Foxconn’s woes are taking a greater toll on China’s giant iPhone factory as more workers leave – source

  • Foxconn Zhengzhou factory shipments will fall further in November – source
  • The misfortune of workers at the factory escalated into protests this week
  • More than 20,000 workers, mostly new recruits, have left – source

TAIPEI, Nov. 25 (Reuters) – Foxconn’s (2317.TW) flagship iPhone factory in China will further cut deliveries in November amid the latest wave of worker unrest this week, a source with direct knowledge of the matter said Friday, when thousands employees left the site.

The company could now see more than 30% of the site’s production affected in November, up from an internal estimate of up to 30% when the plant’s worker troubles began in late October, the source said.

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

Apple’s world’s largest iPhone factory (AAPL.O) is grappling with strict COVID-19 restrictions that have fueled employee discontent and disrupted production ahead of Christmas and the Chinese New Year holiday in January as many workers are either in isolation were placed or fled the country plant.

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

On Wednesday, workers, most of whom were new recruits hired in recent weeks, clashed with security personnel.

Many claimed they were misled about factory compensation benefits, and others complained about sharing dormitories with colleagues who had tested positive for COVID.

Foxconn apologized for a pay-related “technical error” in hiring on Thursday, later offering 10,000 yuan ($1,400) to protesting 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 to Chinese social media on Friday showed crowds and long lines of luggage-laden workers queuing for buses.

“It’s time to go home,” one person wrote.

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

Before the disaster started, the factory employed more than 200,000 people. It has dormitories, restaurants, basketball courts, and a soccer field scattered throughout the sprawling facility of approximately 1.4 million square meters (15 million square feet).

Another Foxconn source familiar with the matter said some new hires had left the campus, but did not elaborate on how many. This person said that because the people leaving had not yet been trained or started working, their departure would not cause any further damage to current production.

“The incident has a major impact on our public image, but little on our (current) capacity. Our current capacity will not be affected,” said the source.

“There’s only so much businesses can do about pandemic prevention… It’s been a problem for a while. This is an issue that affects everyone,” the person said, pointing to other employee unrest caused by rigid COVID restrictions, including one in another. Apple supplier, Quanta (2382.TW), in May.

Foxconn shares closed 0.5% lower, trailing the broader market (.TWII) which finished flat.

($1 = 7.1616 Chinese Yuan Renminbi)

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

Our Standards: The Thomson Reuters Principles of Trust.

Leave a Reply

Your email address will not be published. Required fields are marked *