Dyson splits with Malaysia supplier over migrant worker treatment

A short drive across the border from Dyson's new headquarters in Singapore is the boomtown built around its business: a Malaysian industrial area dominated by its biggest supplier, ATA IMS Bhd.

ATA, one of Malaysia's top electronics manufacturing services providers, rode Dyson's success in high-end vacuum cleaners and air purifiers, supplying parts for a company that came to account for 80% of its revenue.

Ten current and former employees, and a former ATA executive, say the growth came at an unseen cost: its mostly migrant work force worked up to 15 hours a day, were often asked to skip rest days to keep up with demand, and were coached to hide true working and living conditions from labour inspectors and Dyson.

In interviews over the last two months, the employees also say ATA, which analysts say is Dyson's biggest global contract manufacturer, hired thousands of foreigners without work permits.

After questions from Reuters on Nov. 18, Dyson last month said it would pull its business from ATA in six months, citing a recent independent audit on conditions for workers and allegations by an unidentified whistleblower.
ATA said in a statement it was audited by the Responsible Business Alliance (RBA), a body widely engaged by electronics firms to conduct factory audits. RBA hires third-party auditors for the inspections. It declined to comment.

On Nov. 29, ATA said it had seen the summary of Dyson's audit, which found poor living conditions, concerns of retaliation and unpaid allowances, among other issues. It described the findings as "non-conclusive" and said it was reviewing them. Reuters has not seen the audit.
ATA declined to comment, and referred Reuters to its recent public statements.

Dyson said on Tuesday it wouldn't comment because the accusations related to ATA.
Malaysia on Wednesday said it would charge ATA over complaints it had received through the labour department. It did not say what the charges or complaints were about or whether they related to the workers' accusations about its Dyson factories.

The country's human resources minister, M. Saravanan, said forced labour allegations at Malaysian companies were hurting foreign investors' confidence in products manufactured there. He had earlier said the government was investigating Dyson's decision to split with ATA.
After Dyson's move, ATA shares dropped 60%. Some analysts have raised doubts about ATA's ability to attract new customers, and on Nov. 29 a statement from the firm forecast revenue declines and cost cuts.

With Dyson's departure, six workers and shopkeepers interviewed in the Johor Bahru industrial area said they feared they might lose their livelihoods.
"There is no guarantee of a job here anymore," said one off-duty ATA worker, wearing his royal-blue factory work shirt on a recent Sunday. Like others, he asked not to be identified for fear of reprisal.

ATA officially employs around 8,000 workers, although four ATA workers and the former executive estimated its workforce had been as high as 17,000 until recently, including those without permits. Most of 17,000 were from Bangladesh and Nepal, according to the workers and executive.