Microsoft Investigating Chinese Factory's Work Conditions

What do Kathie Lee Gifford and Steve Ballmer have in common? According to a new report, abusive working conditions in factories in the developing world that produce the companies' name brand products.

Caught off guard by accusations that its mice and other hardware products are being produced under prison-like conditions, Microsoft said it has officials on their way to China to see for themselves if the allegations are true.

The allegations regarding a Microsoft (NASDAQ: MSFT) overseas manufacturing contractor surfaced in a report issued this week by the not-for-profit National Labor Committee, a global labor watchdog.

The NLC is perhaps best known for helping to blow the whistle in 1996on sweatshop labor used to make Kathie Lee Gifford's line of clothing.

This latest NLC report said KYE, a Microsoft contract manufacturer in Dongguan, China, works teenaged employees as many as 15 hours a day and six to seven days a week, putting them up in squalid dorms and paying as little as $0.52 an hour after deductions for factory food that must be consumed basically on the run.

Microsoft's Vendor Code of Conduct clearly states that contractors must pay "living wages under humane conditions."

The report has apparently gotten Microsoft's attention.

"As a result of this report, we have a team of independent auditors en route to the facility to conduct a complete and thorough investigation. If we find that the factory is not adhering to our standards, we will take appropriate action," Brian Tobey, corporate vice president for manufacturing and operations in Microsoft's Entertainment and Devices Division, said in a blog post Thursday.

The NLC's report characterizes KYE's working conditions as "monotonous, numbing and exhausting."

"Twenty or 30 workers on a line must complete 2,000 Microsoft mice in 12 hours. The workers' hands and fingers are constantly moving, many suffering abrasions and cuts, since the connectors must be inserted very closely together. Once workers meet the production goal, management raises it," the NLC report said.

Turnover is high, with few workers lasting two years. But many work the hours for six months or more, suffering indignities such as no bathroom breaks during a shift, and public scoldings for dropping parts on the floor, in order to save for marriage or to help support their families, according to the report.

The NLC is alleging that KYE hires mostly women and that sexual harassment is common, while workers, although often in the range of 16 to 18 years old, can be as young as 14 or 15, both practices that are banned in Microsoft's contracts.

For its part, Microsoft claims that it hires independent auditors to annually inspect factories where its products are made to keep them up to international labor guidelines.

"In addition, Microsoft personnel conduct quarterly on-site assessments, and ... no incidence of child labor has been detected. Worker overtime has been significantly reduced, and worker compensation is in line with the Electronic Industry Citizenship Coalition standards for the Dongguan area," Tobey said.

"We will have monitors on site pending the results of the inspection. We will take all appropriate steps to ensure the fair treatment of the KYE workers," he added.

Microsoft has run into noncompliance issues in China more than once recently, including one incident when a third-party Chinese contractor allegedly stole copyrighted program code to incorporate into a Microsoft product.

Stuart J. Johnston is a contributing writer at InternetNews.com, the news service of Internet.com, the network for technology professionals.




Tags: Microsoft, China, offshoring, mice, Ballmer


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