Apple (TNC)

Question 1

Context

Answer 1

2000 – phenomenal growth – 2 nd largest IT company, 3 rd largest mobile phone manufacturer, largest music retailer, No. 1 in value (US$145 billion)

98,000 full-time employees, 450 retail stores in 16 countries. 2014 – 11th largest TNC globally with US$207 billion.

Question 2

What are the impacts on Ireland?

Answer 2

AO2
Positive:
 4,000 workers directly (iMac production and call centre). Indirectly employs 2,500
 Attracted other hi-tech firms and highly skilled workforce
 Contributed to infrastructural improvements
 Reputation for hosting TNCs – ‘Celtic Tiger’ (1990s-2000s)

Negative:
 High-skilled employees mostly from the EU and not locals (60% of the production line are Irish)

Question 3

What are the impacts on tax?

Answer 3

 By using subsidiary firms in other countries – Apple avoided US£13 billion (2017)
from business in Ireland.

AO2
 Exposed a flaw in a globalised world
 Laws need to be updated to consider
those who produce in China etc. but
makes a MOST profit from intellectual
property e,g, marketing and branding.
 Apple is not alone – Amazon faces a US$250 million bill

Question 4

Why is the production in China?

Answer 4

Production – In China because …..
 Large source, highly skilled but low paid
 Directly and indirectly, employs 4.8 million
 Provides investment and generates jobs
 Taiwanese companies competed = forcing down prices
 Shenzen (Special Economic Zone) offers incentives to attract foreign companies

Question 5

What are the impacts on China?

Answer 5

Impacts on CHINA
>Working conditions – 60 hours/ week for $100/mth (half taken for living expenses)

> Health and Safety – in 2010 50 workers were poisoned at Lianjian Technology by a chemical used to clean iPad. Ventilation not installed to reduce costs.

> Student/ Child labour – 3000 students aged 17-19 sent from Urban Rail Transit School to meet the demand for iPhone X production (2017) – 11 hr days. 40 hr week limit for interns, not 66!

Suicides – 2009-2010 = 17 suicides mostly due to pressures and poor working. Living conditions.

Environmental – Greenpeace complaints: reliant on non-renewables, use of toxic chemicals eg. PVC and discarding into local water supplies, lack of recyclability.

Green my Apple campaign – 75% renewables (solar) and removed PVC (now 6th Green Electronics ranking)

AO2
Economic benefits for China – multiplier effect with money to invest in healthcare, education, infrastructure
However, lots of negative press due to working conditions: long hours, withholding pay, suicides, poor living conditions = 39% profit drop for Foxconn (2017)
Leakage of profits out of China back to the US.