Foxconn’s woes will further hurt giant Chinese iPhone factory as more workers – source

Foxconn's woes will further hurt giant Chinese iPhone factory as more workers - source
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  • Foxconn’s Zhengzhou factory November deliveries to drop further – source
  • Workers’ unhappiness at the plant turned into protests this week
  • More than 20,000 workers, mostly new hires, have left – source

TAIPEI, Nov 25 (Reuters) – Foxconn’s (2317.TW) A flagship iPhone factory in China is set to see further reductions in November shipments due to recent labor unrest this week, with thousands of workers leaving the site on Friday, a source with direct knowledge of the matter said.

The source said the company could see more than 30% of the site’s November production affected, up from internal estimates of up to 30% when labor problems began at the factory in late October.

The source added that the site, which is the only factory where Foxconn manufactures premium iPhone models, including the iPhone 14 Pro, is unlikely to resume full production before the end of this month.

The largest Apple company in the world (AAPL.O) The iPhone factory is grappling with strict COVID-19 restrictions that have fueled discontent among workers and halted production in the run-up to Christmas and the January New Year holiday, as many workers have either been isolated or fled the plant.

That raised concerns about Apple being able to deliver products for the busy holiday season.

New workers, most of whom were hired in recent weeks, clashed with security guards at the Zhengzhou plant in central China on Wednesday.

Many claimed they were cheated of factory compensation benefits, while others complained of sharing dormitories with co-workers who had tested positive for COVID.

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

The source said more than 20,000 workers, mostly new workers who had not yet worked on the production lines, took the 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,” one person wrote.

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

The plant employed more than 200,000 workers before the troubles began. The nearly 1.4 million square meter (15 million square foot) sprawling facility features dormitories, restaurants, basketball courts, and a soccer field.

Another Foxconn source familiar with the matter said some new hires have left the campus, but did not provide a number. The person says that because those who are leaving have not yet been trained or started, their departure will not cause further damage to current production.

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

“There’s a lot that corporates can do to contain the pandemic … It’s been a problem for a while. It’s a problem that everybody’s facing,” the person said, pointing to other labor unrest caused by strict COVID restrictions, including upheavals elsewhere. Apple supplier, Quanta (2382.TW)in may

Foxconn shares fell 0.5%, underperforming the broader market. (.TWII) straight finisher.

This week, hundreds of workers joined protests at Foxconn’s biggest iPhone factory in Zhengzhou, China, 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; Edited by Anne Marie Roantree, William Mallard and Gerry Doyle

Our standards: Thomson Reuters Trust Principles.

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