Foxconn’s woes take bigger toll on giant Chinese iPhone factory as more workers leave – source

  • Foxconn Zhengzhou factory deliveries fall further in November – source
  • Dissatisfaction among plant workers 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 factory in China is expected to see further reductions in November deliveries due to the latest worker 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 plant’s November output affected, up from an internal estimate of as much as 30% when the plant’s workforce 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 until the end of this month, the source added.

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

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

On Wednesday, the workers, most of whom were newly hired in recent weeks, clashed with security officials.

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

Foxconn apologized for a “technical error” related to pay in Thursday’s hiring and later offered 10,000 yuan ($1,400) to protesting new recruits who agreed to resign and walk away.

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

“Time to go home,” wrote one person.

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, before its woes began, employed more than 200,000 workers. It has dormitories, restaurants, basketball courts and football fields across its sprawling facility of roughly 1.4 million square meters (15 million sq ft).

Another Foxconn source familiar with the matter said some new hires have left the campus, but did not specify how many. The person said that because the people leaving have not yet been trained or started working, their departures will 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 businesses can do in terms of pandemic prevention … It’s been a problem for a while. It’s a problem everyone faces,” the person said, pointing to other employee unrest sparked by strict COVID restrictions, including an uproar at another. Apple supplier Quanta ( 2382.TW ) in May.

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

($1 = 7.1616 Chinese Yuan Renminbi)

Reporting by Yimou Lee; More news Brenda Goh; Editing by Anne Marie Roantree, William Mallard and Gerry Doyle

Our standards: Thomson Reuters Trust Principles.

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