Recently I received a request from ARD – German National Television – to give them access to two ‘typical’ factories in Southern China. Over the past 10 years, I have been intimately involved in our efforts to push the boundaries of transparency, especially in relation to sustainability, global supply chains and the working conditions in the factories making our products. And I have always been a strong advocate of giving the media access to our suppliers, to let them see inside, especially in developing countries such as China (see my recent post)
It is this same spirit of openness and engagement that I agreed to ARD’s request and accompanied them to two factories. This is a short account of those visits.
Unrestricted access to our factories
The journalist and crew were given unrestricted access to two long-standing adidas Group’ suppliers: Yue Yuen and Longway. The factories visited were built in the mid-1990s and are situated in Guangdong Province, just across the border from Hong Kong. Yue Yuen, or YY, is the world’s largest athletic shoe manufacturer, a diversified business with almost half a million employees and annual revenues of USD 7 billion. YY is larger in terms of sales than some of the well-known high street brands that they make for.
Overall, YY makes products for some 70 global brands, including adidas’ popular Supernova running shoe. The Supernova will feature on ARD’s “Brand Check” programme and the shoe was in production at the time of the media visit. Longway is another long-time business partner to the adidas Group and a specialist supplier of thermally-bonded footballs. They make the UEFA Euro and FIFA World Cup match balls, which will also feature on ARD’s Brand Check later today.
The TV crew was welcomed to Guangdong by grey skies and intense rainstorms, which interrupted filming on the first day. YY had been visited in the past by the press, but this was the first occasion when access had been granted to Longway, with its proprietary thermal-bonding and ball lamination technologies. adidas Group’s technical experts were on hand to explain the individual steps for the shoe-making and the ball manufacturing processes, from development and tooling to quality inspections and testing of the final product. I was there to answer questions on the company’s social compliance and labour rights programme (find out more here).
The worker’s perspective on factory life
The sheer scale of the workplace at YY, with 8,000 plus workers in the adidas-dedicated plant, which is itself part of a complex housing 80,000 workers, was impressive, as was the complexity and intricacy of the shoe assembly with its many parts and components. There was a constant drone of sewing machines and you had to raise your voice to be heard. In contrast, the ball workshop was smaller and more automated, and much quieter, with fewer than 120 workers in the production area. The main focus of ARD’s interest, however, was not the manufacturing processes – although this consumed a lot of the camera man’s time – it was the workers and their perspectives on factory life.
The TV crew dedicated several hours of each day capturing on-camera interviews with workers on the production line and in the factory canteens. The journalist, supported by an interpreter from Hong Kong, asked them about their pay and conditions and their general safety.
To capture the full picture of the world of work in China, we also invited ARD to a nearby hospital, built by YY to serve their workforce and the local community in Dongguan. The journalist asked the Director of the hospital if it was possible to interview any patient who had been admitted from the adidas Group’ production plant, but there were no current cases. In one ward however a male worker from another of YY’s plants (making for another brand) had, it seemed, dropped something heavy on his foot. He was quite bemused, and a little confused, as a German TV crew gathered around his bedside, camera trained on his injured leg. In contrast the workers and local residents seated in the general waiting area, many of whom were attached to intravenous drips – which is a common curative in China – were more nonchalant and largely ignored the Western TV crew.
The living conditions in Guangdong Province
The TV presenter was also shown the worker dormitories at YY and extensive interviews took place with six young men in their 20’s and 30’s, in the single dorm room they call “home”. To the Western public these conditions are sure to seem extremely basic, a mattress or bed roll, a few simple possessions and a bunk bed; with 6-8 workers to a room and communal showers and toilets. Yet these are the norm for nearly all factories in Guangdong Province. With so many workers migrating to the South of China to find employment, all factories have built large dormitories as an offer to quickly find a place to stay. Over the years, however, as workers and their family members established themselves in Guangdong, I have seen that they increasing prefer to live outside of the factory grounds, in shared accommodation in adjacent residential areas.
At YY only 30% of the workforce is housed in the unisex dormitories (male and female workers are strictly separated). A full 70% of workers – once they have met and made friends – look for shared accommodation outside the factory grounds, usually small one or two bedroom apartments. Although living conditions on-site dormitories are basic, they are also extremely cheap, with the average monthly cost of 55 RMB for hostel-style dorm accommodation, compared with 160 to 200 RMB per person for a shared flat in the nearby residential areas. Apart from the benefit of being able to choose your own flat mates when renting an apartment, workers also like the fact that they can cook their own food at home. This is not permitted in the dorms, and so workers who live on site are only able to eat in the canteen, or at food stalls outside of the factory grounds.
Food is a major part of the migrant workers’ life and they pay between 90 and 190 RMB for meals in the canteen, depending on the level of subsidy offered by the factories. The single largest area of complaint from workers is the taste of the canteen food. The kitchen staff faces a tough challenge. With migrants from provinces across the whole of China, with very specific culinary preferences – from hot and spicy to very oily – no one ever seems satisfied with what the kitchen makes. Both YY and Longway have spent many worker committee hours discussing how to improve the taste and variety of the food they serve and to meet the demand for more ‘local’ dishes from around the country.
Workers take-home pay
The midday and evening meals are a welcomed break, given the long hours that workers put in at the factories, but those hours are important to them as they arrive at the factories with a single purpose in mind: to maximize the opportunity to make money and improve the lives of their families, especially those in the poorer inland towns and villages. Guangdong is one of the most prosperous parts of the country and over the past three years the local government has raised the minimum wages here by 20 percent per annum. This is well above the rate of inflation and is part of government’s general efforts to improve general welfare and domestic spending. Typically, with overtime, a worker at Yue Yuen will take-home 1,949RMB per month, whereas the average pay for workers at Longway is 2,771RMB per month. That is close to twice the minimum wage. A good part of this money is sent home by workers, to help their aging parents or other relatives.
As I said in one of my earlier posts on this blog:
“None of our supplier factories are perfect; far from it.
Are they better than many others? I would say, on the whole, yes we have a number of very committed suppliers.
Are we, as a company, working diligently to protect worker rights? Absolutely.
Are there hard to fix issues in the factories? Yes, there are. When you source products from 1,400 factories in 63 different countries globally, which employ over 800,000 workers, you will, every day, have challenges and issues.
Does what we do as a company matter? Does it change lives? Yes, it does.” And I am certain that the workers at Yue Yeun and Longway are better off because of our efforts to operate as a socially responsibly business.
We are looking forward to tonight’s show on ARD. If you will have questions after having watched the show, please feel free to ask all of them here on the adidas Group blog. Just leave a comment. I will then write a wrap-up post to answer them afterwards.