 Welcome to Neve's Desk on SiliconANGLE TV, for Monday, October 8th, 2012, I'm Kristen Folletti. China Labor Watch is reporting that another strike broke out on Friday at a Foxconn factory in China. The report says three to four thousand Foxconn workers were unhappy about having to work during an extended national holiday and also that Apple is putting them under immense pressure to deliver iPhone 5s at higher quality standards without providing adequate training on how to improve yield rates. Saturday, Foxconn issued a statement denying that production was affected. With this being another recent strike in several weeks at Foxconn, how is deja vu impacting Apple? Joining us now with his breaking analysis is SiliconANGLE founding editor Mark Risen Hopkins. Welcome, Mark. Howdy. So to summarize quickly, Foxconn employs more than one million workers in China. They've suffered in the past three years from suicides, riots, strikes. Foxconn employs have been reported to work as many as 12 hours a day. And now they're saying the difficulties of meeting Apple's demands for quality standards have caused abuse from guards and set off these most recent incidents. So what's the solution here? So it's really hard to say what the solution will be without actually changing the whole of the human rights abuse issues that exist in China on a much larger scale. And I think actually before I go too far into the answer to this question, it's important for me to point out that on some of these things, the issues that Foxconn employees are experiencing, like such as the suicides and some of the work conditions, while they are serious issues, many times when there's a suicide in the workplace or around the workplace, it's a big deal. But suicide rates around Foxconn are actually below industry average. This was something in Steve Jobs and the Foxconn officials made a very important show of talking about when it was first made into an issue in story last year. But I mean, in terms of a solution for this kind of ongoing problem for the workers, it's kind of an odd situation because Foxconn does provide slightly better standards for its workers than most other manufacturing outfits in China. It actually gives them more leverage to ignore the human rights abuses or as the West sees them as human rights abuses. Because they're able to kind of hold the pay rates underneath over the workers' heads. They pay above minimum rate, they pay above minimum wage in China. They pay around 200, actually up from 220 a month to around $339 a month, which is far above what minimum wage is in China and what the average pay is in China. So when you're talking about them striking at the Foxconn factory, it's very difficult for them to do so in the first place just because they're walking away from more money than probably all their friends and families have ever seen in any particular job. Apple sold 5 million iPhone 5 models in the first three days on sale last month, and the demands of the public are causing more pressure on plant workers. Do you think Apple needs to slow down the rollout of future projects to prevent this future worker mistreatment? I think that they would have a hard time doing so. They would see severe backlash from the company. It's kind of a game of opportunity cost for them. They've got issues. This is all about a PR issue when it comes down to it with Apple. I mean, sure, there's more at stake on a moral level, but when it comes down to it, Apple is having to deal with this strictly on a basis of a PR problem. Will this prevent them from selling more iPhones in the future? And to actually slow out the roll of iPhones to prevent the loss of sales of iPhones in the future seems somewhat antithetical to the end goal. So would them slowing the manufacturing down or slowing down the demand for manufacturing solve or help alleviate some of the problems it might, but it would also undercut the bottom line. Can you tell us about what's driving these so-called higher quality standards that Apple's enforcing? So there's been some complaints from customers about getting an iPhone off fresh off the shelf or fresh in the mail and there's some scratches on the back cover or some sort of like imperfection on it. Then Apple has made their reputation on being absolutely perfect, perfect product every single time. And so they're held to a much higher standard by the consumer than any other brand out there. And that's really what this is about. It's exacting standards that the consumer is set for Apple because Apple is set for themself. So these higher demands by consumers are consumers to blame for the mistreatment that's happening at these plants? Is there anything that they can do? So I mean at the end of the day the only people that are truly to blame are Foxconn. I mean you can try to blame the user on this but this is nothing more than a consumer reinforcement of the marketing cycle that Apple has put out there for close to a decade if not longer now. We do not screw up. We make a perfect product. That's the Apple mantra. And consumers have bought a hook by a sinker. Literally they buy it and that's why they buy is because they make a perfect product. And so you can't really blame the end user other than to say that yes they continue to buy something like an iPhone while they know that there is human rights abuses going on during the manufacturing process. China Labor Watch reported Friday that iPhone 5 production lines were in a state of paralysis for the entire day. However in a statement on Saturday Foxconn said production at the plant continued without an eruption. Why did Foxconn deny any strike or work stoppage? So in the modern era command and control PR just doesn't work in the west. In China it does because you have state controlled media and the public believes whatever you tell them because industry is the government is the people is everything. So I mean it's just the difference in having a free media and not having a free media. And China is having a hard time just as a culture acclimating to and always on social media enabled world and they think that they can get away with basically lying to the public about what's actually going on when the public very easily find out through other means. Quality control inspectors began brawling with workers and that led to some damage in an inspection room injury of several workers and even the hospitalization of others. It's reported that Foxconn factory management turned their back on the issue. Why would management not take any corrective measures? This is slightly puzzling the only answer that I can give you is they thought they might be able to get away with it. And I can't tell you anything other more more definitive than that because really only Foxconn knows why Foxconn did what they did. We can only theorize and I think the mentality must go back to the mentality that their PR thinks that they can control the story and deny anything went wrong. Last month a Foxconn plant in northern China halted production after a brawl. The latest reports from the China labor watch say workers are back on the production lines now. So will there ever be an end to the problems at Foxconn or is this a never ending cycle. And so this is actually I think is a never ending cycle with with larger implications in what you may even be asking me because I believe so I think that while human rights human rights abuses aren't going away in China at all. First of all I mean that that's it's it's going to take years for the country as a whole to achieve the economic prosperity that's going to allow them to unionize and kind of go through the same sorts of workplace improvements that America went through around the time of the Industrial Revolution. So and thereafter and it took a long time for America to do it. So you've got to assume with China being a much larger country population landmass wise with a still strong agrarian economy component to it that is going to take a much longer time for them to modernize and get better rights for workers. But beyond that I think that there's something going on here with Apple as a brand involved and this becoming a never ending issue. If you were to ask John Furrier here at the company the same question he might disagree with me but I believe the loss of Steve Jobs at the helm has actually encouraged this problem to rear its ugly head and in the press much more so than it would have had was he still alive because of the famed reality distortion field that exists around this is very charismatic man. And so he could you know wave his hand and problems disappear and you know people stop thinking about it and he's not here to do that anymore. The last time this came up the last time well not the last time but the last time there was a major outrage with the public and people were saying we need fair trade Apple. He went on stage with Kara Swisher talked a little bit about how we have a new Apple here. We have a new approach to manufacturing rights to the workers are in our hearts and we're better than anybody else and people believed it and the issue went away for a year. And since Tim Cook has taken the helm we've seen the drumbeat against Apple on their manufacturing processes come up with a regularity of once every couple of months. So I think that this is an issue to directly answer your questions and the issue is not going away. So is the answer then for Apple to cut all ties with Foxconn. You know what I think the the the answer here is for Apple to maybe go with production that's not in a you know in such an economically depressed environment I mean bring it back to a society that has labor standards China has no labor standards and that's the crux of the issue when you move manufacturing to a country with no labor standards no matter how much pressure you put them put on them as the buyer they will basically do what they are allowed to get away with by cultural and legal constraints. Well Mark thanks so much for joining us this morning. For all the latest in-depth coverage and breaking analysis on News of the Day keep up to date with News Desk right here on SiliconANGLE.tv