Inside a Chinese iPhone Plant, Foxconn Grapples With Covid Chaos

HONG KONG – Foxconn Technology 2354 -0.76%

The group is trying to contain a weeks-long outbreak of Covid-19 at an iPhone factory in central China as it tries to calm scared and disgruntled workers during a crucial period for smartphone orders.

At Foxconn’s main factory in Zhengzhou, the world’s largest Apple assembly site Inc

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

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Many said they had been confined to their quarters for days and that the distribution of food and other essential goods had been chaotic. Many others say they are too scared to continue because of the risk of infection.

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

“The sudden outbreak disrupted our normal life,” Foxconn told its employees on WeChat on Friday.,

social media platform. “Orderly progress in both pandemic prevention and outcome depends on the efforts of all workers,” it said. It outlined plans to ensure an adequate food supply and mental wellbeing support, and promised to respond to staff concerns.

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When asked about the workers’ information about the situation at the facility, Foxconn did not respond. Asked about the situation earlier, the company referred to its Wednesday announcement as well as Friday’s post on WeChat.

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

The disruption at Foxconn is the latest example of the economic and societal toll of China’s strict pandemic control policies, which include rapid and comprehensive lockdowns, mass testing and mandatory quarantines to kill the virus whenever it emerges. Although Beijing says the virus is too strong to ease its zero-Covid policy, companies must reassure their workers that there is little risk of them coming to work if there are signs of an outbreak.

The outbreak in Zhengzhou – 95 cases 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 public holiday. After the first signs of Covid in the city, officials closed down some districts and began a round of mass testing to eradicate 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 in the middle of the month, the company scrambled to maintain production by creating a “bubble” around its operations to reduce the risk of exposure, which is now common for China’s biggest manufacturers to continue their business amid a domestic outbreak.

Foxconn says it employs as many as 300,000 workers in Zhengzhou. Analysts estimate that the company makes half or more of Apple’s smartphones in the city, making it critical to getting iPhones to consumers, including during the upcoming winter holiday season, when demand for the phones typically peaks.

Foxconn said in a statement Wednesday that production at the facility is “relatively stable” and that it is sticking to its operating outlook for the current quarter as the impact of the outbreak is under control. Quarterly results are scheduled to be reported on November 10.

Apple did not mention Foxconn’s Zhengzhou factory in its quarterly earnings release on Thursday. Its chief financial officer said supply of the new iPhone 14 Pro models is limited due to high demand.

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

Some employees interviewed by the magazine said many colleagues had refused to return to the production lines. They said others had simply left, sometimes leaving their belongings behind.

Another Foxconn employee said most of his dozen-strong team of night shift workers had either been quarantined or refused to return to work. He said that every night he saw workers covered in protective gear waiting to be taken away by bus.

“I don’t know who is a positive case around me,” said the worker, who has been confined to his dormitory for a few days. “I’d be better off staying in the dorm.”

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

Foxconn has created incentives to maintain production, according to a company statement Friday.

Anyone who comes to work will receive free meals and a daily allowance, it said. Those who come every weekday from October 26 to November 11 will receive a prize of 1,500 yuan, or about $200.

The 21-year-old employee, who spoke to the magazine and worked on an assembly line to make an older version of the iPhone, said he had been holed up in his premises along with thousands of others since October 17.

In the days that followed, meal deliveries were delayed and trash was left unattended in the hallways, piling up on the first floor as more dormitories closed, he said.

A worker’s daughter said her mother was put in the same dormitory as some who tested positive. Some other employees made similar complaints.

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

In photos he shared with the magazine, people slept on bedding and pillows placed on metal bed frames, under white fluorescent lights suspended from the hangar-like roof. He said hygiene has become an issue. However, he said he shouldn’t have left the factory and had nowhere to go if he did.

“Where can I go? Barriers are everywhere,” he said. “There are people manning each checkpoint.”

Business and the pandemic

To type Wenxin Fane, email address [email protected], and Selina Cheng, email address [email protected]

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