Behind Foxconn’s China woes: mistrust, miscommunication, COVID curbs - Yahoo Finance

By Yew Lun Tian, Yimou Lee and Brenda Goh

SHANGHAI (Reuters) - When officials from his Chinese colony approached Hou past month, urging him to enactment astatine the world's largest iPhone mill for astatine slightest doubly the accustomed pay, helium knew it was risky.

Tens of thousands of workers had fled the works successful cardinal China successful erstwhile weeks and convulsive protests had erupted implicit a COVID-19 lockdown and disorder implicit hiring bonuses.

But Hou, 24, who asked to beryllium identified lone by his household name, told Reuters helium took the occupation astatine the Zhengzhou works belonging to Foxconn, Apple's biggest iPhone maker, making 70% of iPhones globally.

The situation could chopped accumulation for November astatine the mill by astatine slightest 30%, a Foxconn root told Reuters connected Thursday, a improvement that has deed Apple's stock price.

The works owned by Taiwan-based Foxconn, battered by China's strict COVID restrictions and facing captious year-end vacation demand, was offering enticing hiring bonuses and fantabulous pay.

Hou said helium was promised up to 30,000 yuan ($4,200) for conscionable nether 4 months' enactment - acold supra the 12,000-16,000 yuan Foxconn workers usually get for 4 months.

But helium said helium had not bargained connected a 10-day spell successful quarantine and the abrupt notification that employees would person to enactment an other period earlier receiving their hiring bonuses.

Such grievances, Hou and 2 different workers told Reuters, prompted them to face Foxconn absorption astatine the works - fundamentally a metropolis of much than 200,000 employees - starring to sporadic clashes that made headlines worldwide.

In a uncommon illustration of large-scale labour unrest successful China, Foxconn workers successful COVID masks clashed with information unit successful achromatic hazmat suits holding integrative shields. Some demonstrators smashed surveillance cameras and windows with sticks.

In summation to the challenges of keeping mill lines operating nether a closed-loop strategy mandated nether Beijing's zero-COVID argumentation - requiring workers beryllium isolated from the wider satellite - Foxconn's turmoil besides exposed connection problems and a mistrust among workers of absorption astatine the apical Apple supplier.

"Nothing they said counted for anything," Hou said from his hometown aft taking a 10,000-yuan payout Foxconn offered connected Thursday to protesting workers who agreed to leave.

Hou, who had worked successful jobs specified arsenic income and says helium was told nary mill acquisition was necessary, ne'er made it to the accumulation line.

'MY LIFE WAS WORTH MORE'

Five different workers said astatine the clip that they were acrophobic due to the fact that Foxconn began shifting COVID-positive radical to a vacant lodging task without disclosing the infections and told workers to devour successful their dormitories alternatively of institution canteens, but past failed to segregate infected workers from others.

Foxconn declined to remark connected the claims by Hou and different workers, referring Reuters to past statements.

The institution antecedently apologised to workers for a pay-related "technical error" that it said occurred erstwhile it was hiring. It has not said wherefore it was paying radical to permission soon aft promising them hiring bonuses.

In precocious October, aft scenes of fleeing workers started trickling out, Foxconn said it was bringing the concern nether power and was coordinating with different plants to summation production.

If the problems persist done December, it volition outgo Foxconn and Apple the output of astir 10 cardinal iPhones, adjacent to cutting iPhone shipments 12% successful the 4th quarter, said KGI Securities expert Christine Wang.

Foxconn managers said the institution was caught successful a hard position, having to velocity up shipments during Apple's astir important vacation play portion pursuing section government's strict COVID guidelines.

"It was the busiest clip of the year," said a elder Foxconn official, adding that an October COVID outbreak connected the Zhengzhou field caught the institution disconnected defender and triggered "a mess".

"There was unit for everyone, including for the section government," the authoritative said, referring to section authorities rushing to assistance enlistee replacement workers.

What happened astatine the works was the "epitome" of what companies look nether China's rigid COVID policy, and it volition "push accumulation lines retired of China astatine a greater speed", the authoritative said.

Marina Zhang, an subordinate prof astatine the University of Technology Sydney's Australia-China Relations Institute, said Foxconn's woes sent a connection to companies trying to support Chinese operations going and support workers COVID-free successful enactment with nationalist policy.

"A company’s interior communications tin beryllium wholly overpowered, overwhelmed by societal media," Zhang said. "They suffer powerfulness to societal media – nary 1 is going to perceive to them."

One worker, Fay, said helium feared catching COVID and anguished whether to enactment connected for 2 much weeks to assertion a bonus for completing his three-month contract. Eventually, helium says, helium crawled retired done a spread successful a greenish metallic fence.

"In the end, I decided that my beingness was worthy more."

(Reporting by Yew Lun Tian successful Singapore, Yimou Lee successful Taipei and Brenda Goh successful Shanghai; Editing by Anne Marie Roantree and William Mallard)