Foxconn woes will weigh heavier on China’s giant iPhone factory as more workers leave – source

  • November shipments from Foxconn’s Zhengzhou plant to drop further – source
  • Workers’ discontent at the factory turned into protests this week
  • More than 20,000 workers, mostly new recruits, left – source

TAIPEI, Nov 25 (Reuters) – Foxconn’s (2317.TW) flagship iPhone plant in China is expected to see its November shipments further reduced by the latest bout of labor unrest this week, a source told the Reuters on Friday. current of the case. as thousands of employees left the site.

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

The site, which is the only factory where Foxconn manufactures high-end iPhone models, including the iPhone 14 Pro, is not expected to resume full production by the end of this month, the source added.

The world’s largest Apple iPhone factory (AAPL.O) is grappling with strict COVID-19 restrictions that have fueled worker discontent and disrupted production ahead of January’s Christmas and Lunar New Year holidays , as many workers were isolated or fled the plant.

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

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

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

Foxconn apologized for a payroll-related “technical error” during hiring on Thursday, and later offered 10,000 yuan ($1,400) to protesting new hires who agreed to quit and leave.

The source said more than 20,000 workers, mostly new recruits who were not yet working on the production lines, took the money and left. Videos posted Friday on Chinese social media showed crowds and long lines of luggage-laden workers queuing for buses.

“Time to go home,” one person posted.

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

The factory, before its woes began, employed over 200,000 people. It has dormitories, restaurants, basketball courts, and a soccer field across its sprawling facility of approximately 1.4 million square meters (15 million square feet).

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

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

“There’s not much companies can do about pandemic prevention…It’s been a problem for a while. It’s a problem everyone is facing,” the person said, pointing out others worker unrest triggered by rigid COVID restrictions, including upheavals at another. Apple’s supplier, Quanta (2382.TW), in May.

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

Hundreds of workers joined protests this week at Foxconn’s main Chinese iPhone factory in Zhengzhou, 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; Editing by Anne Marie Roantree, William Mallard and Gerry Doyle

Our standards: The Thomson Reuters Trust Principles.

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