Inside a Chinese iPhone factory, Foxconn wrestles with the chaos of Covid

Hong Kong –

Foxconn Technology

2354 -0.76%

The group is scrambling to contain A Covid-19 outbreak for weeks At an iPhone factory in central China, trying to appease panicked and frustrated workers during a crucial period for smartphone orders.

At Foxconn’s main facility in Zhengzhou, the world’s largest assembly site for

apple a company

AAPL 7.56%

iPhones, hundreds of thousands of workers have been put under a closed loop system for about two weeks. They are largely isolated from the outside world, and are only allowed to move between their residences or homes and production lines.

Many said they were confined to their accommodation for several days and that the distribution of food and other necessities was chaotic. Many other people say they are too afraid to continue working because of the risk of infection.

Foxconn on Wednesday denied what it said were rumors online that 20,000 cases had been discovered at the site and said it was providing supplies for “a small number of employees affected by the pandemic.”

“A sudden outbreak disrupted our normal lives,” Foxconn said Friday in a letter to its workers on Friday.

WeChatAnd the

Social media platform. “Achieving orderly progress in both epidemic prevention and its outcomes depends on the efforts of all staff,” she said. It has outlined plans to ensure adequate food supplies and mental health support and pledged to respond to workers’ concerns.

When asked about workers’ details of the situation at the site, Foxconn did not respond. Earlier when the company was asked about the situation, it referred to its Wednesday statement as well as its Friday post on WeChat.

Covid-19 lockdowns, crackdown on corruption, and more have put the Chinese economy on a potentially rampant path. Dion Rabouin of the Wall Street Journal explains how the economic downturn in China could hurt the United States and the rest of the world. Illustration: David Fang

“It’s too dangerous to go to work,” a 21-year-old worker who was confined to his dorm told the Wall Street Journal, saying he was skeptical of the company’s claim that there was a low level of injuries at the plant. .

The turmoil at Foxconn is the latest example of Economic and societal losses caused by China’s strict anti-epidemic policies—which includes rapid and massive lockdowns, mass testing and mandatory quarantines to crush the virus whenever it appears. While Beijing says the virus is too strong to allow any easing of its no-Covid-19 policy, companies must convince their employees that there are few risks that may come to business when there are signs of an outbreak.

The outbreak in Zhengzhou – 95 cases recorded in the city over the past four days – began in early October, after people from other parts of the country returned from a one-week national holiday. When the first signs of the Covid virus appeared in the city, officials closed some areas and began rounds of mass testing to eradicate the virus before it gained a foothold among Zhengzhou’s 12.7 million residents. As a major employer, Foxconn joined the campaign.

When more infections surfaced at Foxconn in the middle of the month, the company sought to maintain production by creating a “bubble” around its operations to reduce exposure risk, It is a common practice now among the major manufacturers in China To continue their business during the local outbreak.

Foxconn says it employs up to 300,000 workers in Zhengzhou. Analysts estimate that the company Half or more of Apple smartphones are produced in the citymaking it vital to getting iPhones to consumers, including the upcoming winter holiday season when demand for phones usually rises.

Foxconn, in its statement on Wednesday, said on-site production is “relatively stable” and that it is sticking to its operating forecast for the current quarter when the impact of the outbreak can be controlled. It is due to report quarterly results on November 10.

Apple in Release its quarterly dividend Thursday, Zhengzhou Foxconn factory was not mentioned. The company’s chief financial officer said supply is restricted for new iPhone 14 Pro models due to strong demand.

Apple did not respond to requests for comment on conditions at the Foxconn plant.

Some workers interviewed by the newspaper said that many colleagues refused to return to the production lines. They said others simply left, sometimes giving away their belongings.

On Sunday, a government newspaper in Henan published official notices from across the province welcoming the return of its citizens, with quarantine protocols in place.

Over the weekend, videos geotagged near Foxconn went viral on social media platforms in China, recording groups of people walking on highways or through agricultural fields with bags and backpacks. Other footage showed makeshift stations set up by local residents offering water bottles in front of handwritten signs in support of Foxconn migrant workers leaving for their homes.

Foxconn said in a statement on Sunday that the situation was brought under control with the help of the authorities. The company said it is organizing transportation for workers who want to go home and is coordinating production capacity with its plants elsewhere to reduce outages. She added that there was no shortage of medical supplies or daily necessities at the facility.

Earlier on Friday, the company posted a video on WeChat urging people to get back to work. “The company needs people,” a woman said via footage of workers getting off the bus. “If no one comes to work, how can the company operate?”

Another Foxconn employee said most of his team of 12 night-shift workers were either taken to a quarantine facility or refused to return to work. Every night, he said, he saw workers covered in protective clothing waiting to be bused.

“I don’t know who’s around me a positive case,” said the worker, who was confined to his dormitory for a few days. “It would be better to stay in the dorm.”

Two workers said that with many stuck at their workplaces, sent to quarantine centers or simply absent from work, the pace of production on some assembly lines had slowed.

Foxconn has created incentives to maintain production, according to the company’s notice on Friday.

She said anyone who showed up to work would get free meals and a daily bonus. Those who attend every business day from October 26 to November 11 will receive a prize of 1,500 yuan, or about $200.

The 21-year-old employee, who spoke to the newspaper and worked in an assembly line working on an older version of the iPhone, said he had been confined to his workplace since October 17, along with thousands of others.

Over the following days, he said, meal deliveries were delayed and trash was left unattended in the hallways, piling up on the ground floor as more dorms closed.

The daughter of one of the workers said that her mother was placed in the same accommodation with some of those who tested positive. Some other workers made similar complaints.

About 10 days ago, about 300 employees of Foxconn suppliers were asked to get out of their dormitories and sleep in the factory, one of them said.

In the photos he shared with the magazine, people slept on mattresses and pillows resting on metal bed frames, under white fluorescent lights hanging from the barn-like ceiling. He said hygiene had become an issue. However, he said he was not supposed to leave the factory – and had nowhere to go if he did.

“Where can I go? There are checkpoints everywhere,” he said. “There are people guarding every checkpoint.”

Business and the epidemic

write to Wenxin Fan at [email protected] and Selina Cheng at [email protected]

Copyright © 2022 Dow Jones & Company, Inc. all rights are save. 87990cbe856818d5eddac44c7b1cdeb8

See also  Stocks crash? No, but that's why this bear market is so painful - and what you can do about it.

Leave a Reply

Your email address will not be published.