Inside a Chinese iPhone Plant, Foxconn Grapples With Covid Chaos

Hong Kong — Foxconn Technology 2354 -0.76%

Group is scrambling to contain a week-long Covid-19 outbreak at an iPhone factory in central China, trying to calm scared and frustrated workers during a critical period for smartphone orders.

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

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iPhones, hundreds of thousands of workers are placed under a closed-loop system for almost two weeks. They are largely shut off from the outside world, allowed only to move between their dorms or homes and the 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 essentials was chaotic. Many others say they are too afraid to continue working because of the risk of getting infected.

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Foxconn on Wednesday denied what it said were online rumors that 20,000 cases had been detected at the site and said that for “the small number of employees affected by the pandemic,” essential supplies were being provided.

“A sudden outbreak disrupted our normal lives,” Foxon said Friday in a post to his workers on WeChat,

A social media platform. “An orderly progress in pandemic prevention and production depends on the efforts of all staff,” it said. It outlines plans to ensure proper food supplies and mental well-being support and pledged to respond to workers’ concerns.

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Asked about the workers’ details about the situation at the site, Foxon did not respond. Earlier when asked about the situation, the company referred to its Wednesday statement and to its Friday post on WeChat.

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“It’s too dangerous to go to work,” a 21-year-old worker confined to his dorm told the Wall Street Journal, saying he was skeptical of the company’s claim that it was a low Level of infections in the plant. .

The disruption in Foxconn is the latest example of the economic and social toll of China’s strict pandemic control policies — which include swift and sweeping lockdowns, mass testing and mandatory quarantines to crush the virus as it emerges. While Beijing says the virus is too strong to allow any easing of its zero-covid policy, businesses must convince their employees that there is little risk in coming to work when there are signs of an outbreak.

Zhengzhou’s flare-up – 95 cases recorded in the city in the past four days – began in early October, after people returned from other parts of the country from a one-week national holiday. At the first signs of Covid in the city, officials locked down several districts and began rounds of mass testing to eradicate the virus before it gained a foothold among Zhengzhou’s 12.7 million residents. As a major employer, Foxon joined the campaign.

When more infections emerged at Foxconn mid-month, the company sought to halt production by creating a “bubble” around its operations to lower the risk of exposure, a practice now common among major manufacturers in China to continue their business during a local outbreak.

Foxconn says it employs as many as 300,000 workers in Zhengzhou. Analysts estimate that the company produces half or more of Apple’s smartphones in the city, making it vital for delivering iPhones to consumers, including for the upcoming winter holiday season when demand for the handsets typically spikes.

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

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

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

Several workers interviewed by the Journal said that many colleagues refused to go back to the production lines. Others simply left, they said, leaving their possessions behind.

On Sunday, a state-run newspaper in Henan published official notices from various parts of the province welcoming their people back, with quarantine protocols laid out.

Over the weekend, videos geotagged near the Foxon site went viral on China’s social media platforms, recording groups of people walking on highways or through farm fields with suitcases and backpacks. Other footage showed makeshift stations set up by local residents offering bottles of water in front of handwritten signs to support migrant Foxconn workers leaving for home.

Foxon said in a statement Sunday that the situation is coming under control with the help of authorities. The company said it is organizing transportation for workers who want to return home and is coordinating production capacity with its plants elsewhere to minimize disruption. There is no shortage of medical supplies or daily necessities at the facility, it said.

Earlier on Friday, the company posted a video on WeChat urging people to return to work. “This company needs people,” said a woman’s voice over footage of workers getting off a bus. “If nobody comes to work, how can the company run?”

Another Foxconn employee said most of his dozen-strong team of night-shift workers were 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 away by bus.

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

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

Foxconn has created incentives to stop production, according to Friday’s company release.

Anyone turning up for work will get free meals and a daily bonus, it said. Those who turn up every weekday from October 26 to November 11 will receive an award of 1,500 yuan, or about $200.

The 21-year-old employee who spoke to the magazine and who worked on an assembly line that makes an older version of the iPhone, said he had been confined to his quarters since October 17, along with thousands of others.

In the following days, meal delivery was delayed and garbage was left unattended in the hallways, piled up on the ground floor as more dorms were locked down, he said.

A daughter of one worker said her mother was placed in the same dorm as some who tested positive. Several other workers have similar complaints.

About 10 days ago, almost 300 employees of Foxconn suppliers were asked to move out of their dormitories and sleep in 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. Sanitation has become a problem, he said. Still, he said he wasn’t supposed to leave the plant — and had nowhere to go if he did.

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

Business and the pandemic

Write to Wenxin Fan at [email protected] and Selina Cheng at [email protected]

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