Column: Apple will regret throwing its suppliers under the bus

Eighteen months ago, Apple(NASDAQ:AAPL) joined the Fair Labor Association and released the names of its suppliers. It was an unexpected move by new CEO Tim Cook.

Under Steve Jobs, the company had cultivated close and often monogamous relationships with its Asian suppliers and had kept quiet about them.

When Foxconn (TPE:2354) suffered a rash of suicides in 2010 and iPhone 4 supply problems later that year, Apple stood by its manufacturer but said little.

Their partnership was based on trust – a prized quality in China, and better protection than any contract – which required that neither company do anything that might jeopardize the other’s business.

The first sign of change came in mid-2011, when Cook (as acting CEO) began to diversify Apple’s supply chain, sending some iPhone assembly to one of Foxconn’s competitors, Pegatron (TPE:4938).

Then, after Apple's suppliers’ names were released in January 2012, the New York Times led a wave of critical investigations into working conditions.

Apple fought the bad PR by initiating an independent audit of several Foxconn facilities – in essence, throwing its supplier under the bus.

Predictably, the developing world manufacturer failed to live up to developed world standards, and it was forced to make damaging concessions.

CEO Steve Gou promised that Foxconn would double wages by the end of 2013 and cut overtime hours by more than half.

Full story at Minyanville.