China recruits villagers to restore Foxconn’s iPhone production after staff exodus

Chinese authorities are recruiting workers from villages and busing them to Foxconn’s iPhone assembly lines after the Apple partner suffered a staff exodus from its factory in central China last month during a covid outbreak. -19.

Problems at Foxconn’s Zhengzhou plant caused by Beijing’s strict zero-Covid regime forced Apple to cut estimates for high-end iPhone 14 shipments this month by a rare warning to investors before their peak holiday sales season.

Now local governments in Henan province, where the plant is located, are trying to restock iPhone production lines, with Chinese officials working to help. foxconn maintain production.

Companies in China are dealing with disruptions from covid outbreaks as Beijing eases some of its coronavirus restrictions to revive a slowing economy while trying to keep the virus in check.

Foxconn’s Zhengzhou plant typically employs more than 200,000 workers and was responsible for around 60% of Henan’s exports in 2019, according to the latest available data.

“We have dispatched more than 300 workers in about a week,” said a labor official surnamed Han in Tangyin county, 200 kilometers north of the factory.

Han said the Tangyin local government helped quarantine the workers for three days in a hotel before busing them directly to the Foxconn plant, where they would quarantine for another three days before starting work.

workers fled the foxconn factory late last month during a Covid outbreak. They said the plant was in chaos as Foxconn tried to crack down on Covid cases with tough tactics while maintaining production. Some employees climbed fences and walked hundreds of kilometers home to escape the plant.

The Apple partner has since raised wages, added big bonuses of up to Rmb7,600 ($1,000) and divided the factory into two separate bubbles to divide the worker population and try to keep covid cases low.

The Henan government commissioned officials from across the province to recruit new workers for the assembly line.

“People are definitely nervous,” said an official in Yichuan county west of the plant, which brought its first batch of 80 workers to Foxconn on Thursday. “We are trying to make sure that Covid is under control there, otherwise we may have to figure out how to bring our workers back” if the situation deteriorates, he said.

Morgan Stanley analysts on Monday cut their iPhone shipment estimates by 6 million units to 79 million for the fourth quarter, noting that “the resumption of iPhone supply in [the Zhengzhou factory] is the key.”

An official from the village in Baofeng county, south of the factory, said they had been given the task of recruiting at least seven workers from their village to send to the plant.

“This is the first time I have received such a mandatory and specific administrative order. In the past, it was simply an incentive for local people to work outside of town,” the person said, noting that widespread videos on social media of fleeing workers made it difficult to fill the quota.

Local Henan state media stepped in this week to change the narrative, posting videos and articles showing happy new workers entering a neat and clean campus.

“We hope they feel like part of our family when they come to Yuhong. [dorm]a worker wearing a hazmat suit said in a video produced by Henan’s state-owned Dahe Daily. “This is what we are working hard for.”

Foxconn did not immediately respond to questions about its hiring practices. Last week, Foxconn Chairman Liu Young-way told investors that “we are working with the government to return to normal production in the shortest possible time.”

With additional reporting by Nian Liu in Beijing

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