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Foxconn apologizes for payment error at China iPhone plant after worker riots

Foxconn apologizes for payment error at China iPhone plant after worker riots
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  • Foxconn says it is working with staff to resolve disputes
  • Major iPhone factory rocked by wage and condition protests
  • Apple says it has a team in Zhengzhou

TAIPEI/SHANGHAI, November 24 (Reuters) – Foxconn (2317.TW) It said on Thursday a pay-related “technical error” occurred while hiring new employees at a COVID-hit iPhone factory in China and apologized to workers after the company was rocked by fresh labor unrest.

The men broke through surveillance cameras and clashed with security personnel and hundreds of workers. protested at the world’s largest iPhone plant in the city of Zhengzhou on Wednesday, in rare scenes of open dissent in China sparked by claims of late payments and frustration over harsh COVID-19 restrictions.

The workers said in videos that circulated on social media that they had been informed that Apple Inc. (AAPL.O) The provider intended to delay bonus payments. Some workers also complained that they were forced to share dormitories with colleagues who had tested positive for COVID.

“Our team has been investigating the matter and discovered that a technical error occurred during the onboarding process,” Foxconn said in a statement, referring to the hiring of new workers.

“We apologize for an input error in the computer system and guarantee that the actual salary is the same as the agreed salary and the official recruitment posters.” He did not elaborate on the error.

The apology was a radical departure from the previous day when Foxconn said it had honored its payment contracts.

The unrest comes at a time when China is registering record numbers of COVID-19 infections and dealing with more and more lockdowns that have fueled frustration among citizens across the country. But it has also exposed communication problems and mistrust of Foxconn management among some staff.

Larger protests had died down and the company was reaching out to employees taking part in smaller protests, a Foxconn source familiar with the matter told Reuters on Thursday.

The person said the company had reached “initial agreements” with employees to resolve the dispute and that production at the plant was continuing.

Growing worker discontent over the COVID outbreaks, strict quarantine rules and food shortages had caused many employees to flee the factory’s closed campus since October after management implemented a so-called closed-loop system that isolated the plant of the rest of the world.

Many of the new recruits had been hired to replace workers who had fled, estimated by some former employees to be in the thousands.

The Taiwanese company said it would respect the wishes of new employees who wanted to resign and leave the factory campus, and would offer them “attention allowances.” The Foxconn source said the subsidies amounted to 10,000 yuan ($1,400) per worker.

APPLE RISKS

The Foxconn logo is seen on a glass door at its office building in Taipei, Taiwan, November 12, 2020. REUTERS/Ann Wang

Home to more than 200,000 workers, Foxconn’s Zhengzhou plant has dormitories, restaurants, basketball courts and a soccer field in its sprawling, roughly 1.4 million-square-meter facility.

The factory makes Apple devices, including the iPhone 14 Pro and Pro Max, and accounts for 70% of iPhone shipments globally.

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Apple said it had staff at the factory and was “working closely with Foxconn to ensure their employees’ concerns are addressed.”

Several activist shareholders told Reuters the protests showed the risks Apple faces due to its reliance on manufacturing in China.

“Apple’s extreme reliance on China, both as a (consumer) market and as its primary manufacturing location, makes us view a very risky situation,” said Christina O’Connell, a senior manager at SumOfUs, a nonprofit corporate responsibility group. profit. . .

Reuters reported last month that iPhone production at the Zhengzhou factory could drop as much as 30% in November and that Foxconn was aiming to resume full production there by the second half of the month.

The Foxconn source familiar with the matter said it was not immediately clear how much impact the worker protests could have on November production and that it could take a few days to resolve, citing the large size of the factory.

A separate source has said that the riots had ensured that they would not be able to resume full production by the end of the month.

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Apple has warned that it expects lower shipments of premium iPhone 14 models than previously anticipated.

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($1 = 7.1353 Chinese yuan)

Reporting by Yimou Lee in Taipei and Brenda Goh in Shanghai; Additional reporting by Ross Kerber in Boston, Beijing Newsroom and Yew Lun Tian; Edited by Anne Marie Roantree, Stephen Coates and Edwina Gibbs

Our standards: The Thomson Reuters Trust Principles.

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