Foxconn Woes to Take Bigger Toll on China’s Giant iPhone Plant as More Workers Leave -source

  • Foxconn Zhengzhou plant November shipments to decline further – source
  • The unhappiness of the workers at the plant escalated into protests this week
  • More than 20,000 workers, mostly new hires, have left the source

TAIPEI, Nov 25 (Reuters) – Foxconn’s (2317.TW) major iPhone plant in China will see its November shipments further reduced by the latest bout of workers’ unrest this week, a source with direct knowledge of the matter he said on Friday, as thousands of employees left the site.

The company could now see more than 30% of the site’s November output affected, compared with an internal estimate of up to 30% when the factory worker woes began in late October, the source said.

The site, which is the only factory where Foxconn produces premium iPhone models, including the iPhone 14 Pro, is unlikely to resume full production by the end of this month, the source added.

The world’s largest Apple iPhone factory (AAPL.O) grappled with tough COVID-19 restrictions that fueled unrest among workers and halted production ahead of Christmas and the January Lunar New Year holiday as many workers have been placed in solitary confinement or have fled the plant.

It has fueled concerns about Apple’s ability to supply products for the holiday season, as the Zhengzhou plant accounts for 70% of global iPhone shipments and produces the US company’s popular iPhone 14 models.

Workers, mostly new hires in recent weeks, clashed with security personnel on Wednesday.

Many said they were duped about factory compensation benefits and others complained of sharing dormitories with colleagues who had tested positive for COVID.

Foxconn apologized for a “technical error” related to pay during hiring on Thursday, and later offered 10,000 yuan ($1,400) to protest new recruits who agreed to resign and leave.

The source said more than 20,000 workers, mostly new hires not yet working on production lines, took the money and left. Videos posted on Chinese social media on Friday show crowds and long lines of workers laden with luggage queuing for buses.

“Time to go home,” one person posted.

Foxconn, formally known as Hon Hai Precision Industry Co, declined to comment. Apple, which said Thursday it has staff at the factory, did not immediately respond to a request for comment on Friday.

The plant, before its problems began, employed more than 200,000 people. It has dormitories, restaurants, basketball courts, and a soccer field throughout its sprawling approximately 1.4 million square meter (15 million square foot) structure.

Another Foxconn source familiar with the matter said some new hires had left the campus but didn’t specify how many. This person said that since the departing people had not yet been trained or started work, their departures would not cause further damage to current production.

“The incident has a large impact on our public image but little on our (current) capacity. Our current capacity is unaffected,” the source said.

“There’s only so much companies can do about pandemic prevention… It’s been a problem for a while. This is a problem faced by everyone,” the person said, pointing to other worker unrest triggered by the strict COVID restrictions, including the disruption at another Apple Supplier, Quanta (2382.TW), in May.

Shares of Foxconn closed 0.5% lower, lagging the broader market, (.TWII) which finished flat.

($1 = 7.1616 Chinese Yuan Renminbi)

Reporting by Yimou Lee; Additional reporting by Brenda Goh; Editing by Anne Marie Roantree, William Mallard and Gerry Doyle

Our standards: the Thomson Reuters Trust Principles.

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