Reports

June, 20 2012 |  Download PDF |  Share

VTech Sweatshop in China: AT&T, Motorola, Wal-Mart and others endorse the China model

 

"Dongguan is about as well-known as Foxconn in Shenzhen...Plenty of workers live worse lives than those who work at Foxconn."

"If things continue to go like this, there will be more jumpers."

 

 

Preface

2.8 Million Jobs Lost
as U.S. Trade Deficit with China Reaches $295.5 billion!

By Charles Kernaghan

“China is also shifting its exports toward higher-technology products like telecommunications gear and power plant turbines.  So an expansion in Chinese exports could also displace sizable numbers of workers in the United States, Europe and Japan who produce goods similar to those from China.”
                                                      The New York Times
                                                      June 1, 2012, Keith Bradsher

 

The U.S. trade deficit with China reached $295.46 billion in 2011, costing of 2.8 million jobs in the United States.  In May 2012, Chinese exports to the U.S. soared by 23% from a year earlier.

According to the U.S. Bureau of Labor Statistics, no phones have been manufactured in the United States since 2008.

In fact, China has become the world’s largest manufacturer and exporter of telephones, including cell phones, cordless and corded phones, and telecommunications apparatus.  In 2010, China exported $29.7 billion worth of phones, up 35.8 percent since 2009.

In the U.S., there are still approximately 28,760 workers involved in manufacturing communications equipment.  The hourly mean wage for these U.S. telecommunications workers is $16.85 an hour and $134.80 for an eight-hour day.  These wages are 15 ½ times higher than the wages at VTech in China.  The Chinese workers earn just 6 ½ percent of what U.S. workers earn.  The wage differential is even more pronounced when you include benefits in the U.S.

This report is about the lives of VTech employees in China, who toil under cruel, inhumane and illegal sweatshop conditions, stripped of any democratic or union rights, and with no way out of the jail of repression they are in.

This report on VTech is also a story about the race to the bottom and the hollowing out of U.S. manufacturing jobs, as massive sweatshop operations like VTech in China become the largest suppliers of cordless phones in the world.  VTech is also the leading manufacturer of corded and cordless phones in North America, controlling over 50 percent of sales.  Founded in 1976, VTech now has over $1.785 billion in revenues and operates in 75 countries across the world.

 

The “AT&T Answering System with 2 cordless handsets” was “Made in China” by sweatshop workers forced to work 12 to 15 hours a day for $1.09 an hour at the VTech factory.  The AT&T phone retails for $59.95 at Wal-Mart, the world’s largest retailer.

 


Executive Summary

VTech

  • VTech in China has licensing agreements with AT&T and Motorola.  VTech is the world’s largest manufacturer of cordless phones and is the leading supplier of corded and cordless phones in North America.  VTech is an exclusive supplier for Deutsche Telekom and Telstra in Australia.  VTech also produces infants’ and children’s electronic learning products and is a major original equipment manufacturer for Sony and Philips.
  • VTech telephones are sold in the U.S. at Wal-Mart, Target, Staples, Sears and other retailers.   
  • In fiscal year 2012, VTech’s revenues reached $1.785 billion.

Thirty thousand workers at VTech’s three plants in Guangdong, China are held under deplorable and illegal sweatshop conditions.

  • Workers told us:  “The company treats us the way a slave driver treats his slaves,” and “security guards often beat the workers.
  • Another worker explained, “Sometimes I want to die.  I work like hell every day for such a dull life.  I want to find a reason to live.  Given that living is so tiring, seeking death might not be a silly thing!”
  • Many young workers at VTech have leapt to their deaths rather than continue with the cruel and nasty treatment.  “If things continue to go like this, there will be more jumpers.
  • Mandatory 12 to 15-hour shifts, from 7:30 a.m. to 7:30 or 10:30 p.m., six days a week.  Workers are at the factory 74 to 77 hours a week, while working 68 to 71 hours, including 28 to 31 hours of obligatory overtime. 
  • Workers are forced to stand all day.  It is exhausting, and their feet swell up.
  • Every 11.25 seconds a circuit board moves down the assembly line, and each worker must plug in four to five pieces — one operation every 2.25 to 2.8 seconds.  The workers do this all day, all week, all month and all year.
  • Workers who fail to meet their mandatory production goals are forced to remain working, without pay, until the goal is set.
  • Workers earn a below-subsistence wage of just $1.09 an hour.  One worker told us:  “I’m afraid I’ll never make a decent living in my life.”
  • Eight workers are housed in each primitive dorm room, sleeping on narrow plywood bunk beds.  Workers report, “It’s filthy, like living in a pigsty.”  The workers use small plastic buckets to fetch water to take a sponge-bath.  Summer temperatures exceed 90 degrees Fahrenheit, leaving the workers dripping in their own sweat all night.
  • The food is awful,” workers told us.  Pictures smuggled out of the factory cafeteria show the “coarse yellow rice” and rotten potatoes served to the workers.
  • VTech workers are cheated in broad daylight of millions of dollars in social security benefits due them under China’s laws.
  • Management illegally traps the workers.  Conditions are so miserable that 80 percent of VTech employees try to flee the factory each year.  But if a worker leaves, they will have to forfeit a full month’s wages, including all the grueling mandatory overtime hours.
  • Workers handle a lot of thinners, used to clean the circuit boards, but have no knowledge as to whether or not the substances they are handling are toxic and could harm them.
  • Phones are no longer manufactured in the United States.
  • In 2011, the U.S. trade deficit with China soared to $295.5 billion.  At least 2.8 million jobs have been lost in the U.S. due to China’s unfair trade practices since 2001.
  • In the last 12 months, ending May 31, 2012, China’s exports to the U.S. have skyrocketed by 23 percent!

At VTech, workers stand 12 to 15 hours a day, racing to meet excessive production goals as they make phones for AT&T, Motorola, Wal-Mart and VTech Electronic learning tablets for kids, including “V.Reader” and “Storio” for Europe.
AT&T and VTech phones manufactured in China and sold at Wal-Mart.

 

Download the full report in PDF