U.S.-Owned High Tech Jabil Factory in China Runs Like Minimum Security Prison Producing for Whirlpool, GE, HP
How the Research was Done
Private researchers from a sophisticated investigatory company in China carried out the research at the Jabil Circuit (Guangzhou) Limited Factory. The National Labor Committee supplied them with questions and overall guidance, which included considerable follow-up. Worker interviews were carried out both inside and outside the factory compound. Along with internal company documents, the private investigators were able to provide cell phone photographs taken on the shop floor, as well as in the workers' dorms and cafeteria.
In their summary remarks, the team of investigators noted that the Jabil factory has a lot of money and influence in the Guangzhou region. Jabil's focus is exclusively on meeting and raising production goals. The 6,000 or so employees at Jabil must bend to whatever management wants.
TABLE OF CONTENTS
A Social Hurricane is Forming in China
By a respected Chinese worker rights activist and scholar,
who must remain anonymous
On the surface, companies like Jabil look clean and high tech. It seems well-run. But people looking in from the outside do not realize that the workers at Jabil are not treated like human beings. The workers must obey all demands from the factory and have absolutely no right to express disagreement. The workers are seen as components of a machine. During the entirety of their 12-hour shift, they are stripped of their humanity. They are not allowed to have their own personalities, feelings, desires or needs-even using the bathroom. For every second of every minute, they are controlled and ruled over by a prison-like management system.
In general, living conditions for the Chinese people have not fundamentally improved. Statistics published by scholars and even by the government show that unfairness and inequality in Chinese society is getting worse. The relationship between management and labor is becoming more and more unbalanced. Conflicts between workers and management are becoming more frequent and more intense.
This means that if the current model of production in China does not significantly change, the workers will not be able to take it any longer, and social stability will take a major blow. We have reached the point where China's old policies must change. China must allow workers to form independent unions and must begin to respect international human and worker rights standards, including the international labor conventions. Oppressing workers who are fighting for their rights is not only making the antagonistic relationships between workers and corporations much worse, it is also setting the workers up in an antagonistic relationship with the government. I feel that a social hurricane is forming in China.
Another Hi-Tech Sweatshop in China:
U.S.- owned Jabil Circuit Factory runs like a Minimum Security Prison
Producing for Whirlpool, GE, HP, Nokia and others
- Six thousand workers, operating around the clock, with two 12-hour shifts, seven days a week. Workers are at the factory 84 hours a week.
- Workers are prohibited from sitting down and must stand for their entire 12-hour shift. Their necks, shoulders, arms and legs become stiff and sore, and their feet swell.
- Workers are allowed to use the bathroom just once in the regular eight-hour shift. As there are just three "toilet passes" per line, women say they have to wait over an hour to relieve themselves.
- Workers paid a base wage of 76 cents an hour through April, when they received a 17 cent increase to 93 cents an hour. No one can survive on the base wage and all are forced to work overtime.
- Security guards and managers patrol the shop floor as if they are police overseeing their prisoners. Workers who make a mistake are forced to write a "letter of repentance" begging forgiveness-which they must read aloud in front of all their co-workers. Offending workers can also be made to stay after work, unpaid, to clean toilets.
- Six workers share each crowded dorm room, sleeping on double-level bunk beds. Seventy-five percent of the workers say the factory food is "awful."
- Jabil has 18 factories across China, which is more than they have in the U.S.
- What happened to all the promises U.S. companies made-that if they could set up operations in China, by their very example they would lift standards and increase respect for human, women's and worker rights? Instead, U.S. companies have bought into the China factory model of exploitation, low wages, grueling hours and no rights.
There are signs that China's workers have had enough, and more are beginning to fight back.
128 Juncheng Street
|The Jabil factory|
Jabil Circuit, just one of 18 high tech Jabil factories across China, is housed in the Eastern District of Guanzhou's economic development zone.
The Jabil Circuit factory in Guangzhou has an estimated 6,000 or more workers. The factory, which produces circuit boards, is organized by clients and broken into work cells with separate assembly lines. The work cells are run as semi-autonomous businesses.
Whirlpool consistently accounts for the highest amount of production at the Jabil Circuit factory. Other major clients include GE, HP, Emerson and Nokia. Cisco, Xerox, Siemens, Intel, Lucent, Philips, Cannon, Samsung and a handful of other companies' products are currently manufactured at Jabil Circuit.
In its recruitment efforts, Jabil targets women and men, 18 to 35 years of age, who are in good health and have at least a middle school education, which is the equivalent of completing the 9th grade in U.S. schools. Jabil's advertisements highlight that, "The company hands out milk and fruit each week."
Jabil Circuit Inc., headquartered in Florida, is the parent company.
Jabil Circuit Inc.
10560 Dr. Martin Luther King Jr. Street North
St. Petersburg, Florida 33716
Phone: (727) 577-9749
Fax: (727) 579-8529
President & CEO: Timothy Main
Worldwide, Jabil's largest customers include Hewlett-Packard, IBM, Cisco Systems and Nokia.
In fiscal year 2009, Jabil reported 11.7 billion in net revenues. Worldwide, Jabil has 61,000 employees.
Jabil Circuit is an S&P 500 company dedicated to the manufacture of printed circuit boards.
Jabil owns and operates 18 factories in China. In the United States, Jabil has 13 factories, including Jabil Defense and Aerospace Services. At least three of Jabil's U.S. operations appear to be financial services. There are three Jabil Circuit factories in the United Kingdom and, oddly enough, seven Jabil facilities in the tiny British Virgin Islands. Among other countries, Jabil also has three holding companies in the Cayman Islands. (Full list of Jabil facilities attached at the end of this report.)
|Signs of companies whose products are made in the Jabil factory|
But Fails to Raise Human and Worker Rights Standards
The Jabil Circuit factory in Guangzhou is just one of a total of 18 plants Jabil has across China. Jabil has more factories in China than it does in the United States or any other country.
With its 18 factories across China, Jabil is certainly in a strong position to at least moderately improve human and worker rights conditions for their Chinese workers. But this has failed to happen. Jabil operates its large Guangzhou plant like a minimum security prison. Jabil's employees have no voice, no rights, no respect, and are basically appendages to the machines they toil on.
It was not so long ago, during the debate on extending Permanent Normalized Trade Relations to China, that U.S. multinationals were telling the American people that if they could set up operations in China, their very presence would lift human and worker rights standards across China. The companies would accomplish this by the example of how they ran their factories. U.S. corporations actually claimed that they would do the heavy lifting and would be the best ambassadors to promote the rights of Chinese workers.
Too often words are cheap. The reality is that too many U.S.-owned companies, like Jabil, are run like a prison within a prison. The larger prison is China's police state, while the factories-exporting to the U.S.-are run like minimum security jails.
|Workers being screened|
Jabil Circuit has 18 factories in China
Source: Jabil Circuit Inc. 2009 SEC filings, FORM 10-K
The Jabil factory in Guangzhou has been booming for months, working around the clock, 24 hours a day, with two 12-hour shifts, seven days a week to meet production demands. Many workers are at the factory 84 hours a week.
At least 90 percent of Jabil's assembly line workers are prohibited from sitting and are forced to stand for the entire 12-hour shift. Standing all day, with their shoulders hunched over and necks constantly bent downward, the workers' hands and fingers race furiously to insert components into the circuit boards as they speed down the assembly line. Standing all day, the workers report that their arms and legs become sore and stiff. Their feet swell and they suffer from blisters and peeling skin. Sometimes their necks hurt so badly they fear that they may be permanently damaging their vertebrae.
At the end of the 12-hour shift, their legs and arms are so stiff that at first they have trouble walking or moving their arms.
The workers repeat the same motions, all day every day. Everyone agrees that their work is mind-numbing and boring, while at the same time they have to race to keep up with the assembly line.
Standing for the 12-hour shift is exhausting, grueling and difficult to bear, and the long hours leave the workers disoriented and dazed.
|Jabil workers on the job|
Workers say the following incident is common. A young woman on the Whirlpool assembly line was recently singled out and cursed by the line manager:
"Damn it. You're always so slow. When are you going to work harder? You want money, but you're not willing to work. What are you even doing here?
The workers know exactly what is going on, but they are powerless to oppose it. Management consciously abuses and berates those workers-especially young women-who are shy and would never think of arguing back. By publicly abusing these women in front of their co-workers, management is able to assert their authority before all the workers. "The goal," one employee explained, "is to belittle the workers, keep them afraid, and make sure they jump to their work."
Everyone learns that to stay working, they have no choice but to lower their heads and take these abuses from the managers. They must swallow their anger. No one dares argue with the managers, knowing that if they did, the managers will make their lives even more miserable.
|Jabil workers at their stations|
Workers on the production line have to monitor each others' work, checking that the previous worker did not make a mistake. To test the workers, management sometimes purposefully slips in poorly-done products and sends them down the assembly line to see if the workers pick up the defects. If they fail to pick out the defective parts, or if they make a mistake in their own work, the workers can be scolded, given a "written warning," forced to write a "letter of repentance," forced to work unpaid for one or two hours to correct and redo their mistakes, or they can be ordered-again unpaid-to remain to sweep and clean the factory or bathrooms. There are also fines and demerits, and workers can even be punished for having a "bad attitude."
Receiving a "written warning" means the worker cannot receive an advancement or wage increase for the next six months.
A "letter of repentance" is meant to humiliate the "offending" worker, who must acknowledge their production error, beg forgiveness and pledge that they will work better in the future. The morning after the offense, in front of their entire production line, the guilty worker must read aloud her "letter of repentance." Workers report that such "letters of repentance" are common, at least once or twice a week per assembly line.
A group of workers overheard a quality control manager crying over the phone to a friend:
"On the production line, I can't take my eyes off the circuit boards. I'm so afraid of there being flawed products and being dragged off the line and scolded by my manager. At the end of the day, we are just falling apart. They force me to write letters of repentance. I don't want to do this job. Every time I request a transfer to another workstation, I get refused."
For the workers, it is even worse. They leave their shifts completely drained. One woman explained:
"My nerves are stretched every second of the shift and every ounce of my effort is spent on the products. When I get off work, my nerves feel like a rubber band stretched to the breaking point. I feel dazed. I have no energy and no interest in doing anything in the little personal time I have."
|More companies whose products are made at the Jabil factory|
Managers and security guards patrol the work areas carrying digital cameras. If they suspect a violation, they take a picture and issue a "warning letter." Pitting worker against worker, security guards have the power to advise the Human Resource department to fire certain workers.
Especially during the night shift, from 7:00 p.m. to 7:00 a.m., security guards patrol the work rooms. If they see someone who is lethargic or doing anything unrelated to their work, the guard notifies the Human Resource department. If a worker is "guilty"-for example-of nodding off for a few seconds, even if they have worked at the factory for years, they will be fired with no other compensation than the back wages owed them.
Workers who leave their workstations without permission are either given a "written warning" or they are marked absent and docked the entire day's wages.
There are also constant and arbitrary production line speed-ups.
"Jabil is all about advanced technology and cost-efficient manufacturing, but we also believe investing in our employees through development programs will allow them to reach their full potential. These projects explored empowerment, new methods and skills development."
--Jabil, 2009 Annual Report
The Jabil Circuit factory is almost always busy, but starting in April through June, Jabil is operating around the clock, 24 hours a day with two 12-hour shifts, seven days a week. This is certainly the case with Whirlpool, GE, HP, Emerson and Nokia, but it is true of many other lines as well.
|Workers heading to their stations|
Right now, none of the assembly lines in the plant have fixed days off each week, and some lines have gone for months without a single day off. Only occasionally will production line workers receive a day off. At other times, management may allow different groups of workers on the same line to alternate taking a day off.
Single day shifts are also very rare. Most lines are operating around the clock.
The day shift runs 12 hours, seven days a week. This schedule puts the young workers at the factory 84 hours a week, while actually toiling 77 hours. To avoid overcrowding, with the 6,000-plus Jabil employees, the beginning of the day shift is staggered five minutes apart, beginning at 6:35, with the last group beginning at 7:00 a.m.
(7:00 a.m. to 7:00 p.m.)
|7:00 a.m. to 11:00 a.m.||(Work, 4 hours)|
|11:00 a.m. to 11:30 a.m.||(Lunch, half hour)|
|11:30 a.m. to 5:00 p.m.||(Work, 5 ½ hours)|
|5:00 p.m. to 5:30 p.m.||(Supper, half hour)|
|5:30 p.m. to 7:00 p.m.||(Work, 1 ½ hours)|
This means the workers put in 11 hours of work each day -eight regular and three overtime hours-with just two 30-minute meal breaks. As the regular workweek is 40 hours, these workers are toiling 37 hours of overtime each week, which is in blatant violation of China's overtime restrictions, which limit overtime to no more than 36 hours a month. Jabil's day shift workers are exceeding China's legal overtime limit by a staggering 344 percent!
With the night shift, it is even worse, since the workers receive just one 30-minute meal break between 12:00 midnight and 12:30 a.m. This means the night shift is regularly working 80 ½ hours a week, including 40 ½ hours of overtime, which exceeds China's legal limit by 387 percent!
|Workers assembling products at their stations|
On the night shift, after the meal break ends at 12:30 a.m., management often plays loud music to prevent the workers from getting drowsy.
The very best the workers can hope for is that the press of orders slows down enough so that they can receive two Sundays off a month. But even this dream of receiving two days off a month puts the day shift workers at the factory an average of 78 hours a week, while working 71 ½ hours. This schedule also exceeds China's permissible overtime hours by 279 percent. On the nightshift, the hoped-for two nights off a month would put the workers at the factory an average of 78 hours a week, while working 74 ½ hours, including 34 ½ hours of overtime, which exceeds the legal limit by 315 percent.
In April, some Whirlpool production lines worked 84 hours a week, including 44 hours of overtime, exceeding China's legal limit on permissible overtime by 428 percent!
In January, February and March of 2010, Jabil workers reported working a minimum of 63 hours a week, with 68-plus hours a week being more the norm.
One woman in a Whirlpool line told the private investigators that from June through October 2009, she received just four days off in the five-month period. Three days were for national holidays, which the workers almost always receive off. In addition, she received one Sunday off in five months.
|Whirlpool circuit board|
This same woman received just three days off in November and two in December 2009.
Jabil management does not say as much, but for all practical purposes the workers know their overtime is obligatory. For example, if a worker tries to take a Saturday or Sunday off to take care of personal needs, they will be treated harshly by their managers. It is common that a worker who asks for a day off will receive a "written warning," which blocks the worker's chances for promotion or a wage increase over the next six months.
Managers also yell at workers asking for a day off.
"Who comes out here [to Guangzhou] to work and doesn't expect to be tired? When there is no overtime, you complain that you don't earn enough and that you want to work more overtime. Now that you work overtime, you complain that you are too tired! If you don't want to work overtime, then don't do it. Just work eight hours a day and forget Saturday and Sundays."
Another worker explained:
"We work 12 hours a day and are completely exhausted. The amount of overtime we work leaves us in a daze, but if we work just eight hours a day, then our wages are pathetically low."
Every worker at Jabil knows that they cannot possibly survive working just eight hours a day, since their base wage does not come even close to meeting their most basic subsistence needs.
The actual work shift is even longer than it appears. It is mandatory for workers to report at least 15 minutes before their official shift begins. First they have to change out of their street clothing and into their work uniforms, queue up to punch their timecards, and then attend a 10 to 15-minute meeting in which line managers give a pep talk on product quality and workplace discipline and vigilance. At the end of the shift, there is another 10 to 15-minute meeting to recap and evaluate the day's production and how to improve on it. This adds a half-hour each day to the workers' shift, which is unpaid. When they are working seven days a week, the unpaid, mandatory meetings add another 3 ½ hours to their already grueling shifts.
Even at the unpaid meetings, managers treat the workers in a rough and crude manner. One worker related the following:
"Today, after our shift, we were listening to the quality control manager talk. He caught me looking around and, in front of everyone, yelled at me, calling me a ‘rotten fish'!"
There is also one two-hour mandatory meeting each month, which is also unpaid. At the meeting, workers are allowed to talk, to discuss problems and suggest changes. But in the end, the workers say it amounts to nothing more than the managers pretending to listen to the workers, since nothing ever changes. For their part of the meeting, managers encourage the workers to work harder, and then make some announcements and updates.
|Emerson circuit board|
Imagine working 12 ½ hours a day, including the obligatory, unpaid meetings at the beginning and end of each shift, seven days a week, standing all day, while racing to meet mandatory production goals. One can only imagine how much these workers look forward to their two breaks.
|Workers quickly eating their lunches|
But the half hour breaks the workers are allowed for lunch and supper turn out to be no real breaks at all. It is really a mad dash, since the workers have just 30 minutes to go through a security check, queue up to punch their timecards, change from their work uniforms into street clothes, go to the bathroom, race to the cafeteria, queue up for food, eat, and then repeat the process in reverse-and do all this in just 30 minutes! Workers have so little time that they must gulp down their food as quickly as they can. Workers do not have enough time to eat the factory food they are paying for. The workers say that often they scald their mouths trying to quickly swallow the boiling hot noodles. On top of that, 75 percent of the workers surveyed said that the factory's food was "awful."
It is accurate to say that in their 12 ½ hour shift, the workers have no real breaks at all. It is no wonder that they are dazed and exhausted at the end of the shift.
"These regulations are not made by a human being."
-Whirlpool line worker
Workers must receive permission and be handed a "bathroom pass" in order to use the toilet. During working hours, they are allowed to use the toilet just one time in the regular eight-hour shift. And when they leave the assembly line, they must place a sign at their workstation saying "Gone from Work Station." Workers also have to sign themselves in and out in the attendance book which records each worker's comings and goings. Under no circumstances can workers be away from their stations for more than ten minutes.
|Jabil workers waiting to use the bathroom|
If they lose the bathroom pass, the worker is fined 50 RMB ($7.32), which is nearly a day's pay.
On each of the Whirlpool lines, which have 150 workers per line, there are only three bathroom passes.
There are times when workers must wait their turn for over an hour before finally receiving the pass to use the toilet. The women say it is especially miserable for them when they are having their period.
In addition, the women's bathroom is small and the women frequently have to line up to wait their turn for a free stall. Often they yell at each other to hurry up, as the ten-minute time limit is closing in on them.
Whirlpool has three assembly lines with a total of 450 workers, and during very busy periods, the number can rise to 500. Workers say the same boss oversees two production modules, Whirlpool and Ericson.
|Products ready to be shipped|
Jabil management classifies certain job categories as "special work stations," which merit a 50 RMB ($7.32) stipend a month. The "special work stations" usually involve welding, tin soldering, lubrication and cleaning. Worker turnover is very high in these jobs. There are many production lines in a single work room, with workers packed densely together. Smoke and vapors do drift across the work room. For example, the tin soldering work on circuit boards gives off a foul smelling odor.
Many workers complain of rashes and allergy-like skin problems on their faces. Workers handling ethanol also develop skin rashes.
However, following the Jabil management model, workers are prohibited from even asking about the chemicals they are handling and what may be causing their skin rashes.
When one worker dared ask his manager what might be causing the skin rashes, the manager shot back: "If you are not willing to follow orders, then get out of here and don't come back."
|Jabil factory workers at their stations|
On the basis of several random surveys carried out by our investigators, it appears that at least half-if not more-of the 6,000 workers at Jabil are hired as temps, or dispatch workers, as they are called in China. Jabil uses the temps to fill full-time positions, keeping them on for more than six months and often for over a year, or even several years. The problem here is that it is illegal under China's labor laws to employ temporary workers for more than six months. But, this does not stop management from pitting the illegal temps against the full-time workers, egging them on that if they work "harder" and "faster" they too can become full-time workers. The temps know this is just a ploy to get them to "kill themselves, working even harder." One temporary worker told our researchers that their only hope of gaining full-time status is "if we cower before our managers." That is the secret to success.
What Jabil is doing is completely illegal. China's contract law clearly stipulates that dispatch workers can only be hired on a temporary basis and cannot be used for periods of more than six months. If management keeps these workers at the plant for more than six months, they must be formally hired as full-time workers.
Jabil has arrangements with a large number of different dispatch agencies to supply temporary workers. These agencies include: Jainzhi, Guangzhou Talent, Lide, China Talent, Safen, Taisuosi, Qi Fang and Ruiqi.
Most temporary workers, especially males, must pay a placement fee to the employment agency of up to 500 RMB ($73.20) to be hired at Jabil. This is also illegal, as China's contract law clearly states that employment agencies cannot charge workers for placements.
What upsets the temporary workers most of all is that they are paid less than full-time workers to do the exact same jobs. Temporary workers start out with a slightly lower base wage than full time workers--$128 a month as of April 2010 as compared to $132 for full time workers. When they are forced to work overtime on weekends, temps receive an overtime premium of just 50 percent, while full-time workers receive a 100 percent premium, or double time . The temps do not receive a night shift differential, whereas permanent workers receive over $30 a month. Dispatch workers receive 41 cents a day food stipend, but full time employees receive $1.00. Dispatch workers must wait one and a quarter years before they qualify for a "comprehensive subsidy" of $34 to $37 a month, while full timers are paid a $51 a month "comprehensive subsidy" after just their first three months. Management does not contribute to the mandatory "housing fund" for the temps, but does so for the full time workers.
It may seem like the wage differences are not that great, but when the workers' base wage does not come even close to providing a minimal existence, workers have to fight for every cent legally due them.
The wage differential is also illegal. China's contract law states, "Dispatch workers are to receive compensation equal to that of a company's regular workers."
Both temps and full-time workers are instructed to just sign their contracts. Temps sign a contract with their employment agency and formal workers with Jabil, which is another violation of China's labor laws. The contract must be discussed with the worker and both parties must agree. For example, the contract law stipulates that an employee cannot be shifted to another work station unless it is discussed and the worker agrees.
As can be seen from the attached documents, it is standard practice at Jabil to illegally employ temporary workers for more than a year. Jabil is so sure of itself that it does not try to hide these practices.
- One temporary worker from the Jianzhi Employment agency, on the GE line, started working at Jabil on January 24, 2007. His pay stub for February 2008, printed in black and white, shows him at the factory for a little over a year.
|Temp worker's paystub on the GE line|
- A temp placed by the Guangzhou Employment agency to work on the Nokia line started on July 24, 2008 and his pay stub shows him still working at Jabil on July 23, 2009.
|Temp worker's paystub on the Nokia line|
- A temporary worker on the SMT & MI line, placed by the Reach agency, started on May 28, 2008 and her pay stub shows her still working as of October 23, 2009.
|Temp worker's paystub on the SMT & MI line|
- A temp hired by Guangzhou Talent agency and placed at Jabil, started working on the Adtram line on March 24, 2007. Nearly two years later, her pay stub shows her still working as of February 23, 2009.
|Temp worker's paystub on the Adtran line|
Once a dispatch worker is in the Jabil factory, management makes it hard for them to quit. Temporary workers wishing to leave have to get documents from Jabil, which they must take to their employment agency to be filled out. It is common for Jabil to drag out the permission process for three or more months. Even if the temporary worker is finally allowed to quit, he or she will have to wait until the following month to receive their back wages.
Jabil management boasts about the All China Federation of Trade Unions local which "represents" Jabil's workers. The only problem is that the international media recently exposed the All China Federation of Trade Unions (ACFTU) as a tool of the Chinese Government to suppress any hint of independent organizing. Officers and staff of the ACFTU recently participated in beating up striking Honda workers. Another problem is that it is almost impossible to find any workers at Jabil who know there is a "union" at the factory. Random surveys showed that over 90 percent of the workers interviewed had never heard of a union operating at Jabil, and the few who had, said it had no effect on either their job or their life. It "does nothing for anyone," one worker commented. At most, all the union does is to occasionally organize some parties or dances, but even here there is confusion as to whether it is the union or the company that is staging the parties.
The Jabil union did, however, have six union members help direct traffic in Guangzhou on the morning of September, 2009, as part of "Presenting Friendship ...to encourage the civilized development of our district."
It sounds like admirable work, but the "union" should consider educating its members on China's labor contract law, on the rights to temporary workers, on the limitations on overtime and other issues that might improve the lives and working conditions of the workers.
Notice about redirection. Translation of document:
Our company's Union Members Took Part in Volunteer Activities to Make our Area More Civilized
Responding to the call for Luogang District Union Volunteers, on the morning of September 4, the company union arranged for 6 union members to take part in the "Presenting Friendship" activity to encourage the civilized development of our district.
The activity involved guiding traffic along major streets and handing out safety documents and advising rule breakers.
This event expressed our company's union's huge support for the development of civilized behavior in this district. We express gratitude for our 6 volunteers' active participation. We wish that all workers contribute in their own way to making our city of Guangzhou more civilized.
As of October 12, 2009 and October 13, 2008, we had approximately 61,000 full-time employees. None of our domestic employees are represented by a labor union. In certain international locations, our employees are represented by labor unions and by work councils. We have never experienced a significant work stoppage or strike and we believe that our employee relations are good."
Source: Jabil Circuit Inc. 2009 SEC filings, FORM 10-K
|A typical dorm room that houses 6 workers|
Jabil has several dorm buildings, each with eight floors. The dorms do have elevators. Each floor houses 400 to 500 workers. Six workers share each room, measuring roughly 11 by 24 feet. The rooms appear narrow and crowded. Other than the bunk beds, the furniture consists of a small cabinet for the workers' clothing and a small table with two chairs. There are two ceiling fans, but no air conditioning. During the long summers, the dorms are very hot and humid and the fans provide little relief. The workers say they often have trouble sleeping due to the excessive heat and humidity.
There is a bathroom in each room with hot water for washing. There is also a hard line phone, which the workers can use if they have prepaid phone cards. Each dorm floor has two television rooms.
|A dorm bathroom|
On the bottom floor there are ten washing machines, which the workers can use free of charge.
By any normal standards, the dorm rooms are primitive.
Each worker pays 80 RMB ($11.71) a month for dorm fees, which are deducted from the wages.
Jabil strictly prohibits workers from entering dorms other than their own. For example, a worker cannot walk to a nearby dorm to visit a friend. If he or she is caught entering another dorm, they will be detained by the security guards. The offending worker can even be fired. Management claims their strict policy is to prevent theft.
The Jabil compound also has a library, exercise room, ping pong tables, badminton and a basketball court -though the workers bitterly comment that working 12 hours a day, seven days a week, they have little time to play games or read.
This is a huge issue. The workers feel they are no longer human, but rather just attachments to a machine. There is no way for these young workers to read or study, to experience new things, to grow and be excited about their lives.
|Inside the dorm building|
There are two cafeterias in the Jabil compound, the worst being the Hongjun cafeteria. Workers purchase their food using a magnetic meal card which they keep charged up. In several random surveys, 75 percent of the workers describe their food as "awful," while the other 25 percent said the food "wasn't too bad."
Typical cafeteria meals would include the following:
For breakfast, a small bowl of rice gruel is accompanied by another small bowl of pickled or salted cabbage. Breakfast also comes with a small steamed bun or a hard boiled egg. The cost for breakfast is 1.2 RMB (18 cents).
Lunch would typically include stir-fried radish, stir-fried peas, tofu with a small bowl of rice, and soup. Such a meal would cost 3.14 RMB (46 cents). You can judge how small the food portions are in comparison to the small spoon on the left hand side of the tray.
A typical supper could include stir-fried broad beans and pork with stir-fried cabbage, along with soup and rice. The soup may also contain a small piece of meat. A supper like this would cost 6 RMB (88 cents).
To save money, some workers choose to order cheaper supper dishes, which cost 3.14 RMB (46 cents) but include no meat.
Workers report spending an average of 323.30 RMB ($47.33) per month on factory cafeteria food. Workers typically spend an additional 200 RMB ($29.28) a month on snacks they purchase at convenience stores both inside and outside the Jabil compound. Their total monthly food costs average $76.61. It is not much money. On average, food costs are just $2.51 a day. However, when the workers add in their dorm costs of 80 RMB ($11.71) a month, the food and dorm costs total $88.32 a month. Again, it does not seem expensive until you compare it with the legal minimum wage of 900 RMB ($131.76), which was in effect through April 2010. Primitive dorm conditions and small portions of food described, at best, as not too bad-consumed 67 percent of the workers' base wages. Even with the wage increase in May, the new minimum wage is still just 1,100 ($161.04), which means that food and dorm costs still consume 55 percent of the workers' base earnings.
It is very easy to understand why these factory workers are completely dependent upon working excessive amounts of overtime. No one can possibly survive on the legal minimum wage.
U.S. Trade Deficit with China Keeps Growing
In 2009, the U.S. had a $226,877.2 billion trade deficit with China. For every $1.00 we exported to China, China exported $4.26 to the U.S. In just the first four months of 2010, the U.S. sustained an additional $71,016.2 billion trade deficit with China. In the month of April, on average, China exported $864 million dollars a day of goods to the U.S.
Regarding advanced technology goods, in 2009 the U.S. had a $72.5 billion hi-tech trade deficit with China. In just the first four months of 2010, the U.S. already has an additional $25 billion deficit with China in advance technology goods. At this rate, our trade deficit with China in hi-tech products could reach 100 billion.
--Source: U.S. Census Bureau, Foreign Trade Division
Data Dissemination Branch, Washington, D.C.
In May of 2010, the legal minimum wage in Guangzhou City was raised to 1,100 RMB ($161.04) per month. This represents a 17 cent-an-hour raise over the previous minimum wage, which was 900 RMB ($136.76). The exchange rate is 6.83045 RMB to $1.00 U.S.
|Previous Minimum Wage||New Minimum Wage|
|(900 RMB per month)||(1,100 RMB as of April 2010)|
|76 cents an hour
||93 cents an hour|
|mce_markernbsp; 6.06 a day (8 hours)||mce_markernbsp; 7.40 a day (8 hours)|
|$30.40 a week (40 hours)
||$37.16 a week (40 hours)|
|$131.76 a month||$161.04 a month|
|$1,581.12 a year||$1,932.48 a year|
As of this writing, we have not been able to review pay stubs reflecting the new minimum wage, as wages are paid one month late. May wages are not paid until between June 7th and 10th.
A random sampling of pay stubs before the April increase shows formal full-time Jabil employees earning an average wage of 1,600 RMB ($234.25) a month--$54.06 a week. Dispatch, or temporary, workers could earn an average of 1,300 to 1,400 RMB ($190.32 to $204.96) per month-or $43.92 to $47.30 a week.
The highest wage we saw for a full-time worker was an average of $1.27 an hour. For working a 57-hour week, including 17 hours of overtime, this worker earned $72.25. This worker was paid correctly for the minimum wage as well as for weekday and weekend overtime premiums. He also received six subsidies-middle shift subsidy, night shift subsidy, special work station subsidy, a food subsidy, profit sharing and the comprehensive bonus subsidy. He earned a gross wage of $340.95 a month, which after deductions for dorm expenses and the housing fund, left him with a net wage of $313.09 a month.
A typical dispatch worker could earn a gross wage of $56.37 for working a 63-hour week including 23 hours of overtime. His take-home wage, after deductions for dorm, food and the housing fund, was $48.12 for the 63-hour week, for an average of 76 cents an hour.
Jabil does meet all mandatory legal benefits, including pension, unemployment insurance, work injury insurance and the housing fund. Jabil also pays health insurance, which is not mandatory under China's labor laws. The factory also has a rudimentary clinic for minor illnesses, colds and fevers.
Every worker our investigators interviewed said they could not possibly survive without working significant, and often excessive, overtime hours. The base minimum wage does not come close to meeting even the most minimum subsistence level needs.
On Foxconn and Honda
Regarding the increase in the Foxconn workers' wages:
Of course, the wage increase was entirely due to the suicide workers' passive and nihilistic style of resistance (jumping off the buildings). But we feel that the low wages were not the sole cause of the surprising numbers of suicides. The main underlying cause of the Foxconn suicides was that the factory tried to turn its workers into robots and attempted to strip away their humanity. The workers are seen as components of a machine. The workers who jumped could not stand the inhumane treatment at the factory, and they were overcome with despair.
Workers at Foxconn are subjected every day to long-term levels of high-stress labor and extremely strict military-style discipline and management. They live in an environment without the most basic levels of human warmth or social interaction, and deal with heavy social pressure (for example, young men who can't marry without a certain amount of money) and family poverty. Moreover, the workers are provided with little space for personal development. All of these factors have contributed to the tragedy of the Foxconn suicides.
Workers are human beings and need to live like humans. Mere existence is not enough! Company owners need to understand that increasing wages is not enough. Workers need respect and happiness.
The owners of Foxconn have plundered an unlimited supply of wealth from their workers' bodies. Now, what they are offering back is a pathetic amount. While they are willing to give the workers a little money, they are not willing to allow the workers to have quality of life. As a result, the tragedy of Foxconn will not end.
The 30 percent plus increase in Foxconn workers' wages does not signify that Foxconn is treating the workers fairly. Putting aside the fact that relentless inflation in China diminishes this wage increase in real terms, it must be stated that it is not Foxconn's shareholders' sole place to determine workers' wages. Wages should be determined by the democratically elected leaders of an independent Foxconn workers' union in consultation and negotiation with the company management. Foxconn should respect the workers' right to organize and collectively bargain.
Regarding the strike at Honda, we feel that this is an event of historic proportions.
This strike is not a pure struggle over money, but also involves demands to reform the workers' union. It reflects the fact that the struggle of China's working class (made up of mostly migrant laborers) has developed to the stage where workers are demanding organization. We are closely monitoring the development and aftermath of this situation. The Honda strike has huge significance for China's workers. Many Chinese workers are closely following this strike.
Recently, over the last few months, the price of food and housing in China has shown a continuous rise. The government has published the increase in price index as 3%. We have trouble believing this number. Workers have seen a noticeable and constant drop in the value of their wages. For example, many workers frequent small fast food restaurants and stalls. In 2009, 5 RMB could buy a meal in a fast food restaurant. Now, you need at least 7 or 8 RMB for an equivalent meal.
Ownership is 100% except where designated
Celebit Technology Private Limited (India)
Celetronix India Private Limited (India)
Celetronix Mauritius Limited (Mauritius)
Celetronix USA, Inc. (USA)
Digitek Electronics Ltd. (Hong Kong)
GET Manufacturing USA, Inc. (USA)
Green Point Industrial Co., Ltd., (British Virgin Islands)
Green Point International Holding (Cayman) Co., Ltd. (Cayman Islands)
Green Point (Tianjin) Electronic Technology Co., Ltd. (China) (Jabil indirectly owns 71% of this entity)
Green Point (Wuxi) Electronic Technology Co., Ltd. (China) (Jabil indirectly owns 71% of this entity)
Green Point (Tianjin) Plastic Co., Ltd. (China)
Green Point Precision (Nanjing) Co., Ltd. (China)
Green Point Precision Components Co., Ltd. (Taiwan) (Jabil indirectly owns 71% of this entity)
Green Point (Tianjin) Precision Electronic Co., Ltd. (China)
Green Point (Yantai) Precision Electronic Co., Ltd. (China)
Green Point Precision [M] Sdn, Bhd. (Malaysia)
Green Point Technology (ShenZhen) Co., Ltd. (China)
Green Point (Suzhou) Technology Co., Ltd. (China)
Green Point Technology (Wuxi) Co., Ltd. (China)
Green Prosperity Co., Ltd. (British Virgin Islands) (Jabil indirectly owns 71% of this entity)
Jabil (Mauritius) Holdings Ltd. (Mauritius)
Jabil Assembly Poland sp. z.o.o. (Poland)
Jabil (BVI) II Ltd. (British Virgin Islands)
Jabil C.M. S.r.l. (Italy)
Jabil Circuit, LLC (USA)
Jabil Circuit, SAS (France)
Jabil Circuit (Beijing) Co. Ltd. (China)
Jabil Circuit (BVI) Inc. (British Virgin Islands)
Jabil Circuit (Guangzhou) Ltd. (China)
Jabil Circuit (Shenzhen) Co. Ltd. (China)
Jabil Circuit (Shanghai) Co. Ltd. (China)
Jabil Circuit (Singapore) Pte. Ltd. (Singapore)
Jabil Circuit (Suzhou) Ltd. (China)
Jabil Circuit (Wuxi) Co. Ltd. (China)
Jabil Circuit Austria GmbH (Austria)
Jabil Circuit Automotive, SAS (France)
Jabil Circuit Belgium N.V. (Belgium)
Jabil Circuit Bermuda Ltd. (Bermuda)
Jabil Circuit Cayman L.P. (Cayman Islands)
Jabil Circuit Chihuahua, LLC (USA)
Jabil Circuit China Limited (Hong Kong)
Jabil Circuit China Manufacturing Ltd. (Guernsey)
Jabil Circuit de Chihuahua, S de RL de C.V. (Mexico)
Jabil Circuit de Mexico, S de RL de C.V. (Mexico)
Jabil Circuit Financial, Inc. (USA)
Jabil Circuit Financial II, Inc. (USA)
Jabil Circuit French Holdings, SAS (France)
Jabil Circuit GmbH (Germany)
Jabil Circuit Guadalajara, LLC (USA)
Jabil Circuit Guangzhou Holding (BVI) Inc. (British Virgin Islands)
Jabil Circuit Holdings GmbH (Germany)
Jabil Circuit Holdings Ltd (United Kingdom)
Jabil Circuit Hong Kong Limited (Hong Kong)
Jabil Circuit Hungary Contract Manufacturing Services Ltd. (Hungary)
Jabil Circuit India Private Limited (India)
Jabil Circuit Investment (China) Co., Ltd (China)
Jabil Circuit Italia, S.r.l. (Italy)
Jabil Circuit Limited (United Kingdom)
Jabil Circuit Luxembourg II, S.a.r.l. (Luxembourg)
Jabil Circuit Luxembourg, S.a.r.l. (Luxembourg)
Jabil Circuit Netherlands B.V. (Netherlands)
Jabil Circuit of Michigan, Inc. (USA)
Jabil Circuit of Texas, LP (USA)
Jabil Circuit Poland sp z o.o. (Poland)
Jabil Circuit Real Estate GmbH (Germany)
Jabil Circuit Reynosa, LLC (USA)
Jabil Circuit de Reynosa S de RL de C.V. (Mexico)
Jabil Circuit Sdn. Bhd. (Malaysia)
Jabil Circuit Services Ltd. (Hong Kong)
Jabil Circuit Technology LLC (Cayman Islands)
Jabil Circuit Technology India Pvt. Ltd. (India)
Jabil Circuit U.K., Limited (United Kingdom)
Jabil Circuit Ukraine Limited (Ukraine)
Jabil Defense and Aerospace Services LLC (USA)
Jabil do Brasil Industria Eletroeletronica Ltda. (Brazil)
Jabil Global Services de Mexico, S.A. de C.V. (Mexico)
Jabil Global Services, Ltd. (Ireland)
Jabil Global Services, Inc. (USA)
Jabil Global Services Netherlands B.V. (Netherlands)
Jabil Global Services Poland sp z.o.o. (Poland)
Jabil Hungary LP Services, LLC
Jabil Industrial do Brasil Ltda (Brazil)
Jabil Japan, Inc. (Japan)
Jabil Luxembourg Manufacturing S.a.r.l (Luxembourg)
Jabil MPC, LLC (USA)
Jabil Netherlands B.V. (Netherlands)
Jabil Real Estate Ukraine LLC (Ukraine)
Jabil Sdn Bhd (Panyu) Ltd. (Malaysia)
Jabil Texas Holdings, LLC (USA)
Jabil Turkey Electric Electronic Trade, LLC (Turkey)
Jabil Vietnam Company Limited (Vietnam)
Jabil, LLC (Russian Federation)
JP Danshui Holding (BVI) Inc. (BVI)
Mobicom Ventures (BVI), Inc. (British Virgin Islands)
Sypro Optics GmbH (Germany)
Taiwan Green Point Enterprises Co., Ltd (Taiwan)
Taiwan Green Point Enterprises Co., Ltd., (British Virgin Islands)
Universal (Tianjin) Mold & Plastic Co., Ltd. (China)
Westing Green (Tianjin) Plastic Co., Ltd (China)
|Report design:||Kenneth Carlisle|
|Cover design:||Aaron Hudson|
Additional research was carried out by NLC interns: