Over the years, OEM after OEM has fallen prey to Foxconn, lured by the temptation of higher margins by outsourcing product to the Taiwanese ODM. H-P, Motorola, Dell, Sony and Apple are among the many, many companies that outsource billions of dollars worth of product build each year.
Sadly, IBM, one of the few remaining major holdouts, appears on the brink of ending its streak. Big Blue is set to announce a deal to to codevelop something called “environment-friendly” products.
Pending release of financial terms, it’s unclear what IBM stands to gain from the program.
IBM has ventured down the environmentally friendly path before. In 2007, it committed $1 billion to fund Project Big Green, an effort toward environment-friendly, energy-efficient products and services. This is its first known deal with Foxconn, however.
It shouldn’t happen.
As The Economist pointed out earlier this month, China’s reputation for workmanship remains a negative in consumers’ eyes. “The poor external reputation of China’s products hurts not only Chinese companies but also Western firms known to be selling Chinese-made goods.” Citing last year’s scandals over various Chinese-produced toys, the US and India have passed new laws governing imports from the World’s Workshop.
And myriad stories have cited Foxconn’s dismal and imperialist working conditions.
IBM is America’s crown jewel, the greatest electronics company the world has ever known. Getting in bed with scofflaws like Hon Hai cheapens its luster and diminishes its reputation. IBM should walk away.
UPDATE: Whew! That wasn’t so bad. The Wall Street Journal is reporting Foxconn is licensing IBM’s GreenCert technology for estimating the amount of greenhouse gas emissions pumped from factories. It could have been much worse.