Apple supplier Foxconn apologizes for blunder at COVID-hit Chinese factory

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TAIPEI – Apple’s main supplier Foxconn said on Thursday a “technical error” had occurred while hiring new hires at its COVID-hit iPhone factory in China and apologized to workers after the company was rocked by fresh labor unrest.

Hundreds of workers protested at the world’s largest iPhone factory in Zhengzhou on Wednesday, men broke surveillance cameras and clashed with police in scenes of open discontent that erupted over claims of overdue pay and frustration over China’s strict COVID-19 restrictions.

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Workers said in videos posted on social media that they were told Foxconn intended to delay bonus payments. Some workers also complained about having to share dormitories with colleagues who tested positive for COVID.

“Our team investigated the matter and found that a technical error occurred during boarding,” Foxconn said, referring to the hiring of new employees.

“We apologize for the input error in the computer system and guarantee that the actual payment is the same as the agreed and official recruitment posters.”

A Foxconn source familiar with the matter told Reuters that the largest protests had ended on Thursday and that the company had contacted workers involved in smaller protests.

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The company has reached “preliminary agreements” with workers to resolve the dispute, and production at the plant resumed Thursday, the person said.

The Taiwanese company said it would respect the wishes of new hires who want to resign and leave the factory campus and offer them “care subsidies”.

In videos posted online on Wednesday, some workers complained that they were not sure if they would get food while in quarantine at the sprawling industrial town in central Henan province.

“Foxconn never treats people like people,” one person said.

On Wednesday, China reported 31,444 new local daily COVID cases, up from the previous peak of 29,317 on April 13.

STOCKS ARE FALLING

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Foxconn shares were down 0.5% on Thursday morning, versus a 0.5% gain in the broader market.

The Zhengzhou plant employs more than 200,000 workers to produce Apple Inc. devices, including the iPhone 14 Pro and Pro Max.

Apple said it has staff at the factory and is “working closely with Foxconn to ensure the concerns of its employees are addressed.” The plant accounts for 70% of the world’s iPhone supply.

Reuters previously reported that iPhone production at the Zhengzhou factory could fall by 30% in November after labor unrest last month, and that Foxconn plans to resume full production there by the second half of the month.

Apple has warned that it expects a lower supply of premium iPhone 14 models than previously expected. Wedbush Securities analyst Daniel Ives expects the shutdowns to cost Apple $1 billion a week in lost iPhone sales.

The factory has been rocked by worker unrest and discontent since October, largely due to poor conditions including strict quarantine rules, repeated COVID outbreaks and food shortages.

Some workers have fled the campus rather than submit to Foxconn’s closed-loop system, which requires workers to live and work on site and isolate themselves from the outside world. (Reporting by Yimou Lee; Editing by Stephen Coates)

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