Nightmare for Dreamliner Part 2: Japan

January 16, 2013

Dreamliner

As noted in a previous post, it does take time to work out technical problems. As aviation analyst Brendan Sobie stated: “There are always teething problems with new aircraft and airlines often are reluctant to be the launch customer of any new airplanes. We saw it with other airplane types, like the A380 but the issues with the A380 were different.” But the situation has been getting worse for Boeing and its Dreamliner with each passing day. On January 16, 2013, pilots smelled something burning and executed an emergency landing of a Boeing 787 in Japan. One person suffered minor injuries while using an exit ramp. The two Japanese airlines that use the Dreamliner both voluntarily pulled the planes from service for further investigation. Below are the announcements from All Nippon Airways (ANA) and Japan Airlines.

[Apology] Operation of ANA692
ANA 692 from Yamaguchi Ube to Haneda, Boeing 787, made an emergency landing at Takamatsu Airport at 8:47 (JST) on Wednesday, 16 January due to technical problem. All 137 passengers and crew were evacuated safely from the aircraft. The event was registered as a serious incident by Ministry of Land, Infrastructure, Transport and Tourism (MLIT). ANA will cooperate fully with the Japan Transport Safety Board, relevant authorities and Boeing to investigate the cause of the incident. All ANA flights operated by Boeing 787 have been cancelled and ANA’s fleet of 787 aircraft will remain grounded further notice.
We sincerely apologize to people concerned for the inconvenience and concern caused by this incident.
Please check your flight status here.
January 16, 2013
All Nippon Airways Co., Ltd.
Inquiries
Please contact ANA International Reservation and Information Center in your respective area.

Apology and Notice: Regarding JAL´s Operations of the 787-8 Aircraft
In response to an incident involving a 787-8 aircraft operated by another airline on January 16, 2013, JAL decided to cancel the operations of our fleet of 787-8 departing Japan the same day and January 17, 2013 to ensure complete safety. Operations of JAL´s 787-8 aircraft from January 18, 2013 will be decided after further assessment of the situation with the investigations.
We sincerely apologize to all customers and related-parties for the inconvenience and concerns caused.
Safety is of utmost importance to Japan Airlines and we ensure that every departing aircraft meets all safety standards before flight operations. Please be assured on your future travel with us.
For the operational status of affected flights, please refer to the following website for the latest updates.
January 16, 2013
Japan Airlines

Boeing’s response was “Boeing is aware of the diversion of a 787 operated by ANA to Takamatsu in western Japan. We will be working with our customer and the appropriate regulatory agencies.”
Below are other statements Japan Airlines has made as a result of problems with the Dreamliner:

Apology and Notice: Cancellation of Flight JL007 on January 7, 2013
On January 7, 2013 (local time), after JL008 arrived at Boston Logan International Airport from Tokyo (Narita) and after all passengers and crew members had disembarked the aircraft, smoke was detected in the aft section of the aircraft’s cabin. The fire department was called and a fire found to be from the auxiliary power unit battery located in the aft electronics bay (outside of the cabin) was extinguished. The outbound flight JL007 scheduled to depart that day was consequently cancelled. The cause of the incident is currently being investigated and additionally, subsequent to the event, Japan Airlines initiated and completed inspections on all other Boeing 787 aircraft in its fleet the following morning and found no irregularities.
We sincerely apologize for the concern and inconvenience caused to our valuable customers.
Safety is of utmost importance to Japan Airlines and we will continue striving to ensure safe operations of each and every flight, and on all our aircraft types including the 787 Dreamliner. Please be assured on your future travel with us.

January 10, 2013
Japan Airlines

Apology and Notice: Delay of Flight JL007 on January 8, 2013
On January 8, 2013 (local time), flight JL007 was preparing for take-off after departing Boston Logan International Airport bound for Tokyo (Narita), when a fuel system trouble required the aircraft to return to the gate. Necessary maintenance was performed on the aircraft and after ensuring that flight operations were safe, JL007 was cleared for departure and departed Boston 3 hours and 46 minutes later than scheduled at 3.46p.m. (East Coast Time). The flight arrived at Tokyo (Narita) on January 9, at 7.31 p.m. (Japan Standard Time). The cause of the fuel system trouble is currently being investigated.
We sincerely apologize for the concern and inconvenience caused to our valuable customers as a result of this mechanical issue.
Safety is of utmost importance to Japan Airlines, and we will continue striving to ensure safe operations of each and every flight and with all aircraft types including the 787 Dreamliner. Please be assured on your future travel with us.

January 10, 2013
Japan Airlines

Apology and Notice:
January 13, 2013: Aircraft Undergoing Maintenance Encounters Fuel System Trouble
On January 13, 2013, a Boeing 787-8 aircraft that had a fuel system trouble in Boston Logan International Airport on January 8, 2013, was at Narita Airport undergoing maintenance as part of inspections for that case when a different fuel system trouble occurred. This aircraft is not scheduled to be in service today and there are no effects on other flight schedules. The cause of the two cases is currently being investigated.
We sincerely apologize to our customers and all related parties for the inconvenience and concerns cause.
Safety is of utmost importance to Japan Airlines and we will ensure that every departing aircraft including the Boeing 787-8, meets all safety standards before flight operations. Please be assured on your future travel with us.

January 13, 2013
Japan Airlines

Questions to Consider

1. How have the recent events in Japan changed the situation for Boeing? What theories can be used to explain that change?
2. How would you rate the effectiveness of the response by ANA? What is the basis for your evaluation?
3. How would you rate the effectiveness of the response by Japan Airlines? What is the basis for your evaluation?
4. How would you rate the effectiveness of the response by Boeing? What is the basis for your evaluation?
5. How might the exists of multiple events for Japan Airlines created new demands for their crisis response?
6. Is there still any value in using experts saying problems are common with new planes in the risk communication for this case? Why or why not?

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Costa Concordia: A Year Later

January 13, 2013

CC Marker

Crises can linger for organizations. You could argue, the worse the crisis event the longer the effects can haunt an organization and its stakeholders. When crises involve a loss of life, memorial and anniversaries serve to maintain awareness of the crisis and the continuing need for crisis communication. The Costa Concordia is an example of the memorial and anniversary dimension of crisis communication and crisis management.
January 13, 2013 is the one year anniversary of the Costa Concordia crisis. The Cruise ship ran aground off the coast of the Italian island of Giglio and sank killing 32 people of the 4,252 passengers and crew on board the ship. The Ship is still in the water and removal may not be complete unitl September of 2013. It is only natural to commemorate and to remember such a terrible tragedy such as this crisis. Carnival Cruise is the parent company involved in the crisis. Carnival owns Costa Crociere SpA, the operators of the Costa Concordia. Most of the crisis communication has come from Costa Crociere SpA.

A number of events were planned to mark the first anniversary of the event including an unveiling of memorials to the victims, a minute’s silence held at the time of the crash, and a mass in honor of the victims at the church on the island of Giglio. Here is the statement from Costa Crociere SpA about the event:

A year has passed since the dramatic events of the Costa Concordia, events which have left their mark on each one of us.

It has affected those closest to us – our guests and our staff – and we have the sincerest compassion for the suffering they have all experienced, and for the grief of the families of those who are no longer with us.

On 13 January 2013, there will be a commemoration day on the island of Giglio in memory of those who lost their lives. We will renew our thanks to the citizens of the Island, as well as to all the rescue teams, who were so generous in assisting and supporting the survivors on that night.

One year on, on 13 January flags will be flown at half-mast at all Costa’s offices worldwide, and on all of our ships. A mass will be held in the ships’ theatres with a minute’s silence at the end of the service.

In Genoa, the home of our head office, the local staff will attend another commemorative mass at the Basilica of St Mary of the Assumption, Carignano. As a mark of respect for our different religions, there will be an inter religious mass in Paris, Hindu ceremonies in Mumbay and Bali, a Muslim one in Jakarta, a Buddhist one in Shanghai and a Catholic mass in Goa, Jakarta, Manila and Lima.

Be assured that I am personally committed, along with all of Costa Crociere and the rest of the cruise industry, to make every possible effort to prevent something like this from happening again. The safety of our guests and crew has always been and will continue to be our paramount priority.

We would like to thank all those have given us continued trust and loyalty. We hope that all our prayers on this sad anniversary, expressed in different languages and beliefs but with a single voice, will help lead us to a brighter future.

With sincere gratitude,

Michael Thamm
CEO

The memorial was a visually dramatic element for the ceremony. Here is a description of the memorial: “The day of commemorations began when a section of the rock that tore a 70-metre (230-foot) gash in the ship’s hull was returned to the seabed. A crane mounted on a tug boat lowered the rock beneath the waves. A memorial plaque affixed to its side was all that distinguished it from the rocky coastline of the island of Giglio.”
The event actually generated a great deal of controversy and media coverage (legacy and digital) before is transpired. Survivors were sent letters by Costa Crociere SpA asking them not to attend the event due to space limitations. The focus was to be on the families and friends of the vicitms, not the survivors. Costa Crociere SpA and the municipality of Giglio were running ceremony. Here is a sample of the conflict:
“’We are sure that you will understand both the logistical impossibility of accommodating all of you on the island, as well as the desire for privacy expressed by the families at this sorrowful time,’ Costa chief executive Michael Thamm wrote in the letter obtained by The Associated Press.
He expressed sympathies to the survivors and said he trusted that their thoughts and prayers “will help lead us to a brighter future.”
While some survivors said they understood that the families who lost loved ones deserved particular attention, many of those who are still struggling to get through each day said the letter added insult to their injuries — both physical and psychological. Some speculated that the letter was more about keeping disgruntled passengers, many of whom have taken legal action against Costa, away from the TV cameras that have flooded the island for the anniversary.”

There was a compromise as survivors who did arrive in Giglio were accommodated. However, the memorial and commemoration was much more contentious than was planned making a healing event divisive in some respects.

Questions to Consider
1. Why was the idea of Costa Crociere SpA planning an anniversary and memorial a good idea?
2. How could Costa Crociere SpA have executed the anniversary and memorial more effectively?
3. What other factors can account for the tension between the survivors and Costa Crociere SpA?
4. What are the purposes of a memorial for a crisis? Does it seem like the Costa Concordia memorial will achieve these purposes? Why or why not?
5. What are the dangers when an organization becomes involved in memorial efforts?
6. There is a closed Facebook page for Costa Concordia survivors. How might this page have been of use when Costa Crociere SpA was planning the memorial and anniversary?


Boeing Dreamliner Nightmare

January 11, 2013

Any company is worried when it launches a new product.  There are concerns over sales and performance.  One example is when new car model is offered.  People often shy away from the first year of a new car because there are “bugs” in the system that need to fixed.  The people buying the new product become beta testers and often have to endure recalls to correct the flaws that are expected to appear.  Now when your new product costs over $200 million and flies through the air, there is even greater concerns when bugs appear.  However, any new product has minor problems, even airplanes.

Boeings new 787 “Dreamliner” has been having its share of minor problems in January of 2013.  Early on there was a braking problem then a fuel leak that brought out emergency crews at Logan International Airport in Boston.  Here is part of the story about the fuel leak:

A Boeing Co. 787 Dreamliner jet operated by Japan Airlines Co. is towed back to the gate at Logan International Airport in Boston, Massachusetts, U.S., on Tuesday, Jan. 8, 2013. The plane leaked fuel while taxiing for departure today in Boston, in the second incident involving the Boeing Co. aircraft in two days. Photographer: Bizuayehu Tesfaye/Bloomberg

“I am 100 percent convinced the airplane is safe to fly,” Mike Sinnett, chief 787 project engineer, said on a conference call with reporters yesterday. “I fly on it myself all the time.”

Thus far, the airlines that have ordered the planes have expressed confidence in the new plane.

More recently, there was an oil leak and problem with the cockpit.  These problems were experienced by All Nippon Airways.  Japan has been the largest purchaser of the Dreamliner but you also have airlines in Qatar, India, Ethiopia, Poland, and the U.S. who have purchased and/or are using the planes.

The Dreamliner is revolutionary in its use of composites and fuel savings generated by using these new materials.  The minor problems have caught the attention of the Federal Aviation Administration (FAA) in the U.S.   The FAA has ordered a comprehensive review of the critical systems on the Dreamliner. This could further eroded airline and passenger confidence in the new airplane.

Here is the response from Boeing:

EVERETT, Wash., Jan. 11, 2013 /PRNewswire/ — Boeing [NYSE:BA] is confident in the design and performance of the 787. It is a safe and efficient airplane that brings tremendous value to our customers and an improved flying experience to their passengers.

The airplane has logged 50,000 hours of flight and there are more than 150 flights occurring daily. Its in-service performance is on par with the industry’s best-ever introduction into service – the Boeing 777. Like the 777, at 15 months of service, we are seeing the 787’s fleet wide dispatch reliability well above 90 percent.

More than a year ago, the 787 completed the most robust and rigorous certification process in the history of the FAA. We remain fully confident in the airplane’s design and production system.

Regular reviews of program and technical progress are an important part of the validation and oversight process that has created today’s safe and efficient air transportation system. While the 787’s reliability is on par with the best in class, we have experienced in-service issues in recent months and we are never satisfied while there is room for improvement. For that reason, today we jointly announced with the U.S. Federal Aviation Administration (FAA) the start of a review of the 787’s recent issues and critical systems.

We welcome the opportunity to conduct this joint review. Our standard practice calls on us to apply rigorous and ongoing validation of our tools, processes and systems so that we can always be ensured that our products bring the highest levels of safety and reliability to our customers.

Just as we are confident in the airplane, we are equally confident in the regulatory process that has been applied to the 787 since its design inception. With this airplane, the FAA conducted its most robust certification process ever. We expect that this review will complement that effort.

Contact:
Lori Gunter
787 Communications
+1 206-931-5919
loretta.m.gunter@boeing.com

 

Japan Dreamliner

Questions to Consider

1.  How bad is the situation for Boeing and what leads you to that conclusion?

2.  What role can public relations play in helping to address this problem?

3.  Some media outlets have found experts that say minor problems are common in new airplanes.  Who might this type of information help Boeing?  Hurt Boeing?

4.  Why should the FAA announcement be so significant in this case?

5.  How would you evaluate Boeing’s response and what is the rationale for your evaluation?

6.  What else might Boeing doing and how would those efforts help?

7.  How is publicity working against Boeing in this case?


AIG: Promotion Its Payback

January 9, 2013

AIGIn 2008, there was a global meltdown of the financial markets.  Most experts feel the financial institutions and lax government policies contributed to this financial disaster.  Many companies did not survive.  In the U.S., a number of financial companies survived due to a bailout from the Federal government.  Among those receiving a bailout was AIG, a financial/insurance company.  AIG received a little over $182 billion dollars in the bailout.  In return, the U.S. government received stock in the company.  Taxpayers had mix reactions about their money being used to bailout financial companies that had helped to create the problem.  The term “too big to fail” was used as a justification.  In other words, these large companies were important and their failure would make the economic situation worse.  Even some experts thought the U.S. government would not recoup the money it loaned AIG.

By the end of 2012, the U.S. government had sold all of its shares of AIG and turned a profit of over $22 million on the deal.  Still the reputations of financial institutions that took bailouts remained grim.  Most people still disliked the bailouts and had negative views of financial institutions.

AIG decided to promote its repayment and thank the people of the U.S.  On January 1, 2013, AIG launched its “Thank You America” campaign.  Here is a description of the effort and comments from AIG:

“We at AIG are proud of not only our work to rebuild the company, but also the work we do every day to help guarantee that customers and communities are prepared for the opportunities and challenges ahead – work we never stopped doing, even during the depths of the financial crisis,” said AIG President and Chief Executive Officer Robert H. Benmosche. “We thank America for allowing us to insure a brighter future and to bring on tomorrow.”

The new campaign will run for two weeks, and will include broadcast, online, and print placements. Television ads will run on high impact programming: sporting events, including NCAA Football Bowl Championship Series games and NFL playoff games; national morning shows including The Today Show and Good Morning America; and primetime television, including The Golden Globes, 60 Minutes, and Dateline. Print ads will appear in upcoming issues of major publications, including The Economist, The Financial Times, The Houston Chronicle, The Los Angeles Times, The New York Times, USAToday, The Wall Street Journal, and major trade journals. Online ads buys include a masthead and mobile roadblock on YouTube, and homepage takeovers of nytimes.com, MSN.com, WSJ.com and Yahoo!. The campaign will also be promoted on social media and can be seen on AIG’s YouTube channel.

AIG promoted the campaign on social media.  Its Facebook page had links to the campaign, its videos were on YouTube, and here is a Tweet about it:

AIG’s Thank You, America #ad just ran on the #BiggestLoser Are you watching? RT if you saw it, or catch it again here http://www.youtube.com/AIG?x=us-en_showcase2_86_15 …

The campaign highlights the pay back but also shows the different ways AIG has been helping Americans recover from disasters such as Hurricane Sandy.  The message is a positive one of repayment and recovery for AIG and the U.S. We will have to see how people react to these messages.

Questions to Consider?

1.  What are the benefits to AIG of this campaign?

2.  What are the dangers to AIG of this campaign?

3.  Why would AIG be using such a heavy push in social media and legacy media?

4.  If you were at AIG, how would you defend taking the original bailout money?

5.  Why do financial institutions have a lingering reputation problem?

6.  What other actions need to be taken to help financial institutions repair their reputations and why will these actions help?


Nike “Gold Digging”

August 16, 2012

The US women just completed an amazing Olympics.  Blog writer loves track and field so I will mention the world recording 4 by 100 relay and a blistering 4 by 400 relay by the women runners.  Allyson Felix stood out by winning 3 gold medals and making the finals of the 100 meters.  If you like other sports there are story lines for those as well.

One thing the Olympics cannot escape is sponsorship issues.  The negatives for the US women revolved around sponsorship issues.  The issue as Rule 40.  Basically athletes cannot use the Olympics to market/promote no-Olympic sponsors.  That means Adidas is okay but not Nike.  So athletes like Sanya Richards-Ross complained about it.  This was commercial not free speech and detracted from Olympic performances.  The Olympics sets rules and participation is an honor not a right.  Detraction number 1.  Detraction number 2 was the controversy over the women’s soccer team donning shirts reading “Greatness has been found.”  It was considered gloating and in poor taste.  Again, it becomes about the sponsors and what they want harms the athletes.

Now Nike has a new shirt that is raising eyebrows and protests.  As full disclosure, I do not hate Nike.  In fact I own many Nike shoes and running apparel.  However, there are times when even companies you like do things that are questionable.  The new shirt is for women and says “Gold digging.”  The shirt is meant to be funny.  Gold digging is traditionally a women looking to romance/marry for money.  In this case it means winning gold at the Olympics.  We can question (1) is the joke funny at all and (2) is it more offensive than funny.  Here is one take on it:

We don’t like to be super sensitive about these things, but something about this seems… off. The t-shirt features metallic gold lettering and Nike’s signature check logo and is only available for women (because women presumably love to be called gold diggers). But we can’t help but wonder if some ladies will be less than pleased with this kind of depiction.”

Questions to Consider?

1.  Is the shirt situation a crisis or an incident for Nike?  Explain your decision.

2.  Is it unethical for non-Olympic sponsor to pressure athletes into marking for them during the Olympics?  Why or why not?

3.  What arguments can be made for and against the US Women’s Soccer Team wearing the victory shirts?

4.  Overall, how have Nike’s actions impacted potential customers, especially women?

5.  If you were Nike, how would you defend the gold digging shirt?Image


Reconsidering Johnson & Johnson’s Tylenol Performance

February 7, 2012

While we must be careful about re-writing any history, Howard Zinn’s work reinforced that history is written by the winners and may mute the voices of the losers/marginalized.  The point is to keep an open but critical mind when considering new versions of history.  The self-published book, The Tylenol Mafia, questions the ethicality and accuracy of Johnson & Johnson’s response to the 1982 Tylenol tamperings.  The author, Scott Bartz, is a former Johnson & Johnson who spent three and half years researching the book.  You can find the bibliography for the book at his promotional web site.  Bartz’s central thesis is that the tampering was not executed at the retail level but occurred somewhere in the supply chain.  The claim moves the responsibility from an external actor to and internal actor.  Still few would hold Johnson & Johnson responsible for the actions of a rouge employee.  The importance of the claim is derived from the implications that Johnson & Johnson worked to cover up this possible link and had the support of the news media and the government.  Here is a sample of the implications PR people are drawing from this claim from Jack O’Dwyer:

“The Tylenol Mafia,” by Scott Bartz, an exposé of Johnson & Johnson’s manipulation of facts surrounding the murder of seven people in the Chicago area in 1982 via Extra Strength Tylenol, will create a big headache for J&J, the media that went along with this ruse, and authorities such as the FBI, local police and the courts that did flawed and even dishonest work.

O’Dwyer also believes those who praise the Tylenol case is an excellent example of crisis management, including many PR textbooks, the New York Times, and PRSA, are embarrassed by the findings of the book.  The argument is that they have bought into the hype and not the reality.  Part of O’Dwyer’s point is that Johnson & Johnson took five days to recall the product after the tampering was discovered.  The point being that five days is not exactly fast, a point other in public relations support.

The debate has begun in PR circles about the book and its implications.  Bob Grupp of the Institute for Public Relations called the book conspiracy theory.  Her is his line:   “If you care to read more about conspiracy theory, you can Google the topic or read Jack’s blog.”  This is an unusual case so I refer you to the various links to draw your own conclusions about Johnson & Johnson’s place in crisis management lore.

Questions to Consider

1.  Where do you stand on Johnson & Johnson’s crisis management praise for the Tylemol case and why?

2.  If credible, how does the “book” harm Johnson & Johnson’s reputation?

3.  Is there a point to be made that PR creates cases that are more mythic than reality?


Is Foxconn Baking Apple’s Reputation?

January 29, 2012

If you have an iPod, iPad, or iPhone, do you ever look at it and wonder about the people who assembled your electronic marvel?  Most people do not think about the supply chain, including labor, that goes into the products they use.  Yes, we do know about sweat shop and child labor and efforts to reduce this problem in the garment industry.  Yet every product has a supply chain behind it that may have problems associated with it.  Apple products, like most in the electronics industry, have “problems” with using conflict metals and minerals as well as labor issues.  This case will focus on the labor issues.

 

In February of 2011, Apple releases a report titled “Apple’s Supplier Responsibility 2011 Progress Report.”  It was the first effort by Apple to expose the labor problems it faces.  Among the problems were 137 employees being poisoned at its Wintek’s Suzhou factory in China by n-hexane, a cleaning agent used in the production of parts for Apple and Nokia. For Apple, the facility makes iPhone screens. The report also noted compliance problems with the 60 hour work week established by Apple.    However, the report does not offer much detail about what Apple is doing to address the problems.

 

The most disturbing part of the report might have been the problems at FoxConn Technology in Shenzhen.  During one five-month span, there were 15 suicides or attempted suicides.  The problem was so bad that the factory hung netting to catch workers trying to commit suicide by jumping from certain locations in the factory.

 

Foxconn remains a very active problem for Apple.  Major news outlets, including the New York Times, continue to report about the problems there.  After running two stories about Foxconn in January of 2012, Apple decided to reply to the New York Times.  The reply was a e-mail that CEO Tim Cook sent to employees.  It should be noted that Cook is the person at Apple who found the Foxconn facility.  The long e-mail is an attempt to boost employee morale.  The reports linking Apple to the tragic events at Foxconn can demoralize employees if they feel the company they work seems to care so little about people further up the supply chain.  Here is the text of the e-mail:

 

Team,

As a company and as individuals, we are defined by our values. Unfortunately some people are questioning Apple’s values today, and I’d like to address this with you directly. We care about every worker in our worldwide supply chain. Any accident is deeply troubling, and any issue with working conditions is cause for concern. Any suggestion that we don’t care is patently false and offensive to us. As you know better than anyone, accusations like these are contrary to our values. It’s not who we are.

For the many hundreds of you who are based at our suppliers’ manufacturing sites around the world, or spend long stretches working there away from your families, I know you are as outraged by this as I am. For the people who aren’t as close to the supply chain, you have a right to know the facts.

Every year we inspect more factories, raising the bar for our partners and going deeper into the supply chain. As we reported earlier this month, we’ve made a great deal of progress and improved conditions for hundreds of thousands of workers. We know of no one in our industry doing as much as we are, in as many places, touching as many people.

At the same time, no one has been more up front about the challenges we face. We are attacking problems aggressively with the help of the world’s foremost authorities on safety, the environment, and fair labor. It would be easy to look for problems in fewer places and report prettier results, but those would not be the actions of a leader.

Earlier this month we opened our supply chain for independent evaluations by the Fair Labor Association. Apple was in a unique position to lead the industry by taking this step, and we did it without hesitation. This will lead to more frequent and more transparent reporting on our supply chain, which we welcome. These are the kinds of actions our customers expect from Apple, and we will take more of them in the future.

We are focused on educating workers about their rights, so they are empowered to speak up when they see unsafe conditions or unfair treatment. As you know, more than a million people have been trained by our program.

We will continue to dig deeper, and we will undoubtedly find more issues. What we will not do — and never have done — is stand still or turn a blind eye to problems in our supply chain. On this you have my word. You can follow our progress at apple.com/supplierresponsibility.

To those within Apple who are tackling these issues every day, you have our thanks and admiration. Your work is significant and it is changing people’s lives. We are all proud to work alongside you.

Tim

Below are some reactions posted to a news story about the e-mail:

The only reason Cook and the Board care now is because of Public outcry… But it won’t hurt sales… People want the cheapest price they can get no matter what the costs. Hypocrites.

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0 replies · active 17 hours ago

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Coldwaters Rundeep · 22 hours ago

Who is making sure Apple is following it’s own policies? Corruption in this neck of the woods is to great to leave it up to the parent corporation and needs an outside agency that is arm length with Apple.

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Tony · 19 hours ago

To which I would reply to Mr. Cook, bullshit. Apple doesn’t even care about people at corporate let alone the factories. Granted its a different level of caring but people are not treated with respect at Apple at. Very personal experience allows to me to share this. My experience with Apple in Cupertinomis that most people there can’t wait to get a job elsewhere. Get Apple on the resume and move on as quickly as possible. It’s a shit environment.

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Industrial Hitlers · 20 hours ago

Apple CEO Tim Cook, just like Better-Off-Dead Liar and Stinky Hippie Steve Jobs, is an Industrial Hitler issuing self-serving propaganda while murdering slave labor.

People who eat up his obvious PR spin are complicit. That includes Obama, Congress, and every Apple employee and customer.

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Will · 23 hours ago

Apple is to blame b/c it has been squeezing supplier profit margins which requires them to cut corners on safety. It’s that simple. Apple should use some of its record profits and provide it’s suppliers with some money to improve safety at its factories.

The concern over Foxconn is real for Apple. In late January, a self-described Apple started a petition at Change.Org.  Here is the e-mail requesting support for the petition:

According to the New York Times, workers at a factory in Shenzhen, China, owned by Foxconn (a company that manufactures iPhones, iPads and other devices for Apple) regularly work sixteen-hour, seven-day work weeks.

They stand until their legs swell and they can’t walk, and they perform repetitive motions on the production line for so long that some permanently lose the use of their hands. To cut costs, managers make workers use cheap chemicals that cause neurological damage. There has been a rash of suicides at the Foxconn plant, and 300 workers recently threatened to jump off the roof over a safety and pay dispute.

In short, as one former Apple executive told the New York Times, “Most people would be really disturbed if they saw where their iPhone comes from.”

Mark Shields, a self-described member of the “cult of Mac,” started a petition on Change.org demanding Apple exert its influence on its suppliers to improve working conditions for the factory workers that make iPhones, iPads and other Apple products. Click here to sign Mark’s petition right now.

Apple knows it can play an important role in ensuring safe and fair working conditions for the workers at its suppliers, like Foxconn. In 2005, the company released a supplier code of conduct, and it performs hundreds of audits each year in China and around the world to confirm its suppliers are meeting the code’s expectations.

But that’s where Apple’s commitment falters: the number of supplier violations has held steady year to year and Apple hasn’t consistently publicly stated which suppliers have problems or dropped offending suppliers.

The bottom line, Apple executives admit, is that they’re not being forced to change.

One current executive told the New York Times that there’s a trade-off: “You can either manufacture in comfortable, worker-friendly factories,” he said, or you can “make it better and faster and cheaper, which requires factories that seem harsh by American standards. And right now, customers care more about a new iPhone than working conditions in China.”

That means public pressure is the only thing that can force Apple to ensure its suppliers treat workers humanely. If enough people sign Mark’s petition — and tell Apple they care more about human beings than they do about how fast the company can produce the next generation iPhone — the company could be convinced to make real change for the workers at Foxconn and other factories.

 Click here to sign Mark’s petition demanding Apple change the way it does business.

Thanks for being a change-maker,

– Amanda and the Change.org team

People are beginning to question Apple’s commitment to responsible behavior.  The company is making billions while the suffering of many workers is well documented.  Foxconn is a massive facility.  Foxconn employees over 230,000 workers.  Most workers make about $17 a day and one quarter live on site in company barracks.  The kitchen at Foxcoon serves 3 tons of pork and 13 tons of rice per day.  We have not seen anything like Foxconn in the U.S. since the early days of the industrial revolution when “company towns” were in vogue.  In a company town, employees lived in housing owned by the company and shopped at stores owned by the company.  In fact, some employees were paid in company scrip rather than actual money.  No need to actual money when everything a worker made was being paid to the company.  Scrip eliminated the need to have cash on hand and was common in the coal industry

Questions to Consider

1.  Is Foxconn a crisis for Apple at this point?  Justify your answer.

2.  How does this case illustrate the connection between issues management and crisis management?

3.  What is Apple’s responsibility for the workers at Foxconn who are part of their supply chain?

4.  Does Apple’s strong, favorable reputation help to insulate them from the problems at Foxconn?  Why or why not?

5.  How would rate the ethics of Apple’s initial report disclosing their supply chain problems and why would you assign it that rating?

6.  How would you evaluate the effectiveness of the CEO’s defense of Apple?  What criteria did you apply to reach your conclusions?

7.  What else would you recommend Apple do to address the situation and why would those recommendations help?


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