China –A question of ethics? But whose?
06 December 2007
Chinese manufacturing has once again found itself in the spotlight with many people asking even more questions about the true price of Asian imports. Andrew Ferrier is Commercial Manager of Components Bureau, celebrating its 21st year of successfully doing business with China, so what light can he shed on the current situation?
Old style cowboy films had the right idea; there were good guys and bad guys and everyone knew where they were. If you were wearing a black hat, chances were you wouldn't get to see the credits roll, but a white one, congratulations and collect your bonus at wrap time! At first glance it seemed that the 'Summer of Manufacturing Recall Scandals From China' could be looked at in exactly the same simplistic way. Good guys toy-makers, who quickly stop toys that could potentially harm children; Bad guys Chinese manufacturers who didn't care how they made the toys. But wait; is that the sound of galloping hooves? Look! A wounded scout with a message from the head of the Good Guys: "Mattel takes full responsibility for those recalls. I would like to apologise to you, the Chinese people, and all of the customers who received toys that have been manufactured." A design fault was to blame for the magnets coming loose and causing the potential hazard. So, change the colour of your hats please gentlemen?
A report published by Associated Press quoted Peter Navarro, a business Professor at the University of California suggesting that the apology was made because: "Mattel is worried that the Chinese government is going to make it difficult for them to produce, put their costs up and hurt their stock price." And there's the rub, continues Andrew Ferrier, gloriously bareheaded on this occasion: "Over 80% of all toys sold in the United States are made in China and it is the Asian country's lower manufacturing and employment costs that help boost the profits of huge multi-nationals, and it's the same in Europe and the UK.
A major high-street chain recently had a DVD player on sale for under £10, and British consumers rushed to buy them, presumably so they could have a dvd player in each room of their house. Where do you think that was manufactured?" Should we then, as goods-hungry western consumers accept our part in this increasingly complex equation? "Put simply, yes, we do have our part to play, but there are no definitive good guys or bad guys. People are quick to point the finger at cheap and exploitative labour, but I'd be happy for any reader to ask any worker at our factories in Hong-Kong and China about their working life. Whenever I've been in the factories, there's a good atmosphere. The factories provide guaranteed work and a steady income which is particularly attractive for women who are valued and often paid a premium due to their dexterity and production rate. The women in turn are trained and earn a guaranteed income in air-conditioned and safe, well-equipped premises which after a few years enables them to accrue a big enough nest egg to marry and have children. Across manufacturing in broad terms that means one third of the workforce has to be replaced due to this practice, so who is using who? I'm not suggesting for a minute that every worker leaps out of bed with a smile on their face and a spring in their step but compare that to what they have left behind; isn't it a step in the right direction?"
The really dark danger starts, Ferrier suggests, when a large manufacturing contract is put on the table: "Some of the less scrupulous companies will wave an order for $1million dollars in the face of a supplier, all the while knowing that the pressure on them to achieve such low cost product and manufacturing is nigh-on impossible without cutting back on costs somewhere, but they turn a blind eye to how it's achieved. The supplier sees a huge contract on the table, thinks that if he doesn't accept it, it may go to Vietnam or Korea and will look at where costs can be cut. It's totally irresponsible and virtually invites exploitation. Why would anyone get involved, I really don't know because it's always going to backfire horribly." Job lot of unused hats anyone?
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