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Jabil sends managers to China factory to check worker conditions cited in labor rights report

A workers rights group that 14 years ago outed celebrity Kathie Lee Gifford for allowing her clothing line to be made in Central American sweatshops is now targeting St. Petersburg electronics manufacturer Jabil Circuit for worker abuse at one of its many factories in China.

The allegations by the National Labor Committee appear in a 30-page report. It claims that at Jabil's Guangzhou factory, 6,000 employees are pitted against many illegal temporary workers, stand for 12-hour shifts with few bathroom breaks, live in six-person dorm rooms, are paid below subsistence wages and are controlled so closely by private security that it resembles a minimum-security prison.

The plant, one of 18 Jabil operates in China, makes high-tech products for such clients as Whirlpool, HP, IBM, Intel and Cisco, the report says.

I sent Jabil a copy of the report on Tuesday, the first time the company was aware of its existence. Jabil issued a short statement the same day calling the report heavy on accusations and light on accuracy. But the company promised to offer more details Wednesday once the company communicated with its China factory 12 time zones away.

By Wednesday morning, Jabil CEO Tim Main and a senior team had reviewed the NLC report and discussed specifics with the Guangzhou plant. Though some references in the report left Jabil execs fuming — notably one saying "management's philosophy is to break the workers" — Jabil says it takes the message of the overall report seriously.

Jabil already has dispatched Mark Matthes, senior vice president of global operations, and T.P. Yuen, senior vice president of human resources, Asia, to the Guangzhou factory to look firsthand at concerns described in the report.

"We really do want to do the best for our employees. If there are corrective actions that need taking, they will happen swiftly," said Jabil spokeswoman Beth Walters.

The NLC's focus on lesser-known Jabil is unusual since the workers rights group tends to target overseas working conditions at companies highly recognizable to the public such as Wal-Mart, Dillard's, Microsoft, Honda and Toyota. At the least, the NLC report offers an unvarnished and rare look at a piece of the far-flung manufacturing empire of Jabil, a low-profile company that also happens to be one of Tampa Bay's largest and most successful.

A little perspective.

High-tech factories in China are in the news lately because of a burst of 13 worker suicides at one factory in Shenzen run by a Taiwan-based company called Foxconn, which makes Apple's iPad, iPhones and iPods, among other leading consumer brand products. The chief issue seems to be low wages, which Foxconn partially addressed with a recent increase. Analysts say many Chinese factories now face wage pressures.

The report critical of Jabil was written by labor rights veteran and NLC chief Charles Kernaghan. But it is based on firsthand information supplied by Chinese workers rights activists who, the Pittsburgh-based NLC says, must remain anonymous or face punishment in state-controlled China.

That inability to confront its accusers by name riles Jabil and troubles Western sensibilities of fairness. But global labor activists insist protecting such sources is the only way to get a genuine look inside factories, away from state control and retribution in places like China.

In 2002-2003, St. Petersburg Times business reporter Kris Hundley visited a different and older (now closed) Jabil plant in Panyu, China. She found the worker conditions tough — workers who became pregnant or injured feared for their jobs — but not dissimilar from other Chinese factories at the time. Hundley even visited the same Foxconn factory now infamous for worker suicides. Touring the plant back then with labor activists and without official supervision, she talked to young women workers who were pleased to have found factory work, able to save some money and had plans to better themselves.

If there is unrest and wage pressure in China factories now, it is in part related to the global economic slowdown that limits the ability of the labor force to work overtime — which is really the only way to earn above-subsistence wages. Jabil's Walters agrees, noting that it is typical for workers to leave one factory job for another if there is not enough overtime available. The workers in Jabil's Guangzhou factory earn 93 cents an hour.

In an interview, NLC's Kernaghan argued Jabil is a U.S. company while Foxconn is not. That difference, he says, should make Jabil more accountable to improve worker conditions in China — and elsewhere. Jabil employs about 85,000 people across 20-plus countries in the Americas, Europe and Asia.

The NLC report follows by one week Jabil's jubilant earnings report, a performance that defies the global recession. As Jabil CEO Main then commented: "Growth is accelerating, and we now expect fiscal 2010 to be a record year for Jabil in terms of revenue and earnings."

One gripe at Guangzhou already has been addressed. When surveyed in September by Jabil, factory workers complained about the cafeteria food. The company has since switched vendors and the satisfaction rate on recent surveys improved to 84 percent.

Other fixes may not be quite as easy. But at least Jabil is not rejecting the bulk of NLC concerns outright.

Contact Robert Trigaux at

Read the report on Jabil here

Jabil sends managers to China factory to check worker conditions cited in labor rights report 06/30/10 [Last modified: Wednesday, June 30, 2010 10:20pm]
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