Apple iPhone Factory in China Offers $1,400 Payments to Quell Worker Unrest


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Apple Inc.

AAPL 0.59%

said it was working to resolve worker complaints at the world’s biggest iPhone factory in China, after police were filmed beating protesting employees at the plant this week and employees began an exodus Thursday.

Labor groups have criticized Apple for failing to adequately protect the rights of workers at the vast Zhengzhou site, operated by


2317 0.50%

Technology Group and where most of the world’s iPhone 14 models are made. Workers clashed with police Tuesday, angry over delayed bonus payments and conditions at the plant, which has been battling an outbreak of Covid-19 for more than a month.

Apple said in a statement it has staff at the Zhengzhou site and it is working closely with Foxconn to ensure their employees’ concerns are addressed.

Foxconn on Thursday blamed “an input error in the computer system” that occurred during the onboarding process, which resulted in new hires receiving contracts intended for existing workers. The company said it guaranteed recruits will be paid what was agreed and in line with official recruitment posters.

Footage shows police in Covid-protective suits beating workers at Foxconn’s facility in Zhengzhou, China. The world’s biggest site making Apple smartphones had been under Covid-19 lockdowns in recent weeks. Screenshot: Associated Press

Foxconn also offered a 10,000 yuan payment, equivalent to $1,400, to newly recruited workers who wanted to leave their jobs and return home, according to text messages to them from the company’s human resources department shown to The Wall Street Journal by workers.

Many workers took up the offer and waited in long lines with their luggage before boarding buses to leave the plant on Thursday morning, according to several video live-streams from the site. One worker told the Journal he was among a large crowd of people who waited more than an hour to get a company bus that dropped him and his co-workers at a train station, adding that he had received the first installment of the payment.

The latest worker exodus adds to pressures on Apple’s iPhone 14 production, with the company having said before this week that shipments of its high-end iPhone models would be lower than expected because of disruptions at the plant from the recent Covid-19 outbreak.

The staff shortage in Zhengzhou caused by the recent Covid outbreaks even before this week’s unrest could see a roughly 10% impact in global iPhone production capacity, according to Ming-

Chi Kuo,

an analyst at TF International Securities who follows Apple’s supply chain. Apple’s chief financial officer said in October that supply is constrained for the new iPhone 14 Pro models amid strong demand.

A person was taken away by security personnel during the protest Wednesday at Foxconn’s iPhone factory compound in Zhengzhou, China.


Associated Press

Despite the economic slowdown, demand for high-end phones, such as the iPhone 14 Pro and Pro Max models—mostly made at Foxconn’s Zhengzhou site—is more resilient than for lower-end phones. Production disruptions this year linked to China’s Covid policies have prompted Apple to look to boost capacity outside of China, particularly in India and Vietnam, The Wall Street Journal has reported.

Apple has tried to also increase iPhone14 production at other sites in China since Zhengzhou’s Covid outbreak.

The violent clashes at the Zhengzhou plant marked new territory in Apple’s history of manufacturing most of its products in China, where it relies on cheap labor and well-developed component supply chains to churn out smartphones and other electronic devices that have propelled it to become among the world’s most valuable public company. Foxconn and other manufacturers have kept operations going through China’s strict zero-Covid policies under closed-loop systems that keep employees living and working in bubbles to reduce the potential spread of infections.

Production at the sprawling manufacturing site that houses more than 200,000 workers was disrupted when a Covid outbreak initially saw the company keep hordes of workers confined to empty apartment buildings or their accommodations near the site.

As Foxconn tightened Covid restrictions to keep assembly lines turning to meet Apple’s production demands, it saw thousands of workers leave in an exodus because they feared catching the disease, and amid rumors that infected people were being allowed to work so the company could meet its targets.

The revolt by recruits filling in for thousands who fled their jobs at the Zhengzhou plant showed the smartphone maker had failed to live up to its responsibilities as a global leader at the top of the supply chain when its suppliers violated workers’ human rights, said

Aiden Chow,

researcher of labor rights group China Labor Bulletin.

Apple has warned that shipments of its high-end iPhone models would be lower than expected because of Covid disruptions at the Foxconn plant.


Andy Wong/Associated Press

“It is unbelievable that police had to be deployed to get people back to work,” Mr. Chow said.

Zhengzhou’s government this week said the city would be largely locked down for five days starting Friday. Foxconn began operating a closed-loop system in mid-October, with workers only able to move between their lodging and the production lines.

Videos circulating on workers’ chat groups and on social media Wednesday showed chaotic scenes as workers took to the streets in several areas within the sprawling manufacturing complex. The protests were triggered after some newly hired workers received contracts showing that bonus payments would be released later than when they were promised during recruitment.

Workers who now want to quit the Zhengzhou plant were asked to register using an online form and will receive the exit payment in two installments, before and after they boarded vehicles home arranged by the government, Foxconn’s text message said. The fee would cover their salaries, transport and quarantine fees, it read.

—Wenxin Fan contributed to this article.

Write to Selina Cheng at [email protected] and Yang Jie at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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