Foxconn woes at giant China iPhone plant to take bigger toll as more workers leave – sources

Foxconn woes at giant China iPhone plant to take bigger toll as more workers leave - sources
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  • Foxconn Zhengzhou plant’s November shipment to drop further – source
  • Workers’ discontent at the factory turned into protests this week
  • More than 20,000 workers, mostly new hires, are left-sourced

TAIPEI, Nov 25 (Reuters) – Foxconn (2317.TW) China’s flagship iPhone plant is set to further reduce November shipments in the latest blow to labor unrest this week, a source with direct knowledge of the matter said Friday, as thousands of workers walk off the site.

The company could now see more than 30% of the site’s November production affected, up from internal estimates of up to 30% when factory workers’ 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 world’s largest apple (AAPL.O) The iPhone factory is grappling with strict COVID-19 restrictions that have fueled unrest among workers and disrupted production ahead of the Christmas and January Lunar New Year holidays, as many workers were either laid off or fled the plant.

This has raised concerns about Apple’s ability to deliver products for the busy holiday season.

Workers, most of them new recruits hired in recent weeks, clashed with security personnel at the Zhengzhou plant in central China on Wednesday.

Many claimed they were confused about compensation benefits at the factory and others complained about sharing dormitories with colleagues who tested positive for Covid.

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

The source said more than 20,000 workers, mostly new hires who had not yet worked on the production line, walked away with money. Videos posted on Chinese social media on Friday showed crowds and long lines of workers laden with luggage queuing for buses.

“It’s 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 workers at the factory, did not immediately respond to a request for comment Friday.

The plant, before its woes began, employed more than 200,000 workers. Its approximately 1.4 million-square-meter (15 million-square-foot) facility includes dormitories, restaurants, basketball courts, and a soccer pitch.

Another Foxconn source familiar with the matter said some new hires have left the campus but did not elaborate on how many. The person said that since those leaving have not yet been trained or started working, their departure will not further damage current production.

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

“There’s only so much corporates can do to prevent the pandemic … it’s been a problem for some time. It’s a problem everyone is facing,” the person said, pointing to other labor unrest sparked by stricter COVID restrictions, including another worker unrest. Apple supplier, Quanta (2382.TW)In May.

Foxconn shares fell 0.5%, lagging the broader market. (.TWII) which is flat ended.

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

($1 = 7.1616 Chinese Yuan Renminbi)

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

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