Foxconn apologizes for pay error at Chinese iPhone factory after worker unrest


  • Foxconn says it is working with workers to resolve the dispute
  • A major iPhone factory has been rocked by protests over wages and conditions
  • Apple said it has a team on the ground in Zhengzhou

TAIPEI/SHANGHAI, Nov 24 (Reuters) – Foxconn ( 2317.TW ) said on Thursday it apologized to workers after a “technical error” regarding wages while hiring new hires at its iPhone factory in China due to the COVID-19 pandemic. with fresh labor unrest.

Hundreds of workers protested at the world’s largest iPhone factory in Zhengzhou on Wednesday, men broke surveillance cameras and clashed with security guards in scenes of open discontent that erupted over claims of overdue pay and frustration over China’s strict COVID-19 restrictions.

Workers said in videos posted on social media that they had been informed that an Apple Inc ( AAPL.O ) supplier intended to delay bonus payments. Some workers also complained about having to share dormitories with colleagues who tested positive for COVID.

“Our team investigated the matter and found that a technical error occurred during boarding,” Foxconn said, referring to the hiring of new employees.

“We apologize for the input error in the computer system and guarantee that the actual payment is the same as the agreed and official recruitment posters.” No details were given about the error.

The apology came a day before Foxconn said it had honored payment agreements.

The unrest comes as China records a record number of COVID-19 infections and grapples with an increasing lockdown that has fueled frustration among citizens across the country. But it also revealed communication problems among some workers and distrust of Foxconn management.

The largest protests have ended and the company has contacted workers involved in smaller protests, a Foxconn source familiar with the matter told Reuters on Thursday.

The person said the company had reached “preliminary agreements” with workers to resolve the dispute and that production was continuing at the plant.

Rising worker discontent over the spread of COVID, strict quarantine rules and food shortages has seen many workers flee the closed factory campus since October, after management imposed a closed-loop system that isolated the plant from the wider world.

Many new hires have been hired to replace those who have fled – some ex-employees number in the thousands.

The Taiwanese company said it would respect the wishes of new hires who want to resign and leave the factory campus and offer them “care subsidies.” A Foxconn source said the subsidies were 10,000 yuan ($1,400) per worker.

RISKS OF ACQUISITION

Foxconn’s Zhengzhou factory, which is home to more than 200,000 workers, has dormitories, restaurants, basketball courts and a soccer field with an area of ‚Äč‚Äčabout 1.4 million square meters.

The plant produces Apple devices including the iPhone 14 Pro and Pro Max and accounts for 70% of iPhone shipments worldwide.

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Apple said it has staff at the factory and is “working closely with Foxconn to ensure the concerns of its employees are resolved.”

Several shareholder activists told Reuters that the protests showed the risks Apple faces in relying on manufacturing in China.

“We see Apple’s over-reliance on China as both a (consumer) market and a major manufacturing location as a very risky situation,” said Christina O’Connell, general manager of SumOfUs, a nonprofit corporate accountability group. .

Reuters reported last month that iPhone production at the Zhengzhou factory could be cut by 30% in November, and that Foxconn plans to resume full production there by the second half of the month.

A Foxconn source familiar with the matter said it was not immediately clear how much the worker protests might affect production for November, citing the size of the factory, and said it could take several days to resolve.

A separate source said he was confident the unrest would not allow full production to resume before the end of the month.

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Apple has warned that it expects a lower supply of premium iPhone 14 models than previously expected.

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($1 = 7.1353 Chinese yuan)

Reporting by Yimou Lee in Taipei and Brenda Goh in Shanghai; Additional reporting by Ross Kerber in Boston, Beijing Newsroom and Yew Lun Tian; Edited by Anne Marie Roantree, Stephen Coates and Edwina Gibbs

Our standards: Thomson Reuters Trust Principles.



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