Apple CEO Tim Cook visits the Foxconn plant in China as part of the review process to insure working conditions have improved and Apple vendor requirements are being adhered to (Click Image To Enlarge)
When Apple makes headlines for its manufacturing practices, it’s rarely a headline that makes Cupertino look good. The company has come under fire in the past year for its reliance on the manufacturing giant Foxconn, which had a string of suicides at one of its plants, and where there have occasionally been reports of unsafe working conditions. The New York Times, for instance, wrote an investigative report into the “human costs” of the iPad back in January; iPhone manufacture even became the unlikely subject of a controversial, and ultimately discredited, work of quasi-reported theater (see “Mike Daisey, Storyteller,” and “An (Actual!) Look Inside Foxconn”). But for those who thought Apple would continue to exclusively rely on manufacturing abroad, Apple CEO made a surprising announcement on “Rock Center with Brian Williams” today. Starting in 2013, said Cook, a line of Macs would be manufactured in the US. Cook did not elaborate or specify just which line.
The announcement followed recent reports that some of the new iMacs that went on sale last Friday bore the unusual words, “Assembled in USA.” In the past, it has been more typical to see “Assembled in China”–though not uncommon for certain products, like made-to-order Macs.
In a way, Cook’s announcement is not totally surprising; at the All Things D conference in May, he had announced that he wanted a product to be made in the U.S. It would seem like the recent “assembled in USA” lines are a step in that direction, and that Cook is planning to deepen that commitment.
A good deal more information about Cook’s thinking in this regard can be found in Bloomberg Businessweek, which published alengthy interview with Cook this week. Cook pointed out (as he did to Brian Williams) that both the processor and the glass on iPhones and iPads are made in the U.S. (See “Your iPhone’s Brain Might Be from Texas.”) And he clarified that when he says he’d like to “make” Macs in the US, he’s talking about more than assembly:
“It will happen in 2013. We’re really proud of it. We could have quickly maybe done just assembly, but it’s broader because we wanted to do something more substantial. So we’ll literally invest over $100 million. This doesn’t mean that Apple will do it ourselves, but we’ll be working with people, and we’ll be investing our money.”
A follow-up question on whether Apple had a duty to be patriotic elicited a thoughtful response: Cook said that he felt Apple did have a “responsibility to create jobs.” He appeared to outline a philosophy that suggested that Apple had that responsibility, indeed, wherever it sold its products:
“Over 60 percent of our sales are outside the United States. So we have a responsibility to others as well.”
He chooses a more hollistic way of measuring job creation, which means that he considers a person who makes a living as an iOS developer to have had a job created by Apple, even if that person is working for herself. (Again in its iEconomy series, the Times has shown how making that living is sometimes easier said than done.) The Businessweek interview is required reading in full for anyone interested in Tim Cook, Apple, and the future of American manufacturing.
Meanwhile, Bloomberg alsoreportsthat Foxconn itself will be expanding some of its manufacturing operations into North America, due to demand among customers that more products be made domestically.
COMMENTARY: It will be a very long time before I trust anything that Apple says concerning its manufacturing vendors in China. For over a decade, under the steady iron hand of then Chief Operating Officer Tim Cook, Apple did everythig to keep the identity of its overseas vendors in China absolutely secret. Nobody knew who they were until word got out of the numerous plant worker suicides at Foxconn International, the sweatshop conditions endured by its plant workers, and unsafe working environment that hundreds of thousands of Foxconn plant workers were exposed to. Foxconn is Apple's largest outsourced manufacturer in China, and is responsible for assembling the iPhone, iPod and iPad. In 2010,when the late Steve Jobs was questioned by Walt Mossberg and Kara Swisherabout from All Things Digital about Foxconn in front of a live audence at a D8 conference in San Francisco, he said,
"Oh, sure, yeah. We're pretty on top of that. Foxconn is not a sweatshop. When you go to this place, um. It's a factory, but my gosh, they got restuarants, and movie theaters and swimming pools. For a factory, it's a pretty nice factory."
What pissed me off about the Steve Jobs interview is how Jobs discounted the Foxconn suicides, comparing them on a percentage basis to the suicide rates in the U.S. Jesus, what a heartless punkass. I didn't hear a single comment of remorse or condolesences to the loved ones and families of those who committed suicide. His comments were without any emotion, almost unremorseless. That interview is below:
In a blog post dated November 16, 2012, I reported that Foxconn International had plans to replace 1.2 million plant workers in China with production robots. This process has already begun, with 30,000 robots expected to be installed by the end of 2012, and another 200,000 robots to be installed in 2013. Having said this, it would not surprise me if Apple automates the prouction of an iMac using robots in order to keep costs down. If Tim Cook is serious about proucting an iMac in the U.S., I wonder if Apple will be a job creator, or job destroyer.
Not complacent at a billion users, Facebook is parachuting into markets all over the globe. But overseas growth that once seemed to come so easily is slower now.
In just eight years, Facebook signed up more than half the world's Internet population.
Now it's going after the rest.
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Facebook wants to reach every single person on the Internet whether they are logging on from a laptop in Santa Monica, an iPhone in Tokyo or a low-tech phone with a tiny screen in Nairobi.
It's parachuting into market after market to take on homegrown social networks by currying favor with the locals and venturing where many people have spotty — if any — access to the Internet.
In Japan, it lets users list their blood types, which the Japanese believe — like astrological signs in the Western world — give insight into personality and temperament. In Africa, Facebook markets a stripped-down, text-only version of its service that works on low-tech mobile phones.
Sitting below flags from around the world, growth team member George Lee, left, speaks with Vishu Gupta at Facebook's Menlo Park headquarters. The company is pushing its global reach. (David Butow, LA Times) - October 31, 2012 (Click Image To Enlarge)
International growth is crucial to maintain its dominance as the world's largest social network. The company's scorching pace of growth has cooled especially in the United States. Facebook must coax users to sign up — and make sure it remains popular with the users it already has — or risk being knocked from its lofty perch.
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Chris Cox, Facebook's vice president of product says.
"We're not a company that is just trying to add more people. What we are trying to do is build a service that everyone in the world can use."
But overseas growth that once seemed to come so easily is slower now. Facebook has already saturated most major markets around the globe. Eight out of 10 Facebook users are outside of the U.S.
Wedbush Securities analyst Michael Pachter said.
"I don't think that Facebook has a chance of attracting another billion users."
Inside Facebook's Menlo Park, Calif., headquarters is a small army out to prove naysayers wrong. Above their desks they have hung flags from around the world that represent their nationalities. They obsessively scan screens that track user growth around the world.
They cheered and popped open champagne in September when the number of active Facebook users crossed 1 billion. But the moment of jubilation quickly passed as they redoubled their efforts to spread Facebook around the globe.
Naomi Gleit is the soft-spoken, headstrong 29-year-old product manager in charge of growth at Facebook. She says Facebook's future is on mobile devices, the medium by which most people will experience the Web in coming years. Facebook now works on more than 2,500 different phones, helping it gain a foothold in emerging markets. And it is forging relationships with mobile phone operators around the world.
Naomi Gleit is director of product for user growth and engagement at Facebook, where she manages programs like internationalization intended to break adoption barriers, as well as the data-driven optimization of flows like registration, new user experience, and friend finding. She graduated from Stanford University with a degree in science, technology and society.(Click Image To Enlarge)
Gleit's 150-member team has boots on the ground in far-flung places armed with low-tech phones and cheap data plans. Even team members here carry Nokia phones alongside their iPhones to update their status or check their News Feed.
Gleit said.
"We originally built a product for ourselves. This is different. Now we need to understand the experience of users who are not like us."
Analysts say Facebook already has established an impressive track record of uprooting entrenched competitors.
In Britain, it displaced the dominant social network Bebo, forcing AOL to sell it at a huge loss.
In Germany, Facebook overtook the homegrown StudiVZ.
Facebook even broke Google social network Orkut's stranglehold on Brazil andIndia.
In 2009, it launched a clever tool to help Facebook users find their Orkut friends on Facebook and instantly send them friend requests. Two years later it swiped Google's top executive in Latin America, Alexandre Hohagen. Facebook sprinted ahead of Orkut one year ago, and now has 61 million active users in Latin America's largest country.
Facebook is treating India as a test lab for how it can spread in other emerging markets such as Indonesia. Facebook, which has offices in Hyderabad, India, has grown from 8 million users in 2010 to 65 million users today. It is aggressively targeting India's youth. A few hundred young Indian programmers recently jammed a Facebook hackathon at a Bangalore convention center to chug chai and brainstorm new apps that would appeal to their friends.
But Facebook has its eyes on a much bigger prize beyond the country's 100 million Internet users: the 900 million-plus Indians on mobile phones. Some analysts predict India will have more Facebook users than any other country including the United States by 2015.
The company also faces significant challenges in India.
It must make the service captivating on low-tech mobile phones with unreliable Internet connections.
It must gingerly navigate demands from the Indian government to remove objectionable content without alienating users.
Facebook is making some of its biggest moves in Russia, South Korea and Japan, the only major markets where it operates but has penetration of less than 50%, according to research firm ComScore.In October, Facebook Chief Executive Mark Zuckerberg traveled to Russia, Europe's largest Internet market, to meet with Prime Minister Dmitri Medvedev. Facebook also cut a deal with one of Russia's mobile phone operators, Beeline, to provide a free Facebook application to subscribers.
Prime Minister Dmitri A. Medvedev, left, met with Mark Zuckerberg, chief of Facebook, at Mr. Medvedev's Gorki residence outside Moscow (Click Image To Enlarge)
And Facebook is making headway in South Korea, where it's battling local social network Cyworld for the time and attention of people there.
In Japan, Facebook has pulled off its biggest coup. Even as Facebook took hold in other parts of Asia, it grew slowly in Japan, where people aren't as comfortable sharing personal information — even their real names — on the Internet. Local social networks such as Mixi allow — and sometimes encourage — the use of pseudonyms. The earthquake and tsunami in 2011 changed a lot of minds about the value of using real names on the Web as Facebook became an important tool to reunite families and disseminate reliable information in the disaster's aftermath.
As of September, Facebook had amassed 18 million users in Japan at the expense of local social networks and Twitter. Facebook Chief Operating Officer Sheryl Sandberg touted the social network's growth in September when she traveled to Japan to target the country's massive advertising market.
Facebook's toughest challenge by far is that it's cut off from a third of the world's population. The Chinese government, which censors most major U.S. social media websites, has blocked Facebook since 2009. It's a major blind spot for a company intent on global domination. China's more than half a billion Internet users spend a huge chunk of their days on Chinese social media sites.
Zuckerberg has said he would like to find a way to enter China, but even with the recent leadership change there — ushering in the Chinese Communist Party's first new chief in the social media era — most analysts say it's unlikely.
Many investors are far more interested in how Facebook plans to cash in on the users it already has than how it plans to sign up more of them, especially in poorer parts of the world where it will be much harder for Facebook to make money.
Pivotal Research analyst Brian Wieser said.
"Does getting to 2 billion users matter? The answer is no."
Gleit says growth isn't just a numbers game. Her team focuses on building products that encourage users to be more active on Facebook and spend more time there. Last year Gleit took the lead on a popular feature that lets users subscribe to News Feeds without having to become Facebook friends.
Those kinds of efforts are crucial especially in markets where Facebook's growth has slowed just as the company comes under intense pressure from Wall Street to ramp up its advertising business.
Gleit said.
"I have this deep faith in the power of the vision and in the impact we can have. We still haven't achieved anything near what I think we can."
COMMENTARY: Mark Zuckerberg is obsessed with connecting the entire world so that users can engage and share content anywhere on the planet, 24/7, 365. My main criticism of Facebook is just how big can you become before you are so bloated that the user experience is negatively impacted. My other criticism is advertising. Facebook is aggressively expanding its advertising products including paid ads within a users news feed and promoted posts for brands willing to pay for the privilege. Invasion of privacy continues to be a huge issue with many users, and Facebook's excursions into every facit of our private lives really destroys the Facebook user experience even further. It is no secret that employers and insurance companies are now using Facebook to screen prospective workers and patients and spy on the social media activities of existing employees. The U.S. government, through the Department of Homeland Security, FBI and CIA, now use the information in social networks to track terrorists and criminals, but the Patriot Act provides just too much leeway into how much these agencies can invade our private lives.
Facebook believes that it can add another 1 billion users to its user database, but I have a feeling that it will be unable to meet that goal unless China opens its doors to the social giant, and I don't think it is going to do this, in order to protect its Chinese social networks. If you are curious as to the number of users and penetration rates for Facebook users by country below is checkfacebook's Facebook Map of the World:
Site’s worldwide expansion buzz at an all-time high, but local social networks in Russia still hold on to their lead
Facebook may be the world’s largest social network, with a user base predicted to top 837 million in 2012, according to eMarketer estimates, but the social giant isn’t the leader everywhere; it still trails local incumbents in several emerging markets, including Russia.
According to data from comScore, in October 2011, Facebook was the fourth most popular social network in Russia, reaching just over 20% of internet users in the country. It trailed three domestic sites: VKontakte (VT), Odnoklassniki.ru and Mail.ru (My World).
In addition to dominating Russia in total reach, the top two native social networks dwarfed Facebook by more than 10 to one in average time spent per user.
eMarketer forecasts the number of Facebook users in Russia will increase 62% in 2012, whereas overall social network user growth in the country is only predicted to rise 11.1%. The figures suggest that local social networks will not be able to hold onto their dominance much longer. The real question may not be whether Facebook will overtake local social networks there, but when.
For more information on social network user behavior and trends outside the US, watch for a forthcoming eMarketer report on worldwide social network usage.
COMMENTARY: I took the opportunity to look into the top 3 Russian social networks: Vkontake, Odnoklassniki and My [email protected]. Vkontakte is the big cahuna in Russia, but the key reason they are so hot over there is because they are a platform for spam and 40% of its users are students and younger Millennials. But what really sets Vkontakte apart from Facebook is that it offers a file-sharing system that allows users to easily find pirated movies (dubbed in Russian), and illegally download music for free. Does that sound familiar? Apparently, the latter is enough to keep its users from switching to other social networks.
Vkontakte
Vkontakte is the social network created by Pavel Durov in 2006. They state they have more than 150 millions of users from all around the world (83 millions just from Russia and Ucraina), but just 28 millions are active every day. The main reason between this big divide is the usage of Vkontakte as a platform for spam, which forces users to be really suspicious: we must consider this crucial aspect when we want to plan a the brand presence on this social network. It’s also curious to notice how it’s relatively easy to access to all the names an profiles, displayed in chronological order based on subscription, completely ignoring any sort of privacy.
Another element we should consider is the massive presence of teenagers, a segment with low buying power; despite Vkontakte vice-president Ilya Perekopskyi stated that more than 60% of users are over 25 and not students, it’s quite hard to believe so by using the platform on daily basis (to know more read this). And our idea is confirmed by an analysis of the brands that can actually show some successful case histories on this social network. As an example we can mention Clearasil, a brand of anti-acne body detergent owned by Reckitt Benckiser.
Clearasil created a Vkontakte app that allowed users to create videos based on the product benefits. Everything was aimed to make the user-generate-content go viral inside the platform, aided by some others collateral micro-campaigns and online and offline PR. The impressive results (more than 13,000 contents created and a total reach of half a million people) caused sales to go up by 30% compared to 2009. To have a more precise idea of the results, here is the campaign report on Vimeo.
In a country like Russia, where the average time spent on Social Media is double the American one, how can we explain the success of Vkontakte over Facebook?
The answer is pretty easy: VK, apart from being the first comer in the tight national market, offers a file-sharing system that allows users to easily find pirated movies (dubbed in Russian), and illegally download music for free. For many people this is apparently enough to decide to not switch from VK to FB, but it’s also a characteristic we should think of when we decide our target for a brand campaign.
When Facebook arrived in Russia, VK lost a relatively small amount of users (less than 6 millions users according to Ogilvy). But these users were more open towards the brand communication (mainly to emphasize their social status) and they were representing ahigher cultural level compared the average Vkontakte users.
Anyways, it’s interesting to notice the effort Vkontakte put into an evolution towards a professional standards: they adopted some anti-spam policies and in April of 2011 they introduced the possibility to open Brand pages, and to launch video advertising campaigns.
In fact, like in many countries in the world, online videos are a crucial tool to increase the awareness of a brand; let’s just take a look at this viral campaign to launch in the Russian market a set of sea salts to cleaned the nose, called Aqua Maris. An agency called Novocortex created the “World Championships of Nose Cleansing”, together with a number of fictional characters and fake-websites, generating big buzz around this pretty funny hoax. This made the campaign bounce on several blogs and newspapers, both in Russia and abroad.
And this clearly shows how the Russian audience is reactive and easy to involve, when contents are well structured (to know more, read here).
Odnoklassniki
This social network has less registered users than Vkontakte: 43 millions between Russia and Ukraine. But it showed an big increase, after VK decided to re-establish the invitation-only subscription, another anti-spam move. This way Odnoklassniki was able to win the Kazakistan, which was owned by the competitor just months before. It’s also very popular in Kyrgyzstan, and it’s the n.2 most visited website in Armenia.
The main usage of this platform (which used to be a paid service) is to get back in touch with old friends and classmates, and it’s not really considered by brands, that usually choose alternative social networks like VK or FB.
Odnoklassniki is part of the Mail.ru group, the biggest Internet corporation in Russia: they also own [email protected] and a 33% share of di Vkontakte, and two huge instant messaging platforms (ICQ and Mail.ru Agent, with more than 80 million registered email accounts). Even though they basically share the same ownership, it’s curious to notice there have been fight between different social networks: as an example, Pavel Durov (the VK founder) defined Mail.ru “a tasteless warehouse of viruses”, blocking links directing to Mail.ru on Vkontakte.
This network, born in 2007, counts almost 4 million users amongst Russia and Ukraine, most of them teenager and kids according to Ogilvy. The main goal of the platform is to incentivate the creation of connection between young users, offering several platforms to communicate between users. This makes it one of the most relevant network in the Russian panorama.
“My World” members can send private messages, give and get gifts, share their desires, publish pics and videos, listen to music and manage personal blogs. But the most important thing to the young audience is the possibility to know what their friends are doing in real time.
For quite a while I've predicted that Facebook would encounter problems gaining traction in Russia. Looks like I am right. I'm not sold that Facebook's user base in Russia will increase by 62%. That's just too optimistic. Maybe 30% is more like it. A big maybe.
If you look at the average number of minutes Russians spend on the top 3 Russian social networks with the time they spend on Facebook, you get the feeling that Facebook has not fully sold Rooskieland. Will Zuck break some rules allowing pirated movies and music files? I say he does, cause he has no real values. He also said about the Chinese, that maybe Facebook should become political and adopt to local Chinese custom. Translation: allow Chinese censorship. China turned down Facebook, but Zuck is not quitting. He's scheduled to make another try later this year. He needs China to get to 1 billion users.
Courtesy of an article dated February 27, 2012 appearing in eMarketer and an article dated October 19, 2011 appearing in Young Digital Lab
The explosion ripped through Building A5 on a Friday evening last May, an eruption of fire and noise that twisted metal pipes as if they were discarded straws.
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An explosion last May at a Foxconn factory in Chengdu, China, killed four people and injured 18. It built iPads.
When workers in the cafeteria ran outside, they saw black smoke pouring from shattered windows. It came from the area where employees polished thousands of iPad cases a day.
Two people were killed immediately, and over a dozen others hurt. As the injured were rushed into ambulances, one in particular stood out. His features had been smeared by the blast, scrubbed by heat and violence until a mat of red and black had replaced his mouth and nose.
A caller asked when the phone rang at Mr. Lai’s childhood home.
“Are you Lai Xiaodong’s father?”
Six months earlier, the 22-year-old had moved to Chengdu, in southwest China, to become one of the millions of human cogs powering the largest, fastest and most sophisticated manufacturing system on earth. That system has made it possible for Apple and hundreds of other companies to build devices almost as quickly as they can be dreamed up.
The caller told Mr. Lai’s father.
“He’s in trouble. Get to the hospital as soon as possible.”
In the last decade, Apple has become one of the mightiest, richest and most successful companies in the world, in part by mastering global manufacturing. Apple and its high-technology peers — as well as dozens of other American industries — have achieved a pace of innovation nearly unmatched in modern history.
However, the workers assembling iPhones, iPads and other devices often labor in harsh conditions, according to employees inside those plants, worker advocates and documents published by companies themselves. Problems are as varied as onerous work environments and serious — sometimes deadly — safety problems.
Employees work excessive overtime, in some cases seven days a week, and live in crowded dorms. Some say they stand so long that their legs swell until they can hardly walk. Under-age workers have helped build Apple’s products, and the company’s suppliers have improperly disposed of hazardous waste and falsified records, according to company reports and advocacy groups that, within China, are often considered reliable, independent monitors.
More troubling, the groups say, is some suppliers’ disregard for workers’ health. Two years ago, 137 workers at an Apple supplier in eastern China were injured after they were ordered to use a poisonous chemical to clean iPhone screens. Within seven months last year, two explosions at iPad factories, including the one at the Chengdu plant on May 20, 2011, killed four people and injured 77. Before those blasts, Apple had been alerted to hazardous conditions inside the Chengdu plant, according to a Chinese group that published that warning.
There was also a second explosion and fire at Foxconn's Shandong plant on September 27, 2011.
Nicholas Ashford, a former chairman of the National Advisory Committee on Occupational Safety and Health, a group that advises the United States Labor Department.
“If Apple was warned, and didn’t act, that’s reprehensible, but what’s morally repugnant in one country is accepted business practices in another, and companies take advantage of that.”
Apple is not the only electronics company doing business within a troubling supply system. Bleak working conditions have been documented at factories manufacturing products for Dell, Hewlett-Packard, I.B.M., Lenovo, Motorola, Nokia, Sony, Toshiba and others.
Current and former Apple executives, moreover, say the company has made significant strides in improving factories in recent years. Apple has a supplier code of conduct that details standards on labor issues, safety protections and other topics. The company has mounted a vigorous auditing campaign, and when abuses are discovered, Apple says, corrections are demanded.
And Apple’s annual supplier responsibility reports, in many cases, are the first to report abuses. This month, for the first time, the company released a list identifying many of its suppliers.
But significant problems remain. More than half of the suppliers audited by Apple have violated at least one aspect of the code of conduct every year since 2007, according to Apple’s reports, and in some instances have violated the law. While many violations involve working conditions, rather than safety hazards, troubling patterns persist.
Foxconn Precision Components
Li Mingqi, a former manager atFoxconn Technology, one of Apple’s most important manufacturing partners said.
“Apple never cared about anything other than increasing product quality and decreasing production cost.”
Li worked at Foxconn Technology until April 2011, and is suing Foxconn over his dismissal, helped manage the Chengdu factory where the explosion occurred.
He said.
“Workers’ welfare has nothing to do with their interests.”
Some former Apple executives say there is an unresolved tension within the company: executives want to improve conditions within factories, but that dedication falters when it conflicts with crucial supplier relationships or the fast delivery of new products. Tuesday, Apple reportedone of the most lucrative quarters of any corporation in history, with $13.06 billion in profits on $46.3 billion in sales. Its sales would have been even higher, executives said, if overseas factories had been able to produce more.
Executives at other corporations report similar internal pressures. This system may not be pretty, they argue, but a radical overhaul would slow innovation. Customers want amazing new electronics delivered every year.
One former Apple executive who, like others, spoke on the condition of anonymity because of confidentiality agreements said.
“We’ve known about labor abuses in some factories for four years, and they’re still going on. Why? Because the system works for us. Suppliers would change everything tomorrow if Apple told them they didn’t have another choice.
The executive asked.
If half of iPhones were malfunctioning, do you think Apple would let it go on for four years?”
Apple, in its published reports, has said it requires every discovered labor violation to be remedied, and suppliers that refuse are terminated. Privately, however, some former executives concede that finding new suppliers is time-consuming and costly. Foxconn is one of the few manufacturers in the world with the scale to build sufficient numbers of iPhones and iPads. So said Heather White, a research fellow at Harvard and a former member of the Monitoring International Labor Standards committee at the National Academy of Sciences said.
"Apple is not going to leave Foxconn and they’re not going to leave China. There’s a lot of rationalization.”
Apple was provided with extensive summaries of this article, but the company declined to comment. The reporting is based on interviews with more than three dozen current or former employees and contractors, including a half-dozen current or former executives with firsthand knowledge of Apple’s supplier responsibility group, as well as others within the technology industry.
In 2010, Steven P. Jobs discussed the company’s relationships with suppliersat an industry conference.
Mr. Jobs, who was Apple’s chief executive at the time and who died last October said.
“I actually think Apple does one of the best jobs of any companies in our industry, and maybe in any industry, of understanding the working conditions in our supply chain. I mean, you go to this place, and, it’s a factory, but, my gosh, I mean, they’ve got restaurants and movie theaters and hospitals and swimming pools, and I mean, for a factory, it’s a pretty nice factory.”
Here's the video of All Things Digital interviewin Steve Jobs about Foxconn's deplorable work conditions.
When asked specifically about Foxconn, Steve Jobs says,
"We're pretty on top of it. We're all over this."
Others, including workers inside such plants, acknowledge the cafeterias and medical facilities, but insist conditions are punishing.
One former Apple executive said.
“We’re trying really hard to make things better, but most people would still be really disturbed if they saw where their iPhone comes from.”
The Road to Chengdu
In the fall of 2010, about six months before the explosion in the iPad factory, Lai Xiaodong carefully wrapped his clothes around his college diploma, so it wouldn’t crease in his suitcase. He told friends he would no longer be around for their weekly poker games, and said goodbye to his teachers. He was leaving for Chengdu, a city of 12 million that was rapidly becoming one of the world’s most important manufacturing hubs.
Though painfully shy, Mr. Lai had surprised everyone by persuading a beautiful nursing student to become his girlfriend. She wanted to marry, she said, and so his goal was to earn enough money to buy an apartment.
Factories in Chengdu manufacture products for hundreds of companies. But Mr. Lai was focused on Foxconn Technology, China’s largest exporter and one of the nation’s biggest employers, with 1.2 million workers. The company has plants throughout China, and assembles an estimated 40 percent of the world’s consumer electronics, including for customers like Amazon, Dell, Hewlett-Packard, Nintendo, Nokia and Samsung.
Foxconn’s factory in Chengdu, Mr. Lai knew, was special. Inside, workers were building Apple’s latest, potentially greatest product: the iPad.
When Mr. Lai finally landed a job repairing machines at the plant, one of the first things he noticed were the almost blinding lights. Shifts ran 24 hours a day, and the factory was always bright. At any moment, there were thousands of workers standing on assembly lines or sitting in backless chairs, crouching next to large machinery, or jogging between loading bays. Some workers’ legs swelled so much they waddled. Zhao Sheng, a plant worker said.
“It’s hard to stand all day.”
Banners on the walls warned the 120,000 employees:
“Work hard on the job today or work hard to find a job tomorrow.”
Apple’s supplier code of conduct dictates that, except in unusual circumstances, employees are not supposed to work more than 60 hours a week. But at Foxconn, some worked more, according to interviews, workers’ pay stubs and surveys by outside groups. Mr. Lai was soon spending 12 hours a day, six days a week inside the factory, according to his paychecks. Employees who arrived late were sometimes required to write confession letters and copy quotations. There were “continuous shifts,” when workers were told to work two stretches in a row, according to interviews.
NOTE: To continue reading the remainder of this blog post click HERE.
COMMENTARY: I first became aware of the sweat shop conditions and suicides at Foxconn International in a previous blog post dated September 17, 2010following an extensive CNN investigation back on June 1, 2010. To say the least, any employer that would hang a threatening banner that says,
“Work hard on the job today or work hard to find a job tomorrow,”
is not concerned about the welfare of its employees, but concerned solely about production and meeting Apple's deadlines. If I were a worker at Foxconn International, I would consider that a form of working under extreme duress and threat of being fired. Any American company that would hang such a banner in their plant would be the subject to immediate investigation by the National Labor Relations Board, OSHA, ACLU, EPA and human rights organizations.
Let there be no doubt that Apple's "magical" devices are awash with the blood of 12 Foxconn International plant workers who committed or tried to commit suicide. This does not include the dead Chinese plant workers who died from cancer or suffering from chronic illnesses due to the massive environmental pollution committed by several of Apple's Chinese manufacturers or the plant workers killed due to explosions and fires at two Foxconn plants. For whatever its worth, here's a timeline of the list of suicides at Foxconn International in 2010:
Click Image To Enlarge
The testimony given by numerous previous plant managers, Chinese investigators and Foxconn plant workers is in sharp contrast to the naievity with which Steve Jobs struggles to explain away the sweat shop conditions, human rights violations, pollution, explosions and fires at Foxconn International, and should be an insult to the intelligence of all Apple evangelists throughout the world.
In a blog article dated November 7, 2011, I commented on the findings of China's Environmental Protection Agency that Apple's supply chain in China was creating a "hazardous waste disposal disaster on a massive scale." Apple has always operated under a web of secrecy created by Steve Jobs, and refused to even admit that the companies identified by China's Institute of Public and Environmental Affairs (IPE) even produced products or components for Apple. In fact, Apple did not even bother to respond to China's IPE about the alledged pollution violations. This prompted me to contact Apple directly, and all I received for my efforts was a "no comment," by Apple's publicity department.
Apple's supplier chain pollution disaster flies in the face of Apple's established Supplier Responsibility requirements for its worldwide suppliers. Below is a highlight of the opening exerpt from Apple's Supplier Responsibility requirements:
"Supplier Responsibility at Apple"
Apple is committed to ensuring the highest standards of social responsibility wherever our products are made. We insist that our suppliers provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes.
Apple’s program is based on our comprehensive Supplier Code of Conduct, which outlines our expectations for the companies we do business with. We evaluate compliance through a rigorous auditing program and work proactively with our suppliers to drive change."
The specific language in Apple's Supplier Responsibility requirements which drew my attention is a line in the first paragraph that says, "..and use environmentally responsible manufacturing processes."
Apple's suppliers in China have a record of abusing their plant workers, creating dangerous working conditions, and polluting the environment on a massive scale, but all of this is in direct violation of Apple's Supplier Code of Conduct. This makes you wonder just how muchTim Cook, then Steve Jobs' Chief Operating Officer, and responsible for Apple's worldwide outsourced manufacturing, knew about all the worker abuses and environmental pollution. Steve Jobs makes it sound like Apple was completely caught off guard, and his comment that they are "studying and trying to understand the situation," sounds like pure bullshit to me. I have never heard Steve Jobs struggle so much to explain the problems at Foxconn International. Sorry, Apple evangelists, but Steve Jobs is nothing but an asshole, but may his soul rest in peace.
Looks like Foxconn International found a solution to reduce worker complaints and allegations of operating a sweat shop--just get rid of the plant workers. In a blog article dated October 15, 2011, I commented on Foxconn International's plans to replace plant workers with one million robots over the next three years.
In a blog post dated January 13, 2012, Apple CEO Tim Cook disclosed a comprehensive list of its 156 major Chinese suppliers for the first time, along with a detailed Apple Production Supplier Responsibility Report - 2012 Progress Report on factory inspections, moving to combat an array of criticism about working conditions in its supply chain and the company's transparency about it.
Tim Cook said.
"Working hours is a complex issue. I am confident the company can improve in the area by monitoring these plants at a very, very micro level. I know this is a journey."
Mr. Cook said Apple has been sharing more of its findings about working conditions in its factories over time, but this year's update represents its most detailed. It comes as the drumbeat of criticism against practices across the company's ballooning supplier footprint has grown from prominent Chinese environmental activists and others. Many of those have taken aim at the company's prior unwillingness to disclose all the suppliers it works with.
When Tim Cook was Apple COO, he was responsible for worldwide manufacturing and those 156 Chinese suppliers, but he either looked the other way, ignored the problem or refused to admit the suppliers under investigation were even suppliers. It's truly remarkable that Apple is finally getting around to accepting responsibility and disclosing its Chinese and other Asian suppliers.
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I have no doubt that Apple is at its very core is responsible for what is going on with its suppliers in China. It's strict secrecy and the "curtain of fear" created by Steve Jobs is at the root of the problems in China. No Apple employee would ever admit anything or say something to violate that strict secrecy without personally receiving the wrath of Steve Jobs, and now Tim Cook.
Apple is known for the stellar profit margins (46% in Q4 2011) which are the highest of any computer and consumer electronics company, and there's a reason for this. This chart, put together by Bloomberg, shows the slim profit margins that Foxconn deals with to build millions of pieces of consumer electronics for clients like Apple -- which has seen its margins grow dramatically in recent years.
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At the time of the iPhone launch in 2007, Apple's profit margins were at 15.4 percent, while Foxconn's was at 2.7. In the most recent quarter, Apple reported 30.8 percent margins -- double what it was 4 years ago -- with Foxconn at a mere 1.5 percent.
Foxconn has continued to grow with the tremendously successful launches of new iPhones and the iPad. The company has sacrificed margin growth so it can get volume and scale, something very important to Apple which puts extraordinary pressure on its suppliers for low prices.
While Foxconn's margins are extremely small in comparison to Apple, they do exceed those of a number of categories, including grocery stores and the global shipping industry.
The bottom line is this: It's clearly all about corporate profits, and Apple has found a great partner in Foxconn International, so you won't bee seeing any changes in suppliers for its iPhone and iPad anytime soon.
We can only hope that Apple realizes that they must keep a balance between good corporate ethics, respect for workers, worker rights and protecting the environment. Let's hope that Apple CEO Tim Cook is serious about both sides of the equation.
Courtesy of an article dated January 25, 2012 appearing in The New York Times and an article dated July 11, 2011 appearing in The DamnLag
The notorious character "Humongous" from the "The Road Warrior" film. Visions of the future economy. All he wanted was some gas for his chopper, so he took matters into his own hands.
The man who predicted the 1987 stock market crash and the fall of the Soviet Union is now forecasting a revolution in America, food riots and tax rebellions - all within four years, while cautioning that putting food on the table will be a more pressing concern than buying Christmas gifts by 2012.
Gerald Celente, the CEO of Trends Research Institute, is publisher of the Trends Journal which forecasts and analyzes business, socioeconomic, political, and other trends, and is renowned for his accuracy in predicting future world and economic events which can send a chill down your spine.
Celente says that by 2012 America will become an underdeveloped nation, that there will be a revolution marked by food riots, squatter rebellions, tax revolts and job marches, and that holidays will be more about obtaining food, not gifts.
Celente, adding that the situation would be "worse than the greatdepression" said.
"We're going to see the end of the retail Christmas... we're going to see a fundamental shift take place... putting food on the table is going to be more important than putting gifts under the Christmas tree."
Celente also said.
"America's going to go through a transition the likes of which no one is prepared for."
He notes that people's refusal to acknowledge that America was even in a recession highlights how big a problem denial is in being ready for the true scale of the crisis.
Celente, who successfully predicted the 1997 Asian Currency Crisis, the sub-prime mortgage collapse and the massive devaluation of the U.S. dollar, told UPI in November last year that the following year would be known as "The Panic of 2008," adding that "giants (would) tumble to their deaths," which is exactly what we have witnessed with the collapse of Lehman Brothers, Bear Stearns and others.
He also said that the dollar would eventually be devalued by as much as 90 per cent. The consequence of what we have seen unfold this year would lead to a lowering in living standards, Celente predicted a year ago, which is also being borne out by plummeting retail sales figures.
The prospect of revolution was a concept echoed by a British Ministry of Defence report last year, which predicted that within 30 years, the growing gap between the super-rich and the middle class, along with an urban underclass threatening social order would mean,
"The world's middle classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest. The middle classes could become a revolutionary class."
In a separate recent interview, Celente went further on the subject of revolution in America. He said.
"There will be a revolution in this country. It ' s not going to come yet, but it's going to come down the line and we 're going to see a third party and this was the catalyst for i t: the takeover of Washington, D.C., in broad daylight by Wall Street in this bloodless coup. And it will happen as conditions continue to worsen."
He goes on to give us a horrid look into the future of America.
"The first thing to do is organise with tax revolts. That's going to be the big one because people can't afford to pay more school tax, property tax, any kind of tax. You're going to start seeing those kinds of protests start to develop."
"It's going to be very bleak. Very sad. And there is going to be a lot of homeless, the likes of which we have never seen before. Tent cities are already sprouting up around the country and we're going to see many more."
"We're going to start seeing huge areas of vacant real estate and squatters living in them as well. It's going to be a picture the likes of which Americans are not going to be used to."
"It's going to come as a shock and with it, there's going to be a lot of crime. And the crime is going to be a lot worse than it was before because in the last 1929 Depression, people's minds weren't wrecked on all these modern drugs, over-the-counter drugs, or crystal meth or whatever it might be."
"So, you have a huge underclass of very desperate people with their minds chemically blown beyond anybody's comprehension."
The George Washington blog has compiled a list of quotes attesting to Celente's accuracy as a trend forecaster.
CNN Headline News:"When CNN wants to know about the Top Trends, we ask Gerald Celente."
USA Today:"Gerald Celente has a knack for getting the zeitgeist right."
CNBC:"There's not a better trend forecaster than Gerald Celente. The man knows what he's talking about."
The Wall Street Journal: "Those who take their predictions seriously ...consider. Gerald Celente and the Trends Research Institute."
The Atlantic Journal-Constitution:"Gerald Celente is always ahead of the curve on trends and uncannily on the mark ... he's one of the most accurate forecasters around."
The New York Times:"Mr. Celente tracks the world's social, economic and business trends for corporate clients."
48 Hours, CBS News:"Mr. Celente is a very intelligent guy. We are able to learn about trends from an authority."
The Detroit News:"Gerald Celente has a solid track record. He has predicted everything from the 1987 stock market crash and the demise of the Soviet Union to green marketing and corporate downsizing."
Chicago Tribune: "Gerald Celente forecast the 1987 stock market crash, 'green marketing,' and the boom in gourmet coffees."
The Los Angeles Times:"The Trends Research Institute is the Standard and Poor’s of Popular Culture."
New York Post: "If Nostradamus were alive today, he'd have a hard time keeping up with Gerald Celente."
So there you have it - hardly a nut job conspiracy theorist blowhard now is he? The price of not heeding his warnings will be far greater than the cost of preparing for the future now.
Storable food and gold are two good places to make a start.
COMMENTARY: Gerald Celente reminds me of a fast talking Atlantic City bookie, laying odds on the Super Bowl, than a professional trends expert and visionary, but you cannot deny the accuracy of many of his predictionssince he started in 1980.
You don't have to be a noted economist to make these predictions. The evidence of a U.S. financial collapse are all around us. I have written extensively on different aspects of the U.S. and world economies, including:
In a blog post dated July 6, 2011, titled "The Root Causes Behind Today's High Unemployment Situation, And Why This May Not Change Anytime Soon," I showed in great detail why unemployment will continue to remain high. This is a must read for any pessimists who believe we are out of the woods.
The symptoms are everywhere around you. In February 2011, I wrote about the impending Peak-Oil Crisis, a catastrophe we will all face because the demand for oil will exceed production (peak-oil). If you have noticed a rapid rise in the price of gas, that's what I am talking about.
The Arab Spring Revolutions which erupted in North Africa and Middle East saw the overthrow of long standing dictators in Egypt, Libya and Tunisia, a bloddy revolution in Syria which continues to this day, and unrest and demonstrations in Jordan. All of these events have created further instability in the oil rich regions of the Middle East and North Africa.
Adding fuel to the fire is the refusal of Iran to end its illegal nuclear weapons program in defiance of the U.N. and AEIA inspectors and boycott resolutions, and threats to destroy Israel and further threats to the West that it could close the Straits of Hormuz, adds further tensions and instability to the free flow of oil from the Middle East to the rest of the world.
This is not just a U.S. problem, but it is global in scale. We all know about the financial collapse of several European countries, namely Greece, Spain, Portugal and now Italy, but major developed nations like Japanare on the brink of financial collapse. Standard & Poors recently reduced the credit ratings of France, Greece, Spain, Portugal and Italy. This will make it doubly difficult for these countries to raise funds and pay their longterm sovereign debt when it comes due.
In a blog post dated January 7, 2012, I told you about passage and signing by President Obama, of the National Defense Authorization Act or NDAA (H.R. bill 1540), which effectively gives the President the power to use our military in purely civilian matters. Though the wording in the NDAA is itself torturous -- and there is a provision for a waiver from the Defense Secretary regarding mandatory military detentions -- the elasticity of words like "associated forces" and "supported" have left some civil libertarians worried that the U.S. military could be deployed domestically against people opposing future American wars against alleged "terrorists" or "terrorist states." In effect, this new NDAA law could lead to a police state, in which you could be detained as a "person of interest" or labeled as a "traitor" simply for demonstrating against future wars. You could be held for an indefinite period of time, denied rights of habeaus corpus and you would disappear into some detention camp never to be seen again. Does the U.S. government believe that civil law and order will collapse during a revolution? Why would the politicians pass such a devisive law and destroy your civil and legal rights under the U.S. Constitution unless they are planning for something?
Finally, in a blog post dated January 9, 2012 (reposted), I told you about the booming demand for underground "Apocalypse" bunkers by the rich and powerful. They are the so-called 1 percenters with the financial means to protect themselves in the event of a natural catastrophe, or maybe a revolution, perhaps? These wealthy individuals are well connected and are the largest doners and supporters to both major political parties. Why would they be willing to pay many thousands of dollars unless they knew something truly bad was about to happen? While the 99 percenters experience an all-out revolution, these rich and powerful individuals will live in absolute luxury and comfort in plush deep underground bunkers protected from the chaos above ground.
It does not surprise me then why Mr. Celente predicts a "violent revolution" and that "food will become more important than Christmas". There is a lot of anger out there. The roots for the emergence of a third party are already here. The Tea Party could emerge as that Third Party. The Tea Partyreflects a lot of that anger, although I don't agree with much of their radical politics, including their racism reflected in their personal hate for President Obama. The Occupy Wall Street movement has expanded across the country. Major demonstrations are planned in 2012 in many major cities.
Courtesy of an article dated January 30, 2011 appearing in Before It's News
The rich are getting richer at a pace that leaves everyone behind. And in the long run, that threatens our democracy.
You might not know it, with all the progress we've made as a society in the past 100 years (our first black president, for instance), but America is still an incredibly unequal place. The gaps between classes, sexes, and races are--in many ways--actually getting worse, and the gap between the rich and the poor is larger than at any time in the last 75 years.
This graphic illustrates just a few of the quantifiable ways that our society manifests these various inequalities.
Taken from information provided by The Stanford Center for the Study of Poverty and Inequality, the graphic--by Kristy Tillman for Objects in Repeat--explains 15 different facts about American inequality that might tweak your worldview a little. For instance, did you know that the average CEO's pay is 1,039 times more generous than that of the average worker?
And it's not as if we've always lived that way. Forty years ago, CEOs were only being paid 39 times that of the average worker. Some companies these days are tying CEO pay to the pay of the least compensated employee at the same company. Clearly not that many.
Or look at the results of a study done in Chicago and Boston in 2001 and 2002: Job applicants with "black" sounding names were far less likely to be called in for job interviews (this was back when there were jobs to interview for):
Looking for a job? Consider changing your name to Kristen or Carrie on your resume. That wouldn't help your insurance situation, though. Children of minorities are far more likely to live without health insurance:
What else? Women also make less than men (though this is improving!) and jobs with higher pay have a smaller percentage of women working at them. Minorities are far more likely to drop out of school, and immigrants are far less likely to receive an education. And though GDP has risen, wages have remained stagnant (except for those CEOs), which has contributed to the top 10% of the wealthiest Americans controlling nearly three-quarters of all the money in America.
Taken individually, there are potential statistical and cultural reasons to explain away each of these stats. Arranged in this order, it's hard not to realize we need to do better to give everyone a little bit more of an even playing field.
COMMENTARY: Nothing about this infographic shocks me. Not everyone is meant to be rich. Capitalism does not work for everybody. When you become rich, for some reason people forget where they came from. The attitude seems to be, "I got mine, so go get yours." That's the problem with trickle down economics. There is really no trickle down.
CEO's that did a shitty job, still draw huge bonuses. It is a rare case where this is not true. Even those banks that were bailed out by the Federal government, paid themselves fat bonsuses. They are the ones that got us into this fine economic mess.
Where are the jobs for minorities and older Americans. Race has a lot to do with it. If you are a minority, namely black or hispanic, you already have two strikes against you. If you are over 50 years of age, nobody wants to hire you. If you are out of work, many employer's won't even interview view. What's with that shit? Even employment ads say, "only employed need apply". There is no such thing as racial equality. I looked at the unemployment numbers from the Bureau of Labor Statistics, and they are frightening.
What I have never been able to figure out is why all developed countries, and even many developing nations, that universal healthcare for their people, yet the U.S. believes that this is a bad thing. It's not a right. I don't want to dwelve too deeply into politics, but is it possible that some individuals, don't care if you die due to lack of healthcare? I am really disturbed by this. It goes beyond cruelty.
I actually looked into America's healthcare system in a previous blog post titled, "An Unabashed Look At The U.S. Health Care System, 'The Greatest Health Care System In The World', Damn Gummit". It gets worst, did you know how much the pharmaceutical industry paid politician's to protect their interests through their Washington, D.C. lobbyists? I didn't think you did. Check this. Do you know what the top health care industry CEO's in America make? You will be shocked when you read this.
In the U.S. we have our priorities backwards. We spend more on national defense than we spend on educating our children, feeding the poor and aged and providing decent healthcare for all American's. Every state is attacking their public school systems. Teachers are being laidoff in mass. How can America maintain its competitive edge if our kids are not adequately educated? My country is fighting three wars, if you count Libya. 175,000 troops are in Iraq and Afghanistan. Our military seem to be everywhere, and yet, most of those countries don't want us there. How many countries have 15 super carrier's? Stealth bombers and fighter jets? Intercontinental ballistic missiles, nuclear warheads? Who are we kidding. Nobody wants to really fight us, or they would've by now.
The 400 richest famlies in America now control 50% of the net worth of America. 3% of the wealthiest Americans control 90% of the wealth in America.
With the XO-3, OLPC unveils a design that will allow it to be customized for myriad markets.
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Let's get this out of the way. The OLPC XO-3, the rugged ultra-low-cost tablet addition to the One Laptop Per Child family, newly launched at CES 2012, is much thicker than the concept tablet, which they showed in 2009. Plus, it's missing the ring!
Yves Béhar, founder of fuseproject and OLPC Chief Designer says.
"They're still the ultimate goal. The key component that enables the thinness of the concept tablet is flexible color e-paper, and that has been slow to come to market."
When it does, the OLPC team anticipates that the robustness and low power consumption will make for an ideal very thin and lightweight tablet.
The original XO-3 concept, featuring a slimmer design and that lovely ring
The ring was a design solution to that anticipated thinness. Béhar, and the ring made it easy for small hands to keep a grip on the tablet says.
"Children have a nonchalant way of handling things."
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With technology dictating a thicker tablet, and a bezel around the edges of the screen, the XO-3 is more comfortable to grip; testing showed that the ring becomes unnecessary. He says.
"It's a detail I like, but part of what makes OLPC exciting and different is that we have to be editors and make sure that everything is there for a reason."
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Testing and getting back reports of usage on the ground is a core part of the OLPC design process. From their previous experience, they knew localization would be key for this product. For instance, one of the benefits of a tablet form factor is that keyboards and other interfaces are entirely done in software, so it's easy to swap them out for different languages and milieus. Easier than doing it in hardware, anyway.
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There is localization in the hardware as well. This is localization not for language but for the infrastructural conditions of the places where the tablets will be used. Every XO-3 comes with a removable cover. Béhar says.
"The cover is the multiple personality side of the tablet."
They can be simple passive protection, but depending on the needs of a particular locale, other capabilities can be built in.
For example, one version of the cover comes with a solar panel on the inside along with a thin battery. When you are in school, using the machine, you can leave the cover out in the sun to power the battery. When you put the cover back over the tablet, the battery connects and recharges the machine. Béhar says they are also working on a version of the cover with antenna that will enable the tablet to communicate with satellites. There are more accessories to come. Béhar says.
"We learned a lot with the original OLPC XO."
COMMENTARY: What incredible and noble goal--to bring a computer to every child in the world. That picture of young women in Afghanistan, who have suffered so much under the Taliban, is so touching. I am glad that there are organizations like Fuse Project and their "One Laptop Per Children." Love the slick new design of the Xo-3 laptop. The children must just enjoy using it for hours on end.
Courtesy of an article dated January 10, 2012 appearing in Fast Company Design
President Obama bows to Chinese President Hu Jintao at the Nuclear Security Summit in April 2010, after all they are our bank
The USS Gerald R. Ford was supposed to help secure another half century of American naval supremacy. The hulking aircraft carrier taking shape in a dry dock in Newport News, Va., is designed to carry a crew of 4,660 and a formidable arsenal of aircraft and weapons.
But an unforeseen problem cropped up between blueprint and expected delivery in 2015: China is building a new class of ballistic missiles designed to arc through the stratosphere and explode onto the deck of a U.S. carrier, killing sailors and crippling its flight deck.
WSJ's Nathan Hodge reports on a new fleet of Chinese ballistic missiles that can strike warships nearly 2,000 miles offshore and are intended to keep U.S. warships. AP Photo/Xinhua, Pu Haiyang
Since 1945, the U.S. has ruled the waters of the western Pacific, thanks in large part to a fleet of 97,000-ton carriers—each one "4.5 acres of mobile, sovereign U.S. territory," as the Navy puts it. For nearly all of those years, China had little choice but to watch American vessels ply the waters off its coast with impunity.
Now China is engaged in a major military buildup. Part of its plan is to force U.S. carriers to stay farther away from its shores, Chinese military analysts say. So the U.S. is adjusting its own game plan. Without either nation saying so, both are quietly engaged in a tit-for-tat military-technology race. At stake is the balance of power in a corner of the seas that its growing rapidly in importance.
Pentagon officials are reluctant to talk publicly about potential conflict with China. Unlike the Soviet Union during the Cold War, Beijing isn't an explicit enemy. During a visit to China last month, Michele Flournoy, the U.S. undersecretary of defense for policy, told a top general in the People's Liberation Army that "the U.S. does not seek to contain China," and that "we do not view China as an adversary," she recalled in a later briefing.
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Nevertheless, U.S. military officials often talk about preparing for a conflict in the Pacific—without mentioning who they might be fighting. The situation resembles a Harry Potter novel in which the characters refuse to utter the name of their adversary, says Andrew Krepinevich, president of the Center for Strategic and Budgetary Assessments, a think tank with close ties to the Pentagon. He says.
"You can't say China's a threat. You can't say China's a competitor."
China Unveils New "Carrier-Killer" Anti-Ship Ballistic Missle
Beijing's interest in developing anticarrier missiles is believed to date to the Taiwan Strait crisis of 1996. The Chinese government, hoping to dissuade voters in Taiwan from re-electing a president considered pro-independence, conducted a series of missile tests, firing weapons into the waters off the island. President Bill Clinton sent two carrier battle groups, signaling that Washington was ready to defend Taiwan—a strategic setback for China.
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China's state media has said its new missile, called the DF-21D, was built to strike a moving ship up to about 1,700 miles away. U.S. defense analysts say the missile is designed to thwart our defenses in two key ways:
Come in at an angle too high for U.S. defenses against sea-skimming cruise missiles.
Com in too low for defenses against other ballistic missiles.
Flight path of China's DF-21D ASBM (Click Image To Enlarge)
Even if U.S. systems were able to shoot down one or two, some experts say, China could overwhelm the defenses by targeting a carrier with several missiles at the same time.
As such, the new missile—China says it isn't currently deployed—could push U.S. carriers farther from Chinese shores, making it more difficult for American fighter jets to penetrate its airspace or to establish air superiority in a conflict near China's borders.
Comparative Range of China's DF-21D missle at 2700KM (Blue) and 1500KM (Yellow) ranges(Click Image To Enlarge)
U.S. Response To New China Threat
In response, our military is developing:
The Navy is testing long-range pilotless, drone aircraft that can hover 70,000 feet above aircraft carriers and allows fleet commanders to track suspicious vessels across vast expanses of sea. A prototype of the as-yet-unnamed drone, referred to as the Broad Area Maritime Surveillance (BAMS) system, is in action with the Navy’s 5th Fleet in the Pacific and, according to one naval expert, could help keep tabs on any Iranian threats to shipping in the Persian Gulf.
The Air Force wants a fleet of pilotless bombers capable of cruising over vast stretches of the Pacific. The Air Force presently has an extensive arsenal of medium-range pilotless drones, including the MQ-1 Predator and MQ-9 Reaper, and used in both Iraq and Afghanistan. Now on the Pentagon wish list is a proposed fleet of 80 to 100 nuclear-capable bombers that could operate with or without a pilot in the cockpit. Pentagon weapons acquisition chief Ashton Carter met separately with representatives of Northrop, Boeing Co. and Lockheed Martin Corp., Pentagon spokeswoman Cheryl Irwin said. These companies are expected to vie for the estimated $55-billion contract that is expected to provide jobs and decades of work for Southern California’s aerospace industry.
China Also Presents A Cyberspace Threat
The gamesmanship extends into cyberspace. U.S. officials worry that, in the event of a conflict, China would try to attack the satellite networks that control drones, as well as military networks within the U.S. The outcome of any conflict, they believe, could turn in part on who can jam the other's electronics or hack their computer networks more quickly and effectively.
In May 26, 2011, at a recent press conference held by the Defense Ministry, Geng Yansheng, spokesman of China's Defense Ministry, explained the role of "China's Blue Team," a team of hackers created to twart cyberattacks. He said.
"At present, Internet safety has become an international issue. It not only affects our civil societies but also the military. China is also a victim of Internet attacks. Right now our Internet protection system is still relatively weak. Improving Internet safety is one of the most prominent tasks of our military training. The purpose of the "Cyber Blue Team" is to improve our ability to safeguard Internet security."
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The Defense Ministry also emphasized that the "Cyber Blue Team" are not hackers and that the International community should not misunderstand the purpose of it. "Cyber Blue Team" is just a nickname used within the military training routines and is not an actual unit within the PLA.
China's Cyber Blue Team busy hacking (Click Image To Enlarge)
Sizing up China's electronic-warfare capabilities is more difficult. China has invested heavily in cybertechnologies, and U.S. defense officials have said Chinese hackers, potentially working with some state support, have attacked American defense networks. China has repeatedly denied any state involvement.
How China Plans To Control The Seas Through "Anti-Access, Area Denial" Technologies
Throughout history, control of the seas has been a prerequisite for any country that wants to be considered a world power. China's military buildup has included a significant naval expansion. China now has 29 Song Class electric submarines armed with antiship cruise missiles, compared with just eight in 2002, according to Rand Corp., another think tank with ties to the military. In August, China conducted a sea trial of the "Varyag", its first aircraft carrier —a vessel that isn't yet fully operational.
At one time, military planners saw Taiwan as the main point of potential friction between China and the U.S. Today, there are more possible flash points. Tensions have grown between Japan and China over islands each nation claims in the East China Sea. Large quantities of oil and gas are believed to lie under the South China Sea, and China, Vietnam, the Philippines and other nations have been asserting conflicting territorial claims on it. Last year, Vietnam claimed China had harassed one of its research vessels, and China demanded that Vietnam halt oil-exploration activities in disputed waters.
A few years ago, the U.S. military might have responded to any flare-up by sending one or more of its 11 aircraft carriers to calm allies and deter Beijing. Now, the People's Liberation Army, in addition to the missiles it has under development, has submarines capable of attacking the most visible instrument of U.S. military power.
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Eric Heginbotham, who specializes in East Asian security at Rand says.
"This is a rapidly emerging development. As late as 1995 or 2000, the threat to carriers was really minimal. Now, it is fairly significant. There is a whole complex of new threats emerging."
The Chinese military embarked on a military modernization effort designed to blunt U.S. power in the Pacific by developing what U.S. military strategists dubbed "anti-access, area denial" technologies.
Adm. Gary Roughead, the recently retired U.S. chief of naval operations, last year said.
"Warfare is about anti-access. You could go back and look at the Pacific campaigns in World War II, [when] the Japanese were trying to deny us access into the western Pacific."
In 2004, Chinese President Hu Jintao unveiled a new military doctrine calling for the armed forces to undertake "new historic missions" to safeguard China's "national interests." Chinese military officers and experts said those interests included securing international shipping lanes and access to foreign oil and safeguarding Chinese citizens working overseas.
At first, China's buildup was slow. Then some headline-grabbing advances set off alarms in Washington. In a 2007 test, China shot down one of its older weather satellites, demonstrating its ability to potentially destroy U.S. military satellites that enable warships and aircraft to communicate and to target bases on the Chinese mainland.
The Pentagon responded with a largely classified effort to protect U.S. satellites from weapons such as missiles or lasers. A year after China's antisatellite test, the U.S. demonstrated its own capabilities by blowing up a dead spy satellite with a modified ballistic-missile interceptor.
Last year, the arms race accelerated. In January, just hours before then U.S. Defense Secretary Robert Gates sat down with Chinese President Hu to mend frayed relations, China conducted the first test flight of a new, radar-evading fighter jet. The plane, called the Chendu J-20 (see video below), might allow China to launch air attacks much farther afield—possibly as far as U.S. military bases in Japan and Guam.
The aircraft carrier China launched in August was built from a hull bought from Ukraine. The Pentagon expects China to begin working on its own version, which could become operational after 2015—not long after the USS Gerald R. Ford enters service.
American military planners are even more worried about the modernization of China's submarine fleet. The newer vessels can stay submerged longer and operate more quietly than China's earlier versions. In 2006, a Chinese Song class submarine appeared in the midst of a group of American ships, undetected until it rose to the surface.
China's Type-094 Nuclear Ballistic Missile Submarine (SSBN) is now under construction
China's Song Class Type-039 and 041 electric submarines (SS) carry cruise missiles
China's technological advances have been accompanied by a shift in rhetoric by parts of its military. Hawkish Chinese military officers and analysts have long accused the U.S. of trying to contain China within the "first island chain" that includes Japan and the Philippines, both of which have mutual defense treaties with the U.S., and Taiwan, which the U.S. is bound by law to help defend. They now talk about pushing the U.S. back as far as Hawaii and enabling China's navy to operate freely in the western Pacific, the Indian Ocean and beyond.
Maj. Gen. Luo Yuan, one of China's most outspoken military commentators, told a conference in September.
"The U.S. has four major allies within the first island chain, and is trying to starve the Chinese dragon into a Chinese worm."
The Pentagon Conducts War Games
China's beefed up military still is a long way from having the muscle to defeat the U.S. Navy head-to-head. For now, U.S. officials say, the Chinese strategy is to delay the arrival of U.S. military forces long enough to take control of contested islands or waters.
Publicly, Pentagon leaders such as Mr. Gates and Adm. Mike Mullen, former chairman of the Joint Chiefs of Staff, have said the U.S. would like to cultivate closer military-to-military ties with China.
Privately, China has been the focus of planning. In 2008, the U.S. military held a series of war games, called Pacific Vision, which tested its ability to counter a "near-peer competitor" in the Pacific. That phrase is widely understood within the military to be shorthand for China.
Retired Air Force Gen. Carrol "Howie" Chandler, who helped conduct the war games says.
"My whole impetus was to look at the whole western Pacific. And it was no secret that the Chinese were making investments to overcome our advantages in the Pacific."
Those games tested the ability of the U.S. to exercise air power in the region, both from land bases and from aircraft carriers. People familiar with the exercises say they informed strategic thinking about potential conflict with China. A formal game plan, called AirSea Battle, now is in the works to develop better ways to fight in the Pacific and to counter China's new weapons, Pentagon officials say.
U.S. Navy Developing New Weapons And Expanding Bases
The Navy is developing new weapons for its aircraft carriers and new aircraft to fly off them. On the new Ford carrier, the catapult that launches jets off the deck will be electromagnetic, not steam-powered, allowing for quicker takeoffs.
The carrier-capable drones under development, which will allow U.S. carriers to be effective when farther offshore, are considered a breakthrough. Rear Adm. William Shannon, who heads the Navy's office for unmanned aircraft and strike weapons, compared the drone's debut flight last year to a pioneering flight by Eugene Ely, who made the first successful landing on a naval vessel in 1911. "I look at this demonstration flight…as ushering us into the second 100 years of naval aviation," he said.
The Air Force wants a longer-range bomber for use over the Pacific. Navy and Air Force fighter jets have relatively short ranges. Without midair refueling, today's carrier planes have an effective range of about 575 miles.
China's subs, fighter planes and guided missiles will likely force carriers to stay farther than that from its coast, U.S. military strategists say.
Andrew Hoehn, a vice president at Rand says.
"The ability to operate from long distances will be fundamental to our future strategy in the Pacific. You have to have a long-range bomber. In terms of Air Force priorities, I cannot think of a larger one."
The U.S. also is considering new land bases to disperse its forces throughout the region. President Barack Obama recently announced the U.S. would use new bases in Australia, including a major port in Darwin. Many of the bases aren't expected to have a permanent American presence, but in the event of a conflict, the U.S. would be able to base aircraft there.
In light of China's military advances and shrinking U.S. defense budgets, some U.S. military officers have begun wondering whether the time has come to rethink the nation's strategic reliance on aircraft carriers like the USS Ford. A successful attack on a carrier could jeopardize the lives of as many as 5,000 sailors—more than all the troops killed in action in Iraq.
Navy Captain Henry Hendrix and retired Marine Corps Lt. Col. Noel Williams wrote in an article in the naval journal Proceedings last year.
"The Gerald R. Ford is just the first of her class. She should also be the last."
COMMENTARY: In two blog posts dated February 7, 2011, July 16, 2011 and November 8, 2011 and have extensively covered the new cyberspace threat posted by China, including the U.S. USCYBERCOM or CYBERCOM and its Chinese counterpart "Blue Cyber Team." In 2011, President Barack Obama established cyberattack rules of engagement and could respond to such an attack by an attack of its own, including the use of military weapons.
China has just finished test flying its new Chendu J-20 stealth fighter jet, so not much is known about the new Chinese stealth fighter specifications and capabilities, but it is believed that the America's F-22 and new F-35 stealth fighters are more than a match. However, the J-20's stealth capabilities, larger armament payload and longer range could present a serious threat U.S. bases in South Korea, Taiwan and Japan.
China's navy is growing rapidly, and includes submarines (both conventional and nuclear), surface combat ships, coastal warfare, amphibious warfare and minewarfare vessels. U.S. military experts estimate there are approximately 63 submarines in its fleet, of which 10 are nuclear. They include two classes of nuclear attack submarines (SSN)--Type 091 and 093. China also has two classes of nuclear ballistic missle submarines (SSBN)--Type 092 and 093. China is also building a newer, larger nuclear ballistic missle submarine (SSBN), the Type 095. Here's an estimate of China's latest naval inventory.
China's Naval Inventory
The following chart may help explain why the U.S. Naval Pacific Fleet is supporting Taiwan and patrolling the East and South China Seas.
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Obama's bow to China's President not withstanding, the U.S. is not sitting on its butt while China ramps up its military. We have the largest naval fleet of any country, largest air force, largest nuclear arsenal, both day (F-22 and F-35) and night stealth fighters (F-117), and stealth bombers (B-2).
The U.S. Navy is the largest in the world; its battle fleet tonnage is greater than that of the next 13 largest navies combined, including China's. The U.S. Navy also has the world's largest carrier fleet, with 11 in service, one under construction (two planned), and one in reserve. The service had 328,516 personnel on active duty and 101,689 in the Navy Reserve in January 2011. It operates 286 ships in active service and more than 3,700 aircraft.
Our nuclear submarine fleet numbers 71, giving us a 7-to-1 superiority in nuclear submarines. We have 12 super aircraft carriers to China's lone "little" aircraft carrier. The U.S. is also developing a fleet of very fast Littoral ships that can operate off costal waters and can be used in different missions, an electronic rail gun that can shoot a projectile 100 miles with precise accuracy (and shoot down China's DF-21 carrier-killer missile), and we are working on numerous secret aircraft and military weapons systems that very few people know about.
The U.S. also has the world's largest, and most sophisticated fleet of unmanned drones, many of them being used in combat over the skys of Afghanistan and Pakistan. The U.S. is now testing two unmanned, long-range, nuclear-capable bombers. When completed, that bomber fleet will number 80-100.
Obama's bow to China's president not withstanding, the U.S. is not intimidated by China, and I don't see us losing our mastery of the seas anytime soon. We will just have to learn to co-exist. Do you honestly believe they would jeopardize their entire economy, risk a war and everything they have built, over the little island of Taiwan? China also holds over $1 trillion of U.S. debt and I am sure they would like to be paid at some time.
SEOUL—North Koreans bade farewell to dictator Kim Jong Il Wednesday as his body was borne around the snowy capital of Pyongyang in a motorcade that was broadcast on TV a few hours after it happened.
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Tens of thousands of North Koreans gathered along the procession route, which began and ended at the palace built for his father, North Korean founder Kim Il Sung, and where visitors had lined up for the past week to view his body under a glass case.
North Korea's military held a funeral procession for leader Kim Jong-il, led by his successor son Kim Jong-un, in Pyongyang. Courtesy of Reuters.
The casket bearing Mr. Kim's body was carried atop a black limousine covered in white chrysanthemums, the flower used for mourning in both Koreas. Several dozen other sedans followed behind, carrying members of Mr. Kim's family and leaders of his authoritarian government.
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Mr. Kim's third son, Kim Jong Eun, walked at the right-front corner of the limousine during brief ceremonies on the palace grounds before and after the procession, which lasted about two hours.
Kim Jong Il's brother-in-law Jang Song Thaek and several generals who were close to him also flanked the car during the ceremonies at the palace, reinforcing other TV images since his death that his son, who is now expected to take control of North Korea, is being protected and guided by his associates.
And, the crying began in earnest along the funeral procession.
It's a Crying Shame (Click To Enlarge Images)
Even the ruthless dictator's youngest sun Kim Jong Eun who takes over for his departed father cried too. He's crying because he is taking over the reins of power, and probably thinking, "Oh, shit, I'm in charge now."
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Choi Jong-kun, professor of international relations at Yonsei University in Seoul said.
"The point they're trying to make is the leadership is pretty stable. The key thing they want to put out is that succession is going smoothly."
North Korea provided few details about the event and its state-run news agency didn't release information about it until TV broadcasting began, which was at least two hours after it started. Some South Korean TV stations relayed the North's broadcast of the procession for about an hour, then returned to regular programming.
The coverage occasionally showed mourners along the procession route speaking fondly of Kim Jong Il. The mood appeared predominantly somber and calm, although North Korean TV cameras picked out some scenes of people doubled over and even flailing their arms in apparent anguish.
A woman soldier whose name wasn't given said on the North Korean broadcast said.
"The falling snow brings me even more tears because of thoughts about the general's toils. It's as if my heart is being torn to pieces."
The event clearly stretched the capabilities of North Korea's TV broadcaster, one of the chief manufacturers of the regime's projection of might and power. The organization didn't have enough cameras and transmission equipment to cover the motorcade route, resulting in several long stretches in which the procession was out of view. During those times, the broadcaster simply showed shots of crowds waiting for the procession. The 40-kilometer route took the motorcade through much of central Pyongyang .
The procession resembled the one held after Kim Il Sung's death in 1994. At that time, Kim Jong Il walked beside his father's hearse, which appeared to be the same vehicle used Wednesday.
North Korea plans a nationwide memorial event at noon Thursday, when citizens will be asked to observe three minutes of silence. After that, gun volleys will be fired in Pyongyang and nine other provincial capitals, and vehicles will blow whistles, horns and sirens in a final salute.
North Korean state TV broadcast a two-hour tribute to Kim Jong Il on Wednesday morning, chiefly showing images of him as a young man.
Many of the images appeared to be from the 1970s and '80s, when Mr. Kim was rising up in his father's government and aiming to secure his role as the country's eventual leader. The last 30 minutes of the broadcast were devoted to his time as leader.
A narrator said as the image showed Mr. Kim handling products like toilet paper and children's clothes.
"He always took responsibility for the living of all people. He always took care of all North Korean people with his warm love."
COMMENTARY: The death of Kim Jong Il does not end of pain and suffering that the Kim family has inflicted on its people. An estimated 1 million North Koreans are imprisoned in Russian-style gulags where they work as slaves and hundreds them die every day of exposure and starvation. Let there be no doubt, that although the North Korean people are crying for their fallen dictator, they are probably deeply relieved he is gone. But, don't hold your hopes. His son Kim Jong Eun is a real work of art from what I have read. Kim Jong Il by-passed his two older brothers because they lacked the "meanness," wanted in a future leader and dictator. I have a feeling we will be hearing from him very soon, as he tries to proove himself to his little rat rogue nation. In a previous blog post dated December 20, 2011, I reported on Kim Jong Il's death, and you can see more images of the young pudgy new dictator.
BEIJING—Chinese telecommunications-equipment maker Huawei Technologies Co. said Friday it plans to scale back its business in Iran, where the company provides services to government-controlled telecom operators, in the wake of reports that Iranian police were using mobile network technology to trace and arrest dissidents.
Shenzhen-based Huawei will "voluntarily restrict its business development there by no longer seeking new customers and limiting its business activities with existing customers," according to a statement on the company's website. It said the company was making the move due to "increasingly complex situation in Iran," but did not elaborate.
The Wall Street Journal reported in October that as Western companies pulled back from the Iranian market in the wake of the crackdowns, Huawei won more contracts in the country. Iranian human-rights organizations outside Iran say there are dozens of documented cases in which dissidents were traced and arrested through the government's ability to track the location of their cellphones.
WSJ's Steve Stecklow has the story of Chinese telecom firm Huawei, which dominates Iran's government-controlled mobile industry. Photo: AP Photo/Kin Cheung
Huawei's move marks the first time a Chinese company has decided to scale back its business in Iran, increasing pressure on the country, according to Mark Wallace, president of United Against Nuclear Iran and a former U.S. ambassador to the United Nations. Iran is under global sanctions for allegations it is developing a nuclear weapons program. Iran has denied this.
Mr. Wallace said.
"This is a significant milestone. For the first time a major Chinese business is pulling back from Iran in the face of mounting international scorn for Iran's brutal regime."
Huawei said it plans to continue servicing its existing Iranian contracts. The company statement said.
"For communications networks that have been delivered or are under delivery to customers, Huawei will continue to provide necessary services to ensure communications for Iran's citizens."
The Journal reported on Oct. 27 that Huawei had recently signed a contract to install equipment for a system at Iran's largest mobile-phone operator that allows police to track people based on the locations of their cellphones, according to interviews with telecom employees both in Iran and abroad, and corporate bidding documents reviewed by the newspaper. The company also has provided support for similar services at Iran's second-largest mobile-phone provider. Huawei noted that nearly all countries require police access to cell networks, including the U.S.
The Iranian government had stepped up surveillance of its citizens with the help of foreign technology after a bloody crackdown by authorities on antigovernment protests following a controversial election in 2009.
Huawei's announcement could help the company boost its image in the U.S., where Huawei executives complain the company has been unfairly restricted in the market, despite having forged partnerships with major operators across Europe and the Middle East, and in Canada, and rising quickly over the last several years to become the world's second largest provider of telecommunications equipment, after Sweden's Telefon AB L.M. Ericsson.
U.S. regulators have blocked Huawei's bids on major telecommunications infrastructure projects as well as acquisitions of American companies over security concerns, and the White House and Congress have both recently launched investigations into national security threats posed by foreign telecommunications firms, particularly worries that equipment from Huawei and other Chinese companies into U.S. systems could potentially be used to track or intercept communications.
Founded in 1987, closely held Huawei said earlier this year that it expects revenue to grow 10% in 2011 to reach $31 billion, slower than the 24% growth it saw in 2010, in part because of blocks on its expansion into the U.S.
COMMENTARY: In a blog article dated October 27, 2011, I profiled China's wireless telecomm giant Huawei Technologies and their zeal to land a contract to upgrade Iran's wireless telecommunications infrastructure.
Huawei has operated in Iran's telecommunications industry since 1999, according to China's embassy in Tehran. Prior to Iran's political unrest in 2009, Huawei was already a major supplier to Iran's mobile-phone networks, along with Telefon AB L.M. Ericsson and Nokia Siemens Networks, a joint venture between Nokia Corp. and Siemens AG, according to MTN Irancell documents.
In 2008, the Iranian government began soliciting bids for location-based services for the largest mobile operator, TCI's Mobile Communication Co. of Iran, or MCCI. A copy of the bidding requirements, reviewed by the Wall Street Journal, says the contractor "shall support and deliver offline and real-time lawful interception." It also states that for "public security," the service must allow "tracking a specified phone/subscriber on map."
According to a Huawei Technologies manager in Tehran, the company signed a contract in 2011 to provide equipment for location-based services to MCCI in the south of Iran and is now ramping up hiring for the project.
Huawei's decision to scale back business in the Islamic Republic of Iran is a public relations ploy and nothing else. It is has already landed a huge contract with MCCI, Iran's largest wireless carrier, so "scaling back" business is strictly for public consumption. Huawei continues support existing Iranian customers and staffup in order to comply with its MCCI contract to provided managed services. That's not scaling back.
Huawei knew what it was bidding on, it met Iran's requirements, and is now having "contractor's remorse." It's something of a joke, wouldn't you say. It suddently realizes that doing business with a rogue nation like Iran is bad for business, and could affect its bidding in other countries.
The U.S. has already blocked Huawei from bidding on any contracts in the U.S. or making any acquisitions. But, what Huawei should do, if it had any corporate ethics or values at all, is pull its operations out of Iran completely to demonstrate its outrage for Iran's violent crackdown on political dissedents and solidarity with the demonstrators.
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