Inside a Chinese iPhone Plant, Foxconn Grapples With Covid Chaos

HONG KONG — Foxconn 2354 Technology -0.76%

The Group is scrambling to contain a week-long Covid-19 outbreak at an iPhone factory in central China, trying to appease frightened and frustrated workers during a critical period for smartphone orders.

In the main Zhengzhou Foxconn facility, the world’s largest assembly site for Apple inc

AAPL 7.56%

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

Also Read :  China sends students home, police patrol to curb protests

Many said they have been confined to their quarters for days and the distribution of food and other basic necessities has been very chaotic. Many others say they are too scared to continue working because of the risk of infection.

Also Read :  These rental markets were most ‘competitive’ in 2022: report

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

“A sudden outbreak has disrupted our normal lives,” Foxconn said Friday in a post to its workers on WeChat,

social media platform. “Orderly progress in pandemic prevention and output depends on the efforts of the entire team,” he said. He outlined plans to ensure proper food supplies and mental wellbeing support and promised to respond to workers’ concerns.

Also Read :  Gaming 'somewhat resilient' to weak economy

When asked for details of the workers on the site, Foxconn did not respond. Earlier when asked about the situation, the company referred to its Wednesday statement and Friday post on WeChat.

The Covid-19 lockdown, corruption crackdown and more have put China’s economy on a potential crash course. WSJ’s Dion Rabouin explains how China’s economic downturn could hurt the US and the rest of the world. Illustration: David Fang

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

The disruption at Foxconn is the latest example of the economic and societal toll of China’s strict pandemic control policies — including swift and sweeping lockdowns, mass testing and mandatory quarantine to squash the virus whenever it appears. Although Beijing says the virus is too powerful to relax its zero-Covid policy, businesses need to convince their employees that there is little risk of coming to work when there are signs of an outbreak.

Zhengzhou’s flare-up – 95 cases have been recorded in the city in the past four days – began in early October, after people returned from other parts of the country from a week-long national holiday. At the first signs of Covid in the city, officials locked down several districts and began rounds of mass testing to wipe out the virus before it gained a foothold among Zhengzhou’s 12.7 million residents. As a major employer, Foxconn joined the campaign.

As more infections surfaced at Foxconn mid-month, the company sought to contain output by creating a “bubble” around its operations to reduce the risk of exposure, a practice now common among major Chinese manufacturers to continue with their business during a local outbreak.

Foxconn says it employs up to 300,000 workers in Zhengzhou. Analysts estimate that the company produces half or more of Apple’s smartphones in the city, making it critical to deliver iPhones to consumers, including for the upcoming winter holiday season when demand for the handsets generally increasing.

Foxconn, in its statement on Wednesday, said production at the site is “reasonably stable” and is sticking to its operating outlook for the current quarter as the impact of the outbreak is under control. Quarterly results are set to be reported on November 10.

Apple, in its quarterly earnings release on Thursday, did not mention the Zhengzhou Foxconn plant. Its chief financial officer said supply for the new iPhone 14 Pro models is constrained by strong demand.

Apple did not respond to requests for comment about conditions at the Foxconn factory.

Several workers interviewed by the Journal said many colleagues refused to go back to the production lines. Others simply left, they said, sometimes abandoning their belongings.

Another Foxconn employee said most of his team of a dozen night-shift workers were taken to a quarantine facility or refused to return to work. Every night, he said, he saw workers clad in protective gear waiting to be taken out on the bus.

“I don’t know who is around me so it’s a positive situation,” said the worker, who has been confined to his dorm for a few days. “I’d rather stay in the dorm.”

With so many stuck inside their quarters, sent to quarantine centers or simply absent from work, the pace of production has slowed at some assembly lines, two of the workers said.

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

Anyone who comes to work will get free meals and a daily bonus, he said. Those who turn up every working day from October 26 to November 11 will receive an award of 1,500 yuan, or about $200.

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

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

One worker’s daughter said her mother was put in the same dorm as several people who tested positive. Several other workers made similar complaints.

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

In photographs he shared with the Journal, people slept on beds and pillows placed on metal bed frames, under white fluorescent lights hanging from the roof like a hangar. Hygiene is now a problem, he said. Still, he said he’s not supposed to leave the plant — and has nowhere to go if he did.

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

Business and the Pandemic

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

Copyright © 2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8


Leave a Reply

Your email address will not be published.

Related Articles

Back to top button