

  As the sky grew darker, more young men and women materialized from every direction, dressed in Foxconn’s standard polo shirts and dark pants. Foxconn’s factories operated around the clock with waves of workers entering and leaving through the gates every few hours. The latest crew was reporting for the evening shift. Among them was a pretty young woman with shoulder-length hair and braces on her teeth.

  Though she still could pass for a teenager, Ai Qi was twenty-three years old. Having worked at Longhua for five years, she was already an old hand at Foxconn. As she joined the flood of bodies flowing toward the North Gate, she wondered how much longer she could endure this life. Bracing herself for the tedious hours ahead, she sang the opening to a song. An old pop song, from when she was a little girl.

  Today I saw snow drifting through the cold night

  With the cold, my heart and mind drift off to faraway places

  Trying to catch up in the wind and rain, in the fog you can’t tell the shadows apart

  The first lines were sad, but then she reached the chorus.

  Boundless oceans, vast skies

  Would you and I change?

  She sang softly, under her breath. She sang to remember herself, to feel free even as she disappeared inside the machine.

  Four months after the New York Times accused Apple of exploiting Foxconn’s cheap labor, environmental improvements were being made, but life remained as dreary as ever for the factory workers. They woke up, they went to work, they performed the same task repeatedly, and they went home. If anything, many of them felt worse off than before.

  The biggest sore point for workers was the restriction on overtime. The issues around pay and excessive work hours were immensely complex. Though Foxconn had pledged to develop a compensation package that prevented workers from losing income from reduced overtime, workers still felt shortchanged because they were making less money than they could have if they had been able to work more hours. Adjusted for inflation, the pay increase that they received to offset the reduced overtime was not as high as it sounded. As Foxconn prospered, the cost of living in Longhua rose. In just two years, the rent for many apartments had more than quintupled.

  The workers were at Foxconn to earn as much money as they could; it was their best chance to improve their station in life. Work-life balance might be necessary, but it meant less without financial stability.

  Discipline continued to be an issue. On some teams, workers who made mistakes or were late to work were still required to present a self-criticism during meetings. They were no longer openly fined as they used to be, but their pay was sometimes cut. A Hong Kong labor activist group called Students and Scholars Against Corporate Misbehaviour, which regularly interviewed workers, also reported incidents of supervisors humiliating workers and forcing them to write confession letters and copy CEO Terry Gou’s quotations. One worker reported that a manager at Foxconn had called him stupid. “The pigs,” the manager told him, “can only give birth to the brainless.”

  The reality was that the workers’ plight was born out of powerful, elemental forces beyond the two companies’ control.

  China was in the throes of massive economic and industrial change. According to the government, 262.6 million citizens, or about 20 percent of its population, had migrated from the countryside to the cities by the end of 2012 to seek better lives. They found themselves caught between the old communist system and their more capitalistic ambitions.

  “What is happening now isn’t just unique to China . . . but we may go through much more severe pains than other countries,” said Ma Ai, a sociology professor at the China University of Political Sciences and Law. He cited three reasons: the culture’s historical emphasis on the collective interest over that of the individual, the people’s reliance on relationships over law, and the extreme gap between the rich and the poor. Apple and Foxconn played a major role in China’s industrial revolution, but fundamental change would take time.

  The alienation that the workers felt was a predictable reaction to such a tectonic cultural shift.

  No one understood the futility better than Ai Qi.

  When Ai reached the factory gates every day, she passed the big trucks waiting to be admitted onto the grounds and punched in her identification card at the employee entrance. After entering her building, Ai punched in her ID again at the check-in area to her workroom. Uniformed guards eyed the workers at each checkpoint. Sometimes they asked to see the contents of bags. Workers were allowed to bring their cell phones, but there had been a time in 2007 when Foxconn had banned phones and portable media players to prevent workers from photographing the products they were making.

  Her primary means of communication, Ai carried her phone with her everywhere.

  When Ai first joined Foxconn, she was assigned to be a line worker. But within a month, she was sent to a department that made the original molds that were duplicated and used in the factory lines to produce the casings for cell phones, computers, and other products. The job required a greater ability than just assembling products, so the pay was better. The initial work was done by hand using a combination of liquid and solid materials, and usually finished with machines. The workroom was covered in dust. Workers were given dark blue, long-sleeve jumpsuits and masks, but their eyes and hands were unprotected. Of the four women in the department, only two, including Ai, made molds because the other two were afraid that some of the
chemicals might cause infertility. The work required concentration, but there was no formal training. Everyone in the department had to learn on the job. When the difficult work became discouraging, Ai gave herself a pep talk.

  “You can do this,” she told herself. “Just take it one step at a time.”

  To encourage herself, she looked at a sophisticated mold she’d already completed. If she could make that mold, she reminded herself, she could certainly manage the one she was now holding.

  Occasionally, though, the frustration and exhaustion overwhelmed Ai so much that she would smash the mold she was working on. It had taken her a full year before she gained confidence, and even then the stress could leave her shaking and speechless.

  Though Foxconn kept production lines for each of its customers separate to protect their trade secrets, her department worked for all of them. On any given day, Ai and her coworkers might work on a mold for a part of a computer, cell phone, monitor, or a printer casing for any one of Foxconn’s many customers. Nokia, Motorola, Acer, Dell, Apple . . . the list went on. Most of the time, they didn’t even know which customer the molds they were making were for because the product casings were so similar.

  The exception was Apple. Ai and the others knew when they were working on Apple’s products because they were told so, and the material they used would be of higher quality. More stressed than usual, their team leaders would ask that they be extra careful with their work. The slightest error such as making an angle too round or too sharp or causing a tiny nick in the material was unacceptable. Molds had to be polished until the workers could see their reflection. When Ai was assigned to work on the mold for the Apple logo on the back of the iPhone, it took more than a day to get it right and get the steel-plated mold smooth and shiny enough.

  With only one break during her eight- to ten-hour shifts, Ai would be exhausted by the end of her day. As she left her workroom, she’d pass by signs with sayings such as “Prevent crises before they emerge” and “Ducks can make noises, only eagles know how to solve a problem.”

  For a long time, Ai had felt like she was barely hanging on.

  Ai had grown up in a rural village in eastern China, the third of four children. Her family was better off than many others in the area—her father owned a small store—but she had an unhappy upbringing. Her parents fought often, and her grandmother and aunt bullied her mother. Believing that her mother favored her younger sister, Ai left home even before she finished junior high school. She had figured she could save enough money to go back to school.

  Her hopes were crushed almost immediately. One of her first jobs was as an operator for an express delivery service in Beijing. She worked seven days a week for six hundred yuan a month, about eighty dollars. When she joined Foxconn, things seemed to look up. Her salary was unchanged, and she occasionally had to borrow money from her friends to survive, but she had more days off. That feeling wore off quickly.

  Ai had spent one miserable year living in one of Foxconn’s dorms. Unlike a Western school dorm, there was no process for matching up roommates, so she had shared a room with eight to ten other women with whom she had little in common. Some of them would usually be trying to sleep while others were getting up to go to work. She found the room to be dirty, and there was no personal space. Conflicts abounded. Ai shared a bathroom with ten toilets and showers with more than sixty women. She had to stand in line just to take care of her basic needs. There was a community television on each floor, but most of the time the set was broken.

  Since then, Foxconn had built newer dorms, where only four to six workers shared a room. But it was competitive to get into one of them, and Ai had grown tired of being among so many people all the time. When Foxconn increased her pay, she rented an apartment. For five hundred yuan a month, she had a living room, bedroom, kitchen, and bathroom all to herself. It was an extravagance to not have a roommate, but the apartment was her sanctuary.

  Her home was like a window into her past, present, and future ambitions. Her most prized possession was a laptop computer, made by a Chinese brand Tongfang. A couple of years before, she had scrimped and saved to buy it for 4,700 yuan ($740). She had haggled with the electronics store manager for four hours to convince him to give her a 700-yuan discount. Her full-size bed was the first piece of furniture she had bought for 80 yuan ($12). The pale yellow bookshelf-and-desk unit across from it displayed a photo of her mother. Even though Ai had left home because of her, Ai adored her mother. She had raised Ai, her two sisters, and her brother single-handedly while her father worked. Once Ai was settled at Foxconn, she had invited her mother to come live with her, but her mother was uncomfortable in big cities, and she had to care for her grandsons. Instead, Ai sent her family money whenever she could.

  For years Ai had harbored an ambition to become an interior designer. She loved to draw, and this love was reflected in the many pictures that hung on her walls. Next to her desk was one of her proudest works. She had copied an online comic strip of a parable to which she had instantly related. The story compared a man’s life to walking on a seesaw from the low end to the high end. Every step that he took threw him increasingly off balance. And as soon as he was close to reaching the higher end, he found himself declining as his weight shifted the balance. The lesson Ai took was that you could try to reach your highest ambitions, but what might make you happiest and most stable was to find the point of balance. The caveat that gave her hope was that it was possible to stay standing at the higher end of the seesaw called life if you were supported at the other end by your friends and family.

  In another corner of her room, she had hung a trio of drawings of electric guitars. Each was accompanied by lyrics from the Hong Kong rock band Beyond, who sang many songs about poverty, racism, and other social issues around the world. The band’s uplifting message was particularly popular among young Chinese migrant workers. In one of the drawings, she had merged the title of one song with a line from another. “Time flies silently. The unyielding spirit will live with me until the end.”

  For her, the lines served as a reminder.

  “As long as I choose the road for myself, I won’t regret it even if I lose everything,” she explained. “I would just start all over again.”

  Her words were heavy with meaning. She had put up these pictures in 2010, a low point in her life. She had never been happy at Foxconn, but she grew profoundly depressed that year. Life at the factory was wearing her down. She felt like her managers worked her “like a dog” and blamed her and her colleagues for anything that went wrong. The scoldings she received when she couldn’t finish a task on time became unbearable.

  To make matters worse, she had given up a big portion of her life savings to help her brother build a new house in preparation for his marriage. She had sent the money willingly, but her diminished savings was still a blow. She had harbored ambitions of going to university one day. The money was supposed to pay for that education and all the hopes she pinned to a degree. Foxconn offered educational assistance for technical programs and junior colleges, but she wasn’t interested in programs that could help her do her job better. She wanted to study sociology.

  For a while she felt like she was going nowhere. She had textbooks on her bookshelf to help her prepare for the university entrance exam one day, but her supervisor had warned her that she would lose her job if she was distracted by her studies.

  She knew she would never make enough money at Foxconn to feel financially stable, but without a high school or college diploma it would be difficult to find another job that paid as well. She would lose her seniority and have to start from the bottom again.

  She also felt unattractive and lonely. Her hands were ruined by her work, and her coworkers teased her about her teeth, which at the time were still crooked. They told her that her smile made her ugly. Even worse, she had discovered that a young man she’d been dating in the city of Shenzhen was two-timing her with a serious girlfriend.

  “I knew my
love would never be returned,” she explained. “So I stepped out of the relationship. I cannot be immoral.”

  Ai received no support from her family and no understanding. Her mother wanted her to move back home and marry someone in the village. She kept trying to fix her daughter up with men Ai had never met. When one of these would-be suitors called her, Ai listened to him distractedly, letting him talk as she surfed the Web on her laptop.

  The emptiness was crushing. Every day was the same. She woke up, put on her uniform, walked through the North Gate, and lost herself working through another day of routine, repetition, and endless pressure from her bosses. At the end of her shift, she filed back through the gate and out into the city, returning to her apartment to sleep alone.

  What was the point of it all?

  Foxconn did what it could to make its workers’ daily lives seem more like a community. The Longhua campus encompassed dormitories, canteens, a fire brigade, hospital, and an Olympic-sized swimming pool. A company town included restaurants, ATMs, a grocery store, and an Internet café.

  A free weekly newsletter called “Foxconn People” updated workers on the community’s goings-on and reflected the family-like image that Foxconn was trying to convey. A June 2012 issue included a front-page story about a sports meet that Foxconn had held. In an adaptation of a similar event that is held in Chinese schools, about three thousand workers from three Foxconn facilities competed against each other in track and field contests such as running and jumping for a chance at winning some of the 80,000 yuan ($12,600) in prizes that the company handed out that day. “The three-day games not only offered a chance for the athletes but was also a visual spectacle for Foxconn’s sports fans,” the write-up said.

  Other articles included a piece that lauded Foxconn’s first disabled hire, a twenty-two-year-old known as “Tiny Girl” who was hired at a job fair. The girl, who split her time between photocopying and storekeeping at the company’s Chengdu plant in Southwest China, stood at just four feet, three inches tall since a childhood accident caused a problem in her spine. “I sent my resume to other companies, but I stopped by Foxconn’s booth because I thought the interviewers looked very kind,” the article quoted her saying. The newsletter took pains to note that she was being paid the same as other employees and that Foxconn had given her two different jobs “to reduce her boredom and let her make more friends.”