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Foxconn woes will exact a bigger toll at giant China iPhone plant as more workers leave: source

Foxconn woes will exact a bigger toll at giant China iPhone plant as more workers leave: source
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  • Foxconn’s Zhengzhou plant’s November shipments to fall further: source
  • Worker discontent at the plant turned into protests this week
  • More than 20,000 workers, mostly new hires, have left – source

TAIPEI, November 25 (Reuters) – Foxconn’s (2317.TW) The flagship iPhone plant in China will see its November shipments further reduced by the latest outbreak of labor unrest this week, a source with direct knowledge of the matter 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, up from an internal estimate of as much as 30% when the factory worker problems began in late October, the source said.

The site, which is 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.

The biggest apple in the world (AAPL.O) The iPhone factory has been grappling with strict COVID-19 restrictions that have fueled discontent among workers and halted production ahead of the Christmas and Lunar New Year holidays in January, as many workers were placed in isolation or they fled the plant.

It has fueled concerns about Apple’s ability to deliver products for the busy holiday period.

On Wednesday, the workers, most of whom were new hires in recent weeks, clashed with security personnel at the Zhengzhou plant in central China.

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

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

The source said more than 20,000 workers, mostly new hires not yet working on the production lines, took the money and left. Videos posted on Chinese social media on Friday showed 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 on Thursday it had staff at the factory, did not immediately respond to a request for comment on Friday.

The plant, before its troubles began, employed more than 200,000 people. It has dormitories, restaurants, basketball courts, and a soccer field in its 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 give details on how many. This person said that since the people who were leaving had not yet been trained and had not started working, their departure would not cause further damage to current production.

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

“Businesses can’t do much in preventing the pandemic… It’s been a problem for a while. This is a problem everyone faces,” the person said, pointing to other worker unrest sparked by rigid COVID restrictions. , including turmoil at another Apple supplier, Quanta (2382.TW)In May.

Foxconn shares closed 0.5% lower, lagging the broader market. (.TWII) which ended up flat.

Hundreds of workers joined protests at Foxconn’s main iPhone plant in Zhengzhou, China, this week, with some men breaking surveillance cameras and windows, footage posted on social media showed.

($1 = 7.1616 Chinese yuan)

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

Our standards: The Thomson Reuters Trust Principles.

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