jabil china report.qxp

JABIL FACTORY IN CHINAProducing for Whirlpool, GE, HP

How the Research was Done

Private researchers from a sophisticated investigatory company in China carriedout the research at the Jabil Circuit (Guangzhou) Limited Factory. The NationalLabor Committee supplied them with questions and overall guidance, whichincluded considerable follow-up. Worker interviews were carried out both insideand outside the factory compound. Along with internal company documents, theprivate investigators were able to provide cell phone photographs taken on theshop floor, as well as in the workers’ dorms and cafeteria.

In their summary remarks, the team of investigators noted that the Jabil factoryhas a lot of money and influence in the Guangzhou region. Jabil’s focus is exclu-sively on meeting and raising production goals. The 6,000 or so employees atJabil must bend to whatever management wants.

Acknowledgements:

Report: Charles KernaghanResearch Jonathann Giammarco

Barbara Briggs

Report design:Kenneth CarlisleCover design Aaron Hudson

Additional research was carried out by NLC interns:Sean CookseyKathleen SeufertElana Szymkowiak

U.S.-Owned High Tech Jabil Factory in ChinaRun Like Minimum Security PrisonProducing for Whirlpool, GE, HP


National Labor Committee ● Jabil China Report I

TABLE OF CONTENTS

PREFACE: A Social Hurricane is Forming in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .II

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .III

COMPANY PROFILE: Jabil Circuit (Guangzhou) Limited . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Jabil Has a Big Footprint in China, But Fails to Raise Standards . . . . . . . . . . . . . . . . . . . . . . . .5

Cruel and Inhuman Treatment at Jabil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4- Standing 12 Hours a Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4- Management’s Philosophy is to Break the Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5- Complaints of Constant Stress and Anxiety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5- Even Lower Level Managers Crack under the Constant Pressure . . . . . . . . . . . . . . . . . . . . . . .6- Managers and Security Guards Patrol the Shop Floor like Police . . . . . . . . . . . . . . . . . . . . . . .7

Grueling 12-hour shifts, seven days a week are the norm . . . . . . . . . . . . . . . . . . . . . . . . . . . .8- Even lunch and supper “breaks” are no real breaks at all . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12- One bathroom break in an eight-hour shift . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

No Right to Know . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

A Chinese Activist Speaks out on Foxconn and Honda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

Pitting Temps against Full Time Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Jabil Union Phony as a Three Dollar Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

Company Dorms: Six Workers to a Room Sleeping on Bunk Beds . . . . . . . . . . . . . . . . . . .20

Seventy-five Percent of the Workers say the Company Food is “Awful” . . . . . . . . . . . . . . .22

Wages: With Subsidies, Jabil Pays Above the Minimum Wage and Meets Legal Benefits . . . . . . .24

Attachment: Full list of Jabil Circuit Inc. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26

National Labor Committee5 Gateway Center, 6th Floor

Pittsburgh, PA 15222Tel: 412-562-2406 www.nlcnet.org nlc @nlcnet.org


PREFACE

A Social Hurricane is Forming in China

By a respected Chinese worker rights activist and scholar,who must remain anonymous

On the surface, companies like Jabil look clean and high tech. It seems well-run.But people looking in from the outside do not realize that the workers at Jabil are nottreated like human beings. The workers must obey all demands from the factory andhave absolutely no right to express disagreement. The workers are seen as compo-nents of a machine. During the entirety of their 12-hour shift, they are stripped oftheir humanity. They are not allowed to have their own personalities, feelings,desires or needs—even using the bathroom. For every second of every minute, theyare controlled and ruled over by a prison-like management system.

In general, living conditions for the Chinese people have not fundamentallyimproved. Statistics published by scholars and even by the government show thatunfairness and inequality in Chinese society is getting worse. The relationshipbetween management and labor is becoming more and more unbalanced. Conflictsbetween workers and management are becoming more frequent and more intense.

This means that if the current model of production in China does not significantlychange, the workers will not be able to take it any longer, and social stability willtake a major blow. We have reached the point where China’s old policies mustchange. China must allow workers to form independent unions and must begin torespect international human and worker rights standards, including the internationallabor conventions. Oppressing workers who are fighting for their rights is not onlymaking the antagonistic relationships between workers and corporations much worse,it is also setting the workers up in an antagonistic relationship with the government.I feel that a social hurricane is forming in China.

National Labor Committee ● Jabil China Report II


EXECUTIVE SUMMARY

Another Hi-Tech Sweatshop in China:U.S.-owned Jabil Circuit Factory

Run like a Minimum Security Prison

Producing for Whirlpool, GE, HP, Nokia and others

Six thousand workers, operating around the clock, with two 12-hour shifts, sevendays a week. Workers are at the factory 84 hours a week.

Workers are prohibited from sitting down and must stand for their entire 12-hour shift.Their necks, shoulders, arms and legs become stiff and sore, and their feet swell.

Workers are allowed to use the bathroom just once in the regular eight-hour shift. Asthere are just three “toilet passes” per line, women say they have to wait over an hourto relieve themselves.

Workers paid a base wage of 76 cents an hour through April, when they received a 17cent increase to 93 cents an hour. No one can survive on the base wage and all areforced to work overtime.

Security guards and managers patrol the shop floor as if they are police overseeingtheir prisoners. Workers who make a mistake are forced to write a “letter of repen-tance” begging forgiveness—which they must read aloud in front of all their co-workers. Offending workers can also be made to stay after work, unpaid, to cleantoilets.

Six workers share each crowded dorm room, sleeping on double-level bunk beds.Seventy-five percent of the workers say the factory food is “awful.”

Jabil has 18 factories across China, which is more than they have in the U.S.

What happened to all the promises U.S. companies made—that if they could set upoperations in China, by their very example they would lift standards and increase respectfor human, women’s and worker rights? Instead, U.S. companies have bought into theChina factory model of exploitation, low wages, grueling hours and no rights.

There are signs that China’s workers have had enough, and more are beginning tofight back.

National Labor Committee ● Jabil China Report III


Jabil Circuit (Guangzhou) Limited Inc.128 Juncheng StreetGuangzhou, GuangdongCHINA

Jabil Circuit, just one of 18 high tech Jabil factories across China, is housed in theEastern District of Guanzhou’s economic development zone.

The Jabil Circuit factory in Guangzhou has an estimated 6,000 or more workers.The factory, which produces circuit boards, is organized by clients and broken intowork cells with separate assembly lines. The work cells are run as semi-autonomousbusinesses.

Whirlpool consistently accounts for the highest amount of production at the JabilCircuit factory. Other major clients include GE, HP, Emerson and Nokia. Cisco,Xerox, Siemens, Intel, Lucent, Philips, Cannon, Samsung and a handful of othercompanies’ products are currently manufactured at Jabil Circuit.

In its recruitment efforts, Jabil targets women and men, 18 to 35 years of age, whoare in good health and have at least a middle school education, which is the equiva-lent of completing the 9th grade in U.S. schools. Jabil’s advertisements highlightthat, “The company hands out milk and fruit each week.”

Jabil Circuit Inc., headquartered in Florida, is the parent company.

National Labor Committee ● Jabil China Report 1


Jabil Circuit Inc.10560 Dr. Martin Luther King Jr. Street NorthSt. Petersburg, Florida 33716

Phone: (727) 577-9749Fax: (727) 579-8529www.Jabil.com

President & CEO: Timothy Main

Worldwide, Jabil’s largest customers include Hewlett-Packard, IBM, Cisco Systemsand Nokia.

In fiscal year 2009, Jabil reported 11.7 billion in net revenues. Worldwide, Jabil has61,000 employees.

Jabil Circuit is an S&P 500 company dedicated to the manufacture of printed circuitboards.

Jabil owns and operates 18 factories in China. In the United States, Jabil has 13 fac-tories, including Jabil Defense and Aerospace Services. At least three of Jabil’s U.S.operations appear to be financial services. There are three Jabil Circuit factories inthe United Kingdom and, oddly enough, seven Jabil facilities in the tiny BritishVirgin Islands. Among other countries, Jabil also has three holding companies in theCayman Islands. (Full list of Jabil facilities attached at the end of this report.)



Jabil has a Big Footprint in China,But Fails to Raise Human and Worker Rights

Standards

The Jabil Circuit factory in Guangzhou is just one of a total of 18 plants Jabil hasacross China. Jabil has more factories in China than it does in the United Statesor any other country.

With its 18 factories across China, Jabil is certainly in a strong position to at leastmoderately improve human and worker rights conditions for their Chinese work-ers. But this has failed to happen. Jabil operates its large Guangzhou plant like aminimum security prison. Jabil’s employees have no voice, no rights, no respect,and are basically appendages to the machines they toil on.

It was not so long ago, during the debate on extending Permanent NormalizedTrade Relations to China, that U.S. multinationals were telling the American peo-ple that if they could set up operations in China, their very presence would lifthuman and worker rights standards across China. The companies would accom-plish this by the example of how they ran their factories. U.S. corporations actu-ally claimed that they would do the heavy lifting and would be the best ambassa-

dors to promote the rights of Chinese workers.

Too often words are cheap. The reality is that toomany U.S.-owned companies, like Jabil, are runlike a prison within a prison. The larger prison isChina’s police state, while the factories—exportingto the U.S.—are run like minimum security jails.



Cruel and inhumantreatment at Jabil

The Jabil factory in Guangzhou has beenbooming for months, working around theclock, 24 hours a day, with two 12-hourshifts, seven days a week to meet productiondemands. Many workers are at the factory84 hours a week.

Standing 12 hours a day:At least 90 percent of Jabil’s assembly lineworkers are prohibited from sitting and areforced to stand for the entire 12-hour shift.Standing all day, with their shouldershunched over and necks constantly bentdownward, the workers’ hands and fingersrace furiously to insert components into thecircuit boards as they speed down theassembly line. Standing all day, the workersreport that their arms and legs become soreand stiff. Their feet swell and they sufferfrom blisters and peeling skin. Sometimestheir necks hurt so badly they fear that themay be permanently damaging their verte-brae.

At the end of the 12-hour shift, their legs andarms are so stiff that at first they have troublewalking or moving their arms.

The workers repeat the same motions, all day everyday. Everyone agrees that their work is mind-numbing and boring, while at the same time theyhave to race to keep up with the assembly line.

Standing for the 12-hour shift is exhausting, gru-eling and difficult to bear, and the long hoursleave the workers disoriented and dazed.


Jabil Circuit has 18 factories in China

Jabil Circuit (Guangzhou) Ltd. (China) Jabil Circuit (Beijing) Co. Ltd. (China) Jabil Circuit (Shenzhen) Co. Ltd. (China) Jabil Circuit (Shanghai) Co. Ltd. (China) Jabil Circuit (Suzhou) Ltd. (China) Jabil Circuit (Wuxi) Co. Ltd. (China)Jabil Circuit Investment (China) Co., Ltd. (China)Universal (Tianjin) Mold & Plastic Co., Ltd. (China) Westing Green (Tianjin) Plastic Co., Ltd (China)Green Point (Tianjin) Electronic Technology Co., Ltd.(China) (Jabil indirectly owns 71% of this entity) Green Point (Wuxi) Electronic Technology Co., Ltd.(China) (Jabil indirectly owns 71% of this entity)Green Point (Tianjin) Plastic Co., Ltd. (China) Green Point Precision (Nanjing) Co., Ltd. (China) Green Point (Tianjin) Precision Electronic Co., Ltd.(China) Green Point (Yantai) Precision Electronic Co., Ltd.(China) Green Point Technology (ShenZhen) Co., Ltd. (China) Green Point (Suzhou) Technology Co., Ltd. (China) Green Point Technology (Wuxi) Co., Ltd. (China)

Source: Jabil Circuit Inc. 2009 SEC filings, FORM 10-K


Management’s Philosophy Is to Break the WorkersWorkers say the following incident is common. A young woman on theWhirlpool assembly line was recently singled out and cursed by the line manager:

“Damn it. You’re always so slow. When are yougoing to work harder? You want money, but you’renot willing to work. What are you even doing here?

The workers know exactly what is going on, but theyare powerless to oppose it. Management consciouslyabuses and berates those workers—especially youngwomen—who are shy and would never think of argu-ing back. By publicly abusing these women in frontof their co-workers, management is able to assert theirauthority before all the workers. “The goal,” oneemployee explained, “is to belittle the workers, keepthem afraid, and make sure they jump to their work.”

Everyone learns that to stay working, they have nochoice but to lower their heads and take these abuses from the managers. Theymust swallow their anger. No one dares argue with the managers, knowing that ifthey did, the managers will make their liveseven more miserable.

Complaints of ConstantStress and AnxietyWorkers on the production line have to moni-tor each others’ work, checking that the previ-ous worker did not make a mistake. To testthe workers, management sometimes purpose-fully slips in poorly-done products and sendsthem down the assembly line to see if theworkers pick up the defects. If they fail topick out the defective parts, or if they make amistake in their own work, the workers can bescolded, given a “written warning,” forced to


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write a “letter of repentance,” forced to work unpaid for one or two hours to cor-rect and redo their mistakes, or they can be ordered—again unpaid—to remain tosweep and clean the factory or bathrooms. There are also fines and demerits, andworkers can even be punished for having a “bad attitude.”

Receiving a “written warning” means the worker cannot receive an advancementor wage increase for the next six months.

A “letter of repentance” is meant to humiliate the “offending” worker, who mustacknowledge their production error, beg forgiveness and pledge that they willwork better in the future. The morning after the offense, in front of their entireproduction line, the guilty worker must read aloud her “letter of repentance.”Workers report that such “letters of repentance” are common, at least once ortwice a week per assembly line.

Even Lower Level Managers Crack under theConstant PressureA group of workers overheard a quality control manager crying over the phone toa friend:

“On the production line, I can’t take my eyes off the circuit boards. I’m so afraidof there being flawed products and being dragged off the line and scolded by mymanager. At the end of the day, we are just falling apart. They force me to writeletters of repentance. I don’twant to do this job. Every time Irequest a transfer to anotherworkstation, I get refused.”

For the workers, it is even worse.They leave their shifts complete-ly drained. One womanexplained:

“My nerves are stretched everysecond of the shift and everyounce of my effort is spent on the


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products. When I get off work, my nerves feel like a rubber band stretched to thebreaking point. I feel dazed. I have no energy and no interest in doing anythingin the little personal time I have.”

Managers and Security Guards Patrol the ShopFloor like Police Looking Over Their Prisoners

Managers and security guards patrol the work areas carrying digital cameras. Ifthey suspect a violation, they take a picture and issue a “warning letter.” Pittingworker against worker, security guards have the power to advise the HumanResource department to fire certain workers.

Especially during the night shift, from 7:00 p.m. to 7:00 a.m., security guardspatrol the work rooms. If they see someone who is lethargic or doing anythingunrelated to their work, the guard notifies the Human Resource department. If aworker is “guilty”—for example—of nodding off for a few seconds, even if theyhave worked at the factory for years, they will be fired with no other compensa-tion than the back wages owed them.

Workers who leave their workstations without permission are either given a “writ-ten warning” or they are markedabsent and docked the entire day’swages.

There are also constant and arbitraryproduction line speed-ups.


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“Human Development”

“Jabil is all about advanced technologyand cost-efficient manufacturing, butwe also believe investing in ouremployees through development pro-grams will allow them to reach theirfull potential. These projects exploredempowerment, new methods and skillsdevelopment.”

--Jabil, 2009 Annual Report


Grueling 12-hour shifts, seven days a week arethe normThe Jabil Circuit factory is almost always busy, but starting in April through June,Jabil is operating around the clock, 24 hours a day with two 12-hour shifts, sevendays a week. This is cer-tainly the case withWhirlpool, GE, HP,Emerson and Nokia, but itis true of many other linesas well.

Right now, none of theassembly lines in the planthave fixed days off eachweek, and some lines havegone for months without asingle day off. Only occa-sionally will productionline workers receive a dayoff. At other times, man-agement may allow different groups of workers on the same line to alternate tak-ing a day off.

Single day shifts are also very rare. Most lines are operating around the clock.

The day shift runs 12 hours, seven days a week. This schedule puts the young work-ers at the factory 84 hours a week, while actually toiling 77 hours. To avoid over-crowding, with the 6,000-plus Jabil employees, the beginning of the day shift is stag-gered five minutes apart, beginning at 6:35, with the last group beginning at 7:00 a.m.

12-Hour Shift(7:00 a.m. to 7:00 p.m.)

7:00 a.m. to 11:00 a.m. (Work, 4 hours)11:00 a.m. to 11:30 a.m. (Lunch, half hour)11:30 a.m. to 5:00 p.m. (Work, 5 ½ hours)5:00 p.m. to 5:30 p.m. (Supper, half hour)5:30 p.m. to 7:00 p.m. (Work, 1 ½ hours)



This means the workers put in 11 hours of work each day –eight regular and threeovertime hours—with just two 30-minute meal breaks. As the regular workweekis 40 hours, these workers are toiling 37 hours of overtime each week, which isin blatant violation of China’s overtime restrictions, which limit overtime to nomore than 36 hours a month. Jabil’s day shift workers are exceeding China’slegal overtime limit by a staggering 344 percent!

With the night shift, it is even worse, since the workers receive just one 30-minute meal break between 12:00 midnight and 12:30 a.m. This means the nightshift is regularly working 80 ½ hours a week, including 40 ½ hours ofovertime, which exceeds China’s legal limit by 387 percent!

On the night shift, after the meal break ends at 12:30 a.m., management oftenplays loud music to prevent the workers from getting drowsy.

The very best the workers can hope for is that the press of orders slows downenough so that they can receive two Sundays off a month. But even this dream ofreceiving two days off a month puts the day shift workers at the factory an aver-age of 78 hours a week, while working 71 ½ hours. This schedule also exceedsChina’s permissible overtime hours by 279 percent. On the nightshift, thehoped-for two nights off a month would put the workers at the factory an averageof 78 hours a week, while working 74 ½ hours, including 34 ½ hours of over-time, which exceeds the legal limit by 315 percent.



In April, some Whirlpool production lines worked 84 hours a week, including44 hours of overtime, exceeding China’s legal limit on permissible overtime by428 percent!

In January, February and March of 2010, Jabil workers reported working a mini-mum of 63 hours a week, with 68-plus hours a week being more the norm.

One woman in a Whirlpool linetold the private investigators thatfrom June through October 2009,she received just four days off inthe five-month period. Three dayswere for national holidays, whichthe workers almost always receiveoff. In addition, she received oneSunday off in five months.

This same woman received justthree days off in November andtwo in December 2009.

Jabil management does not say asmuch, but for all practical purposes the workers know their overtime is obligatory.For example, if a worker tries to take a Saturday or Sunday off to take care ofpersonal needs, they will be treated harshly by their managers. It is common thata worker who asks for a day off will receive a “written warning,” which blocksthe worker’s chances for promotion or a wage increase over the next six months.

Managers also yell at workers asking for a day off.

“Who comes out here [to Guangzhou] to work and doesn’t expect to be tired?When there is no overtime, you complain that you don’t earn enough and that youwant to work more overtime. Now that you work overtime, you complain that youare too tired! If you don’t want to work overtime, then don’t do it. Just workeight hours a day and forget Saturday and Sundays.”

Another worker explained:

“We work 12 hours a day and are completely exhausted. The amount of overtime



we work leaves us in a daze, but if we work just eight hours a day, then ourwages are pathetically low.”

Every worker at Jabil knows that they cannot possibly survive working just eighthours a day, since their base wage does not come even close to meeting theirmost basic subsistence needs.

The actual work shift is even longer than it appears. It is mandatory for workers toreport at least 15 minutes before their official shift begins. First they have to changeout of their street clothing and into their work uniforms, queue up to punch theirtimecards, and then attend a 10 to 15-minute meeting in which line managers give apep talk on product quality and workplace discipline and vigilance. At the end of theshift, there is another 10 to 15-minute meeting to recap and evaluate the day’s pro-duction and how to improveon it. This adds a half-houreach day to the workers’shift, which is unpaid.When they are workingseven days a week, theunpaid, mandatory meetingsadd another 3 ½ hours totheir already grueling shifts.

Even at the unpaid meet-ings, managers treat theworkers in a rough andcrude manner. One workerrelated the following:

“Today, after our shift, we were listening to the quality control manager talk. Hecaught me looking around and, in front of everyone, yelled at me, calling me a‘rotten fish’!”

There is also one two-hour mandatory meeting each month, which is also unpaid.At the meeting, workers are allowed to talk, to discuss problems and suggestchanges. But in the end, the workers say it amounts to nothing more than themanagers pretending to listen to the workers, since nothing ever changes. Fortheir part of the meeting, managers encourage the workers to work harder, andthen make some announcements and updates.



Even lunch and supper “breaks” are no realbreaks at allImagine working 12 ½ hours a day, including the obligatory, unpaid meetings atthe beginning and end of each shift, seven days a week, standing all day, whileracing to meet mandatory production goals. One can only imagine how muchthese workers look forward to their two breaks.

But the half hour breaks the work-ers are allowed for lunch and sup-per turn out to be no real breaks atall. It is really a mad dash, sincethe workers have just 30 minutes togo through a security check, queueup to punch their timecards, changefrom their work uniforms intostreet clothes, go to the bathroom,race to the cafeteria, queue up forfood, eat, and then repeat theprocess in reverse—and do all thisin just 30 minutes! Workers haveso little time that they must gulpdown their food as quickly as they

can. Workers do not have enough time to eat the factory food they are paying for.



The workers say that often they scald their mouths trying to quickly swallow theboiling hot noodles. On top of that, 75 percent of the workers surveyed said thatthe factory’s food was “awful.”

It is accurate to say that in their 12 ½ hour shift, the workers have no real breaksat all. It is no wonder that they are dazed and exhausted at the end of the shift.

One bathroom break in an eight-hour shift“These regulations are not made by a human being.”

-Whirlpool line worker

Workers must receive permission and be handed a “bathroom pass” in order touse the toilet. During working hours, they are allowed to use the toilet just one

time in the regular eight-hour shift.And when they leave the assemblyline, they must place a sign at theirworkstation saying “Gone fromWork Station.” Workers also haveto sign themselves in and out in theattendance book which recordseach worker’s comings and goings.Under no circumstances can work-ers be away from their stations formore than ten minutes.

If they lose the bathroom pass, theworker is fined 50 RMB ($7.32),which is nearly a day’s pay.

On each of the Whirlpool lines, which have 150 workers per line, there are onlythree bathroom passes for each line.

There are times when workers must wait their turn for over an hour before finallyreceiving the pass to use the toilet. The women say it is especially miserable forthem when they are having their period.


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In addition, the women’s bathroom is small and the women frequently have toline up to wait their turn for a free stall. Often they yell at each other to hurry up,as the ten-minute time limit is closing in on them.

Whirlpool has three assembly lines with a total of 450 workers, and during verybusy periods, the number can rise to 500. Workers say the same boss overseestwo production modules, Whirlpool and Ericson.

No Right to Know

Jabil management classifies certain job categories as “special work stations,”which merit a 50 RMB ($7.32) stipend a month. The “special work stations”usually involve welding, tin soldering, lubrication and cleaning. Worker turnoveris very high in these jobs. There are many production lines in a single work

room, with workers packed densely together. Smoke andvapors do drift across the work room. For example, the tinsoldering work on circuit boards gives off a foul smellingodor.

Many workers complain of rashes and allergy-like skinproblems on their faces. Workers handling ethanol alsodevelop skin rashes.

However, following the Jabil management model, workersare prohibited from even asking about the chemicals theyare handling and what may be causing their skin rashes.

When one worker dared ask his manager what might becausing the skin rashes, the manager shot back: “If youare not willing to follow orders, then get out of here anddon’t come back.”


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Chinese Activist Speaks OutOn Foxconn and Honda

Regarding the increase in the Foxconn workers’ wages:

Of course, the wage increase was entirely due to the suicide workers’ passive and nihilisticstyle of resistance (jumping off the buildings). But we feel that the low wages were not thesole cause of the surprising numbers of suicides. The main underlying cause of the Foxconnsuicides was that the factory tried to turn its workers into robots and attempted to strip awaytheir humanity. The workers are seen as components of a machine. The workers whojumped could not stand the inhumane treatment at the factory, and they were overcome withdespair.

Workers at Foxconn are subjected every day to long-term levels of high-stress labor andextremely strict military-style discipline and management. They live in an environmentwithout the most basic levels of human warmth or social interaction, and deal with heavysocial pressure (for example, young men who can’t marry without a certain amount ofmoney) and family poverty. Moreover, the workers are provided with little space for person-al development. All of these factors have contributed to the tragedy of the Foxconn suicides.

Workers are human beings and need to live like humans. Mere existence is not enough!Company owners need to understand that increasing wages is not enough. Workers needrespect and happiness.

The owners of Foxconn have plundered an unlimited supply of wealth from their workers’bodies. Now, what they are offering back is a pathetic amount. While they are willing togive the workers a little money, they are not willing to allow the workers to have quality oflife. As a result, the tragedy of Foxconn will not end.

The 30 percent plus increase in Foxconn workers’ wages does not signify that Foxconn istreating the workers fairly. Putting aside the fact that relentless inflation in China diminish-es this wage increase in real terms, it must be stated that it is not Foxconn’s shareholders’sole place to determine workers’ wages. Wages should be determined by the democraticallyelected leaders of an independent Foxconn workers’ union in consultation and negotiationwith the company management. Foxconn should respect the workers’ right to organize andcollectively bargain.

Regarding the strike at Honda, we feel that this is an event of historic proportions. This strike is not a pure struggle over money, but also involves demands to reform the work-ers’ union. It reflects the fact that the struggle of China’s working class (made up of mostlymigrant laborers) has developed to the stage where workers are demanding organization.We are closely monitoring the development and aftermath of this situation. The Honda strikehas huge significance for China’s workers. Many Chinese workers are closely following thisstrike. Recently, over the last few months, the price of food and housing in China hasshown a continuous rise. The government has published the increase in price index as 3%.We have trouble believing this number. Workers have seen a noticeable and constant drop inthe value of their wages. For example, many workers frequent small fast food restaurantsand stalls. In 2009, 5 RMB could buy a meal in a fast food restaurant. Now, you need atleast 7 or 8 RMB for an equivalent meal.



Pitting Temps against Full Time Workers

On the basis of several randomsurveys carried out by our investi-gators, it appears that at leasthalf—if not more—of the 6,000workers at Jabil are hired astemps, or dispatch workers, as theyare called in China. Jabil uses thetemps to fill full-time positions,keeping them on for more than sixmonths and often for over a year,or even several years. The prob-lem here is that it is illegal underChina’s labor laws to employ tem-porary workers for more than sixmonths. But, this does not stopmanagement from pitting the ille-gal temps against the full-timeworkers, egging them on that ifthey work “harder” and “faster”they too can become full-timeworkers. The temps know this isjust a ploy to get them to “kill



themselves, working even harder.” One temporary worker told our researchersthat their only hope of gaining full-time status is “if we cower before our man-agers.” That is the secret to success.

What Jabil is doing is completely illegal. China’s contract law clearly stipulatesthat dispatch workers can only be hired on a temporary basis and cannot be usedfor periods of more than six months. If management keeps these workers at theplant for more than six months, they must be formally hired as full-time workers.

Jabil has arrangements with a large number of different dispatch agencies to sup-ply temporary workers. These agencies include: Jainzhi, Guangzhou Talent,Lide, China Talent, Safen, Taisuosi, Qi Fang and Ruiqi

Most temporary workers, especially males, must pay a placement fee to theemployment agency of up to 500 RMB ($73.20) to be hired at Jabil. This is alsoillegal, as China’s contract law clearly states that employment agencies cannotcharge workers for placements.

What upsets the temporary workers most of all is that they are paid less than full-time workers to do the exact same jobs. Temporary workers start out with aslightly lower base wage than full time workers--$128 a month as of April 2010as compared to $132 for full time workers. When they are forced to work over-time on weekends, temps receive an overtime premium of just 50 percent, whilefull-time workers receive a 100 percent premium, or double time. The temps donot receive a night shift differential, whereas permanent workers receive over $30a month. Dispatch workers receive 41 cents a day food stipend, but full timeemployees receive $1.00. Dispatch workers must wait one and a quarter yearsbefore they qualify for a “comprehensive subsidy” of $34 to $37 a month, whilefull timers are paid a $51 a month “comprehensive subsidy” after just their firstthree months. Management does not contribute to the mandatory “housing fund”for the temps, but does so for the full time workers.

It may seem like the wage differences are not that great, but when the workers’base wage does not come even close to providing a minimal existence, workershave to fight for every cent legally due them.

The wage differential is also illegal. China’s contract law states, “Dispatchworkers are to receive compensation equal to that of a company’s regular work-ers.”



Both temps and full-time workers are instructed tojust sign their contracts. Temps sign a contractwith their employment agency and formal workerswith Jabil, which is another violation of China’slabor laws. The contract must be discussed withthe worker and both parties must agree. For exam-

ple, the contract law stipu-lates that an employee cannotbe shifted to another workstation unless it is discussedand the worker agrees.

As can be seen from theattached documents, it isstandard practice at Jabil toillegally employ temporaryworkers for more than a year.

Jabil is so sure of itself that it does not try to hidethese practices.

* One temporary worker from the JianzhiEmployment agency, on theGE line, started working atJabil on January 24, 2007.His pay stub for February2008, printed in black andwhite, shows him at the facto-ry for a little over a year.

* A temp placed by theGuangzhou Employment

agency to work on the Nokia line started on July 24, 2008 and his pay stub showshim still working at Jabil on July 23, 2009.

* A temporary worker on the SMT & MI line, placed by the Reach agency, start-ed on May 28, 2008 and her pay stub shows her still working as of October 23,2009.

* A temp hired by Guangzhou Talent agency and placed at Jabil, started working



on the Adtram line on March 24, 2007. Nearly two years later, her pay stubshows her still working as of February 23, 2009.

Once a dispatch worker is in the Jabil factory, management makes it hard forthem to quit. Temporary workers wishing to leave have to get documents fromJabil, which they must take to their employment agency to be filled out. It iscommon for Jabil to drag out the permission process for three or more months.Even if the temporary worker is finally allowed to quit, he or she will have towait until the following month to receive their back wages.

Jabil Union Phony as a Three Dollar BillJabil management boasts about the All China Federation of Trade Unions localwhich “represents” Jabil’s workers. The only problem is that the internationalmedia recently exposed the All China Federation of Trade Unions (ACFTU) as a

tool of the Chinese Government to sup-press any hint of independent organizing.Officers and staff of the ACFTU recentlyparticipated in beating up striking Hondaworkers. Another problem is that it isalmost impossible to find any workers atJabil who know there is a “union” at thefactory. Random surveys showed thatover 90 percent of the workers inter-viewed had never heard of a union oper-ating at Jabil, and the few who had, saidit had no effect on either their job ortheir life. It “does nothing for anyone,”one worker commented. At most, all theunion does is to occasionally organize

some parties or dances, but even here there is confusion as to whether it is theunion or the company that is staging the parties.

The Jabil union did, however, have six union members help direct traffic inGuangzhou on the morning of September, 2009, as part of “PresentingFriendship …to encourage the civilized development of our district.”

It sounds like admirable work, but the “union” should consider educating its


****


members on China’s labor contract law, on the rights to temporary workers, onthe limitations on overtime and other issues that might improve the lives andworking conditions of the workers.

Employees,

As of October 12, 2009 and October 13, 2008, we had approximately 61,000full-time employees. None of our domestic employees are represented by alabor union. In certain international locations, our employees are representedby labor unions and by work councils. We have never experienced a significantwork stoppage or strike and we believe that our employee relations are good.”Source: Jabil Circuit Inc. 2009 SEC filings, FORM 10-K

Company Dorms: Six Workers to a Room Sleepingon Bunk BedsJabil has several dorm buildings, each with eight floors. The dorms do have ele-vators. Each floor houses 400 to 500 workers. Six workers share each room,

measuring roughly 11 by 24 feet.The rooms appear narrow andcrowded. Other than the bunkbeds, the furniture consists of asmall cabinet for the workers’clothing and a small table with twochairs. There are two ceiling fans,but no air conditioning. During thelong summers, the dorms are veryhot and humid and the fans providelittle relief. The workers say theyoften have trouble sleeping due tothe excessive heat and humidity.

There is a bathroom in each roomwith hot water for washing. There is also a hard line phone, which the workerscan use if they have prepaid phone cards. Each dorm floor has two television



rooms.

On the bottom floor there are tenwashing machines, which theworkers can use free of charge.

By any normal standards, thedorm rooms are primitive.

Each worker pays 80 RMB($11.71) a month for dorm fees,which are deducted from thewages.

Jabil strictly prohibits workers from entering dorms other than their own. Forexample, a worker cannot walk to a nearby dorm to visit a friend. If he or she iscaught entering another dorm, they will be detained by the security guards. Theoffending worker can even be fired. Management claims their strict policy is toprevent theft.

The Jabil compound also has a library, exercise room, ping pong tables, bad-minton and a basketball court –though the workers bitterly comment that working12 hours a day, seven days a week, they have little time to play games or read.

This is a huge issue. The workers feel they are no longer human, but rather justattachments to a machine. There is no way for these young workers to read orstudy, to experience new things, to grow and be excited about their lives.



Seventy-five Percent of the Workers say theCompany Food is “Awful”There are two cafeterias in the Jabil compound, the worst being the Hongjuncafeteria. Workers purchase their food using a magnetic meal card which theykeep charged up. In several random surveys, 75 percent of the workers describetheir food as “awful,” while the other 25 percent said the food “wasn’t too bad.”

Typical cafeteria meals would include the following:

For breakfast: A small bowl of rice gruelaccompanied by another small bowl of pickled orsalted cabbage. Breakfast also comes with asmall steamed bun or a hard boiled egg. The costfor breakfast is 1.2 RMB (18 cents).

Lunch: would typically include stir-fried radish,stir-fried peas, tofu with a small bowl of rice, and

soup. Such a mealwould cost 3.14RMB (46 cents).You can judge howsmall the food por-tions are in com-parison to thesmall spoon on theleft hand side ofthe tray.

A typical Suppercould include stir-fried broad beansand pork with stir-

fried cabbage, along with soup and rice. The soupmay also contain a small piece of meat. A supperlike this would cost 6 RMB (88 cents).

To save money, some workers choose to ordercheaper supper dishes, which cost 3.14 RMB (46



cents) but include no meat.

Workers report spending an average of 323.30 RMB ($47.33) per month on facto-ry cafeteria food. Workers typically spend an additional 200 RMB ($29.28) amonth on snacks they purchase at convenience stores both inside and outside theJabil compound. Their total monthly food costs average $76.61. It is not muchmoney. On average, food costs are just $2.51 a day. However, when the workersadd in their dorm costs of 80 RMB ($11.71) a month, the food and dorm coststotal $88.32 a month. Again, it does not seem expensive until you compare itwith the legal minimum wage of 900 RMB ($131.76), which was in effectthrough April 2010. Primitive dorm conditions and small portions of fooddescribed, at best, as not too bad—consumed 67 percent of the workers’ basewages. Even with the wage increase in May, the new minimum wage is still just1,100 ($161.04), which means that food and dorm costs still consume 55 percentof the workers’ base earnings.

It is very easy to understand why these factory workers are completely dependentupon working excessive amounts of overtime. No one can possibly survive onthe legal minimum wage.

U.S. Trade Deficit with China Keeps Growing

In 2009, the U.S. had a $226,877.2 billion trade deficit with China. Forevery $1.00 we exported to China, China exported $4.26 to the U.S. In justthe first four months of 2010, the U.S. sustained an additional $71,016.2 bil-lion trade deficit with China. In the month of April, on average, Chinaexported $864 million dollars a day of goods to the U.S.

Regarding advanced technology goods, in 2009 the U.S. had a $72.5 billionhi-tech trade deficit with China. In just the first four months of 2010, theU.S. already has an additional $25 billion deficit with China in advance tech-nology goods. At this rate, our trade deficit with China in hi-tech productscould reach 100 billion.

--Source: U.S. Census Bureau, Foreign Trade DivisionData Dissemination Branch, Washington, D.C.



Wages: With Subsidies, Jabil Pays Above theMinimum Wage and Meets Legal Benefits

In May of 2010, the legal minimum wage in Guangzhou City was raised to 1,100RMB ($161.04) per month. This represents a 17 cent-an-hour raise over the pre-vious minimum wage, which was 900 RMB ($136.76). The exchange rate is6.83045 RMB to $1.00 U.S.

Previous Minimum Wage New Minimum Wage(900 RMB per month) (1,100 RMB as of April 2010)

76 cents an hour 93 cents an hour$ 6.06 a day (8 hours) $ 7.40 a day (8 hours)$30.40 a week (40 hours) $37.16 a week (40 hours)$131.76 a month $161.04 a month$1,581.12 a year $1,932.48 a year

As of this writing, we have not been able to review pay stubs reflecting the newminimum wage, as wages are paid one month late. May wages are not paid untilbetween June 7th and 10th.

A random sampling of pay stubs before the April increase shows formal full-timeJabil employees earning an average wage of 1,600 RMB ($234.25) a month--$54.06 a week. Dispatch, or temporary, workers could earn an average of 1,300to 1,400 RMB ($190.32 to $204.96) per month—or $43.92 to $47.30 a week.

The highest wage we saw for a full-time worker was an average of $1.27 an hour.For working a 57-hour week, including 17 hours of overtime, this worker earned$72.25. This worker was paid correctly for the minimum wage as well as forweekday and weekend overtime premiums. He also received six subsidies—mid-dle shift subsidy, night shift subsidy, special work station subsidy, a food subsidy,profit sharing and the comprehensive bonus subsidy. He earned a gross wage of$340.95 a month, which after deductions for dorm expenses and the housingfund, left him with a net wage of $313.09 a month.

A typical dispatch worker could earn a gross wage of $56.37 for working a 63-hour week including 23 hours of overtime. His take-home wage, after deductionsfor dorm, food and the housing fund, was $48.12 for the 63-hour week, for an



average of 76 cents an hour.

Jabil does meet all mandatory legal benefits, including pension, unemploymentinsurance, work injury insurance and the housing fund. Jabil also pays healthinsurance, which is not mandatory under China’s labor laws. The factory also hasa rudimentary clinic for minor illnesses, colds and fevers.

Every worker our investigators interviewed said they could not possibly survivewithout working significant, and often excessive, overtime hours. The base mini-mum wage does not come close to meeting even the most minimum subsistencelevel needs.



ADDENDUM

Jabil Circuit, Inc. Subsidiaries*Ownership is 100% except where designated

Celebit Technology Private Limited (India)Celetronix India Private Limited (India)Celetronix Mauritius Limited (Mauritius)Celetronix USA, Inc. (USA)Digitek Electronics Ltd. (Hong Kong)GET Manufacturing USA, Inc. (USA)Green Point Industrial Co., Ltd., (British Virgin Islands)Green Point International Holding (Cayman) Co., Ltd. (Cayman Islands)Green Point (Tianjin) Electronic Technology Co., Ltd. (China) (Jabil indirectly owns71% of this entity)Green Point (Wuxi) Electronic Technology Co., Ltd. (China) (Jabil indirectly owns 71%of this entity)Green Point (Tianjin) Plastic Co., Ltd. (China)Green Point Precision (Nanjing) Co., Ltd. (China)Green Point Precision Components Co., Ltd. (Taiwan) (Jabil indirectly owns 71% of thisentity)Green Point (Tianjin) Precision Electronic Co., Ltd. (China)Green Point (Yantai) Precision Electronic Co., Ltd. (China)Green Point Precision [M] Sdn, Bhd. (Malaysia)Green Point Technology (ShenZhen) Co., Ltd. (China)Green Point (Suzhou) Technology Co., Ltd. (China)Green Point Technology (Wuxi) Co., Ltd. (China)Green Prosperity Co., Ltd. (British Virgin Islands) (Jabil indirectly owns 71% of thisentity)Jabil (Mauritius) Holdings Ltd. (Mauritius)Jabil Assembly Poland sp. z.o.o. (Poland)Jabil (BVI) II Ltd. (British Virgin Islands)Jabil C.M. S.r.l. (Italy)Jabil Circuit, LLC (USA)Jabil Circuit, SAS (France)Jabil Circuit (Beijing) Co. Ltd. (China)Jabil Circuit (BVI) Inc. (British Virgin Islands)Jabil Circuit (Guangzhou) Ltd. (China)Jabil Circuit (Shenzhen) Co. Ltd. (China)Jabil Circuit (Shanghai) Co. Ltd. (China)Jabil Circuit (Singapore) Pte. Ltd. (Singapore)Jabil Circuit (Suzhou) Ltd. (China)Jabil Circuit (Wuxi) Co. Ltd. (China)Jabil Circuit Austria GmbH (Austria)Jabil Circuit Automotive, SAS (France)Jabil Circuit Belgium N.V. (Belgium)



Jabil Circuit Bermuda Ltd. (Bermuda)Jabil Circuit Cayman L.P. (Cayman Islands)Jabil Circuit Chihuahua, LLC (USA)Jabil Circuit China Limited (Hong Kong)Jabil Circuit China Manufacturing Ltd. (Guernsey)Jabil Circuit de Chihuahua, S de RL de C.V. (Mexico)Jabil Circuit de Mexico, S de RL de C.V. (Mexico)Jabil Circuit Financial, Inc. (USA)Jabil Circuit Financial II, Inc. (USA)Jabil Circuit French Holdings, SAS (France)Jabil Circuit GmbH (Germany)Jabil Circuit Guadalajara, LLC (USA)Jabil Circuit Guangzhou Holding (BVI) Inc. (British Virgin Islands)Jabil Circuit Holdings GmbH (Germany)Jabil Circuit Holdings Ltd (United Kingdom)Jabil Circuit Hong Kong Limited (Hong Kong)Jabil Circuit Hungary Contract Manufacturing Services Ltd. (Hungary)Jabil Circuit India Private Limited (India)Jabil Circuit Investment (China) Co., Ltd (China)Jabil Circuit Italia, S.r.l. (Italy)Jabil Circuit Limited (United Kingdom)Jabil Circuit Luxembourg II, S.a.r.l. (Luxembourg)Jabil Circuit Luxembourg, S.a.r.l. (Luxembourg)Jabil Circuit Netherlands B.V. (Netherlands)Jabil Circuit of Michigan, Inc. (USA)Jabil Circuit of Texas, LP (USA)Jabil Circuit Poland sp z o.o. (Poland)Jabil Circuit Real Estate GmbH (Germany)Jabil Circuit Reynosa, LLC (USA)Jabil Circuit de Reynosa S de RL de C.V. (Mexico)Jabil Circuit Sdn. Bhd. (Malaysia)Jabil Circuit Services Ltd. (Hong Kong)Jabil Circuit Technology LLC (Cayman Islands)Jabil Circuit Technology India Pvt. Ltd. (India)Jabil Circuit U.K., Limited (United Kingdom)Jabil Circuit Ukraine Limited (Ukraine)Jabil Defense and Aerospace Services LLC (USA)Jabil do Brasil Industria Eletroeletronica Ltda. (Brazil)Jabil Global Services de Mexico, S.A. de C.V. (Mexico)Jabil Global Services, Ltd. (Ireland)Jabil Global Services, Inc. (USA)Jabil Global Services Netherlands B.V. (Netherlands)Jabil Global Services Poland sp z.o.o. (Poland)Jabil Hungary LP Services, LLCJabil Industrial do Brasil Ltda (Brazil)Jabil Japan, Inc. (Japan)Jabil Luxembourg Manufacturing S.a.r.l (Luxembourg)



Jabil MPC, LLC (USA)Jabil Netherlands B.V. (Netherlands)Jabil Real Estate Ukraine LLC (Ukraine)Jabil Sdn Bhd (Panyu) Ltd. (Malaysia)Jabil Texas Holdings, LLC (USA)Jabil Turkey Electric Electronic Trade, LLC (Turkey)Jabil Vietnam Company Limited (Vietnam)Jabil, LLC (Russian Federation)JP Danshui Holding (BVI) Inc. (BVI)Mobicom Ventures (BVI), Inc. (British Virgin Islands)Sypro Optics GmbH (Germany)Taiwan Green Point Enterprises Co., Ltd (Taiwan)Taiwan Green Point Enterprises Co., Ltd., (British Virgin Islands)Universal (Tianjin) Mold & Plastic Co., Ltd. (China)Westing Green (Tianjin) Plastic Co., Ltd (China)


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