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Foxconn Offers Workers $1,400 To Leave China iPhone City After Mass Chaos

Foxconn Offers Workers $1,400 To Leave China iPhone City After Mass Chaos

Apple's manufacturing partner Foxconn Technology Group has begun distributing 10,000 yuan ($1,400) to newly recruited workers to leave the world's largest iPhone factory in central China to quell the unrest, reported Bloomberg

Late Wednesday, Foxconn proposed the payout plan to new hires, pleading with workers to return to their dormitories after days of chaos erupted at the factory in Zhengzhou. By Thursday morning, the move appeared to work as clashes with security guards seemed to have diminished. 

A message obtained by CNN and Financial Times advised workers to "please return to your dormitories," and in return, they would receive 8,000 yuan if they agreed to leave Foxconn. Then another 2,000 yuan would be distributed to workers once they boarded the busses home. 

Bloomberg noted one of the significant factors behind the unrest, which began on Tuesday, was that newly recruited workers were highly disappointed with false promises about higher wages. Then Foxconn 'apologized' for a "computer glitch" Thursday that led to an "input error" for some staff to get paid less. The Apple supplier said it would honor contractual obligations. 

"Foxconn promised big money — up to Rmb15,000 a month — to quickly recruit thousands of new workers, but it doesn't seem to have materialized. That is why workers were so disappointed.

"The company is known for claiming to provide high wages then breaking their promises," Jenny Chan, a China labor expert at Hong Kong Polytechnic University, told FT. 

Videos went viral of the unrest at the iPhone factory on Wednesday

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— Wall Street Silver (@WallStreetSilv) November 23, 2022

One blue-collar worker told FT, "We're happy" to take the 10,000 yuan deal to leave the plant over pay disputes but also because of Covid concerns

China's strict "zero Covid" policy has already led Apple to warn about delays in iPhone production at the Zhengzhou factory. The latest round of unrest, and the most severe, could worsen the situation. 

"We have Apple team members on the ground at our supplier Foxconn's Zhengzhou facility.

"We are reviewing the situation and working closely with Foxconn to ensure their employees' concerns are addressed," the company said in a statement to Bloomberg. 

Bloomberg's breakdown of Apple's supply chain shows Foxconn (otherwise known as Hon Hai Precision Industry Co., Ltd.) is a top supplier. Any manufacturing disruption in China could leave AT&T, Best Buy, and Verizon stores without iPhones.  

Analysts estimate about 60% of all iPhones are produced at the Zhengzhou plant, which employs 200,000 workers. Apple has been shifting some production to India. There's still no official statement on how large the disruption will be. 

Tyler Durden
Thu, 11/24/2022 - 09:15