Foxconn struggles to take bigger toll on giant iPhone plant in China as more workers leave – source

  • Foxconn Zhengzhou plant’s November shipments fall further – source
  • Workers’ unhappiness at the factory escalated into protests this week
  • Over 20,000 workers, mostly new recruits, have quit – source

TAIPEI, Nov 25 (Reuters) – Foxconn’s ( 2317.TW ) flagship iPhone factory in China is set to see November shipments further reduced by the latest bout of labor unrest this week, a source with direct knowledge of the matter said on Friday. when thousands of employees left the site.

The company could now see more than 30% of the site’s production in November affected, up from an internal estimate of up to 30% when the factory’s labor problems started 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 world’s largest Apple ( AAPL.O ) iPhone factory has struggled with strict COVID-19 restrictions that have fueled worker discontent and disrupted production ahead of Christmas and January’s Lunar New Year holiday, as many workers were either put into isolation or fled. facility.

That has raised concerns about Apple’s ability to supply products for the busy holiday period, as the Zhengzhou plant accounts for 70% of global iPhone shipments and makes the US company’s popular iPhone 14 models.

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

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 pay-related “technical error” in hiring on Thursday, and later offered 10,000 yuan ($1,400) to protesting new recruits who agreed to resign and walk.

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 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 Thursday it had employees at the factory, did not immediately respond to a request for comment Friday.

The plant employed more than 200,000 workers before the problems began. It has dormitories, restaurants, basketball courts and a soccer field across the sprawling facility of about 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 those who left had not yet been trained or started working, their departures 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.

“There’s only so much companies can do with pandemic prevention … It’s been a problem for a while. This is a problem facing everybody,” the person said, pointing to other labor unrest sparked by rigid COVID restrictions, including upheaval at another Apple supplier, Quanta ( 2382.TW ), in May.

Foxconn shares closed down 0.5%, following the broader market, (.TWII) which ended 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: Thomson Reuters Trust Principles.

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