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Product secrecy and a worker’s death

Sun Danyong was the mild-mannered son of a potato-farming family in an impoverished corner of south-central China.

When he was offered a job at a sprawling electronics factory in the boomtown of Shenzhen last year, he accepted, figuring the experience would spur him to better opportunities one day back in his home province of Yunnan.

He never got the chance. On July 16, 25-year-old Sun leaped to his death from the 12th floor of his apartment building after becoming embroiled in a factory probe over a missing prototype of a new Apple iPhone.

Now Sun is quickly becoming a symbol of the psychic toll inflicted on young workers in many of China’s pressure-filled factories. His death has also put scrutiny on Apple and its obsession with control over its products.

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A police investigation has been launched to determine the possible culpability of a now-suspended factory supervisor, who was accused of abusing Sun during an interrogation.

Apple has not been accused of any wrongdoing, but the company’s zealous protection of its product designs may have put added pressure on factory managers to find the missing prototype, according to at least one analyst.

The Cupertino, Calif., company in 2004 filed a lawsuit against an Apple enthusiast website, alleging that it infringed on the company’s trade secrets by soliciting insider information; the suit was settled in Apple’s favor. The company also won the right to subpoena writers associated with two other fan sites in 2005 in an effort to identify the Apple employee who had divulged details about an upcoming product.

A missing prototype would be considered a very serious breach, one that could mean repercussions for any company considered responsible, said Charles Golvin, an analyst with Forrester Research in Cambridge, Mass. And if one factory loses an Apple contract, another stands ready to step in.

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“These companies are competing heavily for Apple’s business,” Golvin said.

What role, if any, that played in the factory’s actions toward Sun is not yet known, but Apple pointed out that it has a program to monitor the working conditions of its suppliers that includes provisions against “mental coercion” and “inhumane treatment.”

“We are saddened by the tragic loss of this young employee, and we’re awaiting results of the investigations into his death,” Apple spokesman Steve Dowling said. “We require that our suppliers treat all workers with dignity and respect.”

Apple said it would wait for the results of a Chinese investigation into the suicide before taking any action.

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The death has also resurrected questions about Sun’s workplace, Foxconn Technology Group, a giant Taiwanese-owned company that has made iPods and Dell computers and has been accused in the past of sweatshop conditions.

“Someone needs to take responsibility for his death,” Sun’s brother, Sun Daxiong, said in a phone interview. “He was pushed too hard by his job. He was humiliated and forced into this situation. This tragedy could have been avoided.”

The details surrounding Sun Danyong’s death remain murky. Local media published purported online chats between him and friends hours before he died.

The narrative now coalescing and gaining traction across Chinese Internet message boards goes like this: Sun was assigned to mail 16 of the new-generation iPhones to Apple on July 10. When one was discovered missing days later, internal security blamed Sun. He was allegedly detained, interrogated and beaten at the factory while his apartment was illegally searched. Soon after, he jumped to his death.

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“Not only was I beaten, but those bastards inspected my mobile phone, searched my home and detained me,” read one of Sun’s text messages an hour and a half before his suicide, according to the Southern Metropolis Daily.

Officials at Foxconn declined to be interviewed but released a statement apologizing to the family and saying no employee was authorized to break the law in the internal investigation.

The company said it was cooperating with police and had suspended without pay a security supervisor in charge of questioning Sun.

Taking note of the Internet message traffic over the tragedy, the company added: “We welcome the public opinion to help Foxconn to examine the shortcomings of management.”

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Workers advocates say the responses are not good enough. They believe Apple needs to reexamine its relationship with Foxconn, which also goes by the name Hon Hai Precision Industry Co. and is owned by Taiwanese billionaire Terry Gou.

China Labor Watch called Foxconn’s pledge to review its management an empty promise. The New York workers rights group released a report last year alleging forced overtime, unpaid wages and poor dormitory conditions.

The group said employees toiled in a “dehumanizing” environment where they underwent “brainwashing” to adhere to rules. The group said there was one advantage to working in the Apple division: Workers are given stools.

It’s unclear how Apple will react to the latest controversy. When news broke several years ago that Foxconn was underpaying workers to make iPods, Apple responded by bolstering its audits and pushing harder for international standards for working conditions, said Stephen Frost of Corporate Social Responsibility in Asia.

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He noted that Foxconn’s total revenue last year, $59.35 billion, was greater than Apple’s $32.4 billion (though its profit margin was much slimmer).

A company such as Foxconn, which has plants across the globe, does not need to depend on Apple’s business, Frost said.

“That’s a big issue because the perception is clients can boss around manufacturers and force certain things into the supply chain,” he said. “It’s not clear to me that Apple can just walk in there and sort this out.”

Though hardly perfect, Frost said, Foxconn does not rank among the worst offenders in China when it comes to labor practices. He said its task is complicated by having so many clients in competition with one another -- making security between the factory lines crucial, especially for high-profile products such as iPhones that rely on surprise for marketing.

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Labor activists said that emphasis on security places immense pressure on factory workers.

“Foxconn doesn’t have a very good reputation in terms of management,” said Geoffrey Crothall, a spokesman for the Hong Kong-based China Labor Bulletin.

“It’s like a fortress: very tightly run. It has a security department that plays a major role in management.”

He Jiankang works in the research and development department of Foxconn in Shenzhen. He said it was difficult adjusting to the job. He’s not paid overtime if he doesn’t meet his assigned goals for the day in time; he’s not allowed access to the Internet at work and he’s banned from bringing in electronic equipment such as an MP3 player.

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But he said what worried him the most was the threat of being scrutinized by the factory’s security officials.

“If those guards do come to you, for sure you’ll feel a lot of pressure,” said He, 27.

“For a young guy like me, the pressure is absolutely overwhelming.”

The security supervisor suspended and under police investigation in Sun’s death is now the target of online vigilantes.

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At www.foxlife.cn, a website devoted to Foxconn employees, Web users gathered personal information on the supervisor, Gu Qinming. They posted his cellphone number, office address, badge number, date of birth and hometown.

“Lets find a day off and beat him with bricks,” one post says.

Gu, whose phone numbers rang unanswered, told the Southern Metropolis Daily that Sun was uncooperative during his interview and that he could not understand why he was being blamed for the man’s suicide.

“Sun Danyong was very shy,” Gu told the paper. “He talked slow. I had to push him to get an answer. But he didn’t have an explanation” for the missing phone.

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“On the Internet, I look like a murderer,” he said. “Everyone thinks I’m the one who pushed him to commit suicide. Sometimes I ask myself, ‘What did I do to him?’ ”

Sun’s older brother is still searching for answers, but for now, he said he must comfort his parents, who have spent recent days crying uncontrollably.

“Three hours before he died, I was chatting normally with him on the Internet,” said Sun Daxiong, 28.

“I couldn’t know what was going on in his head.”

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david.pierson@latimes.com

alex.pham@latimes.com

Tommy Yang and Nicole Liu in The Times’ Beijing Bureau contributed to this report.

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