Inside a Chinese iPhone Plant, Foxconn Grapples With Covid Chaos

Hong Kong – Foxconn Technologies 2354 -0.76%

The group has been trying to contain a week-long Covid-19 outbreak at an iPhone factory in central China, trying to calm scared and frustrated workers during a crucial period for smartphone orders.

At Foxconn’s main Zhengzhou facility, the world’s largest assembly site for Apple Inc.’s

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

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Many said they have been confined to their quarters for days and distribution of food and other essentials has been chaotic. Many others said they were too afraid to work because of the risk of being infected.

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

“The sudden disaster has disrupted our normal lives,” Foxconn said in a post to its workers on WeChat on Friday.,

A social media platform. “Systematic progress in both epidemic prevention and output depends on the efforts of all employees,” it said. It outlined plans to ensure adequate food supplies and mental health support and promised to respond to workers’ concerns.

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Foxconn did not respond when asked about details of the workers’ conditions at the site. Asked about the situation earlier, the company referred to Wednesday’s statement 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 his dormitory told The Wall Street Journal, adding that he was skeptical of the company’s claims of low-level infections at the plant. .

The shutdown at Foxconn is the latest example of the economic and social toll from China’s draconian epidemic control policies — which include rapid and widespread lockdowns, mass testing and mandatory quarantines when it emerges to crush the virus. With Beijing saying the virus is too powerful to ease its zero-covid policy, businesses must convince their employees there is little risk of coming to work when there are signs of an outbreak.

Zhengzhou’s outbreak – with 95 cases recorded in the city in the past four days – began in early October, after people returned from a week-long national holiday from other parts of the country. At the first signs of Covid in the city, authorities locked down some districts and began a round of mass testing to stamp out the virus before it took hold among Zhengzhou’s 12.7 million residents. As a major employer, Foxconn joined the campaign.

When Foxconn saw more infections in mid-month, the company sought to maintain production by creating a “bubble” around its operations to reduce the risk of exposure, a practice now common among China’s major manufacturers to continue their business during localized outbreaks.

Foxconn says it employs 300,000 workers in Zhengzhou. Analysts estimate that the company manufactures half or more of Apple’s smartphones in the city, making it crucial to deliver iPhones to consumers in the coming winter holiday season when demand for the handsets typically peaks.

Foxconn said in its statement on Wednesday that production at the site is “relatively stable” and that it is sticking to its operating outlook for the current quarter as the impact from the outbreak is manageable. It is set to report quarterly results on November 10.

Apple did not mention Foxconn’s Zhengzhou plant in Thursday’s quarterly earnings call. Its chief financial officer said supply constraints were due to strong demand for the new iPhone 14 Pro models.

Apple did not respond to a request for comment about conditions at the Foxconn plant.

Some workers interviewed by the Journal said many colleagues had refused to return to the production lines. Others simply left, they said, sometimes abandoning their belongings.

Another Foxconn employee said his dozen-strong team of night-shift workers was either taken to a quarantine facility or refused to return to work. Every night, he said, he saw workers covered in protective gear waiting to be taken by bus.

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

Many are stuck inside their quarters, sent to quarantine centers or absent from work, slowing production on some assembly lines, two workers said.

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

Anyone who turns up for work will get free food and a daily bonus, 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 Journal and works on the assembly line that makes older iPhone versions, said he had been confined to his quarters since Oct. 17, along with thousands of others.

In the days that followed, food shipments were delayed and garbage was left unattended in the hallways, piling up on the ground floor as more dormitories were closed, he said.

A worker’s daughter said her mother was housed in the same dormitory as some who tested positive. Other workers have also made similar complaints.

About 10 days ago, about 300 employees of Foxconn suppliers were told to move out of their dormitories and sleep in the factory, one of them said.

In the photos he shared with the Journal, people lie in beds and pillows propped up on metal bed frames, beneath white fluorescent lights suspended from a hangar-like ceiling. He said that there is a problem with sanitation. Still, he said he shouldn’t leave the plant — and if he did, he’d have nowhere to go.

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

Trade and Epidemics

Write in Wenxin Fan

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