Apple subjects Foxconn, partners to labor scrutiny

Customers buy Apple products inside the newest Apple Store during its opening on the East Balcony in the main lobby of New York City's Grand Central Station December 9, 2011.

SAN FRANCISCO (Reuters) - Apple Inc said on Monday that a U.S. non-profit labor group has begun an "unprecedented" inspection of working conditions at its main contract manufacturers, including Foxconn's plants in southern China, as the maker of the IPhone continues to grapple with persistent image problems there.

"The inspections now underway are unprecedented in the electronics industry, both in scale and scope," Apple Chief Executive Tim Cook said in a statement.

The world's most valuable technology corporation had agreed to let the D.C.-based Fair Labor Association monitor conditions at the factories of its suppliers, hoping to counter criticism that it was glossing over problems at these facilities.

The group began on Monday to interview thousands of employees, inspect manufacturing areas, dormitories and do an extensive review of documents relating to employment, Apple said.

Critics say the biggest blemish on Apple in recent years has been signs of harsh working conditions at its manufacturing partners, particularly in China.

Working conditions at Foxconn, whose flagship unit is Taiwan's Hon Hai Precision Industries group, has in particular been a constant thorn in the company's side.

In 2009, reports of a rash of worker suicides surfaced at Foxconn, which puts together the iPhone and iPad at factories in southern China that activists say subject a mostly migrant labor population to slavish work conditions, including over-long hours.

Apple has responded by launching independent audits and publishing the results.

In January, it published a report detailing an audit of working conditions of its entire supply chain - of about 170 companies all told - an unprecedented level of disclosure that won plaudits from several rights groups.

Apple said a team from FLA began the first inspections Monday morning at Foxconn's facility in Shenzhen known as Foxconn City, Apple said.

The team also is inspecting Foxconn's facility in Chengdu, China, where three people were killed last year in a blast. The explosion in Chengdu was the latest setback at Foxconn.

Inspections will also be done at facilities owned by other Apple suppliers Quanta and Pegatron later this year, Apple said.

Meanwhile Apple's shares rose to over $500 in morning trading on the Nasdaq, setting a record high on strong iPhone 4S demand and investor optimism on the potential launch of a new iPad tablet.

(Reporting By Poornima Gupta. Editing by Gunna Dickson)