Violence at China's biggest iPhone plant today increases chance of serious shortages
Early this morning in China, Foxconn workers at the largest iPhone factory in China battled security officials. The factory in Zhengzhou has been the subject of several PhoneArena stories over the last few weeks as China put very restrictive rules into action seeking to stop the spread of COVID in the region. Over the last few weeks, Foxconn prevented assembly line workers from leaving the factory surroundings and also forced workers to consume their meals inside dorm rooms instead of eating in the dining room.
Starting several weeks ago, Foxconn workers started to escape the campus where the factory is situated. Apple admitted that the lack of workers was going to lead to shortages of iPhone 14 Pro and iPhone 14 Pro Max models during the holiday shopping season when the company typically sees strong demand for its most popular devices. Foxconn earlier this month offered bonuses to workers who left between October 10th and November 5th but have decided to return.
Apple would love to move iPhone production out of China
The Chinese government, fearful of reports stating that Apple is looking to move iPhone production out of China (Foxconn's Indian facility will quadruple its headcount over the next two years) took the unusual steps of asking its military veterans and Communist party members to find recruits to work at the factory. Foxconn is one of China's top taxpayers and is also one of the country's largest employers.
1/2 Breaking: Newly recruited #Foxconn workers in #iPhone city in #Zhengzhou, #CCPChina try to break out of Foxconn as they say they are deceived. Foxconn didn't separate them from older employees who could be #COVID positive, and the contracts they were asked to sign are... pic.twitter.com/FqmRfwZMk7
— Jennifer Zeng 曾錚 (@jenniferzeng97) November 22, 2022
Bloomberg is reporting that on Wednesday, over 100 Foxconn workers were seen pushing past outnumbered guards. Several videos were posted to social media sites with one showing workers pushing past barricades as witnesses chanted "fight, fight" in the background. Another video showed a person wearing a white haz-mat suit hitting a man on the ground with a stick.
One witness said that the fight was over unpaid wages and fear that the factory would be the center of an infectious outbreak. Several workers were injured at the facility which is believed to be responsible for 50% of the world's iPhone units for sale. Overall, Foxconn churns out 70% of the iPhone units that Apple has produced each year. Neither Apple nor Foxconn have responded to requests for comments.
Possible landing spots for iPhone production include India, Vietnam, and Mexico
A tweet from Jennifer Zeng, who says she has unique insights into China and the Chinese Communist party, includes video of the disturbance. Zeng also said that Foxconn employees are complaining that they haven't been separated from older workers who could be COVID-positive. They are also upset that the contracts that they have been asked to sign are allegedly different than the ones that Foxconn originally showed them. "New workers are panicked and angry," Zeng writes.
She also posts that Foxconn got 100,000 people to sign up with the promise of high salaries. Considering the chaos in Zhengzhou today, it is possible that Foxconn has walked back those high salary promises. The video posted on her tweet, if legit, oozes with tension and danger. Apple would love to move iPhone production out of China although the Foxconn factory in India is not large enough to make up for all of the iPhone units assembled in China.
Besides India, Apple is reportedly looking to move some production to Vietnam and Mexico. Wherever Apple goes, it will need to cultivate a supply chain that can deliver supplies in the quantity and quality Apple needs. And Apple will also need to find a location with a seasoned workforce.
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