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

    Chinese authorities are recruiting workers from villages and sending them to Foxconn’s iPhone assembly line after the Apple partner had to leave a factory in central China last month during the Covid-19 outbreak.

    Problems at Foxconn’s Zhengzhou factory caused by Beijing’s strict Covid-free regime have forced Apple to cut estimates for this month’s high-end iPhone 14 shipments in a rare warning to manufacturers investors ahead of the peak holiday sales season.

    Now, the local government in Henan province, where the factory is located, is trying to restore iPhone production lines, with Chinese officials working to help Foxconn maintain production.

    Businesses in China are grappling with disruptions caused by the coronavirus outbreak as Beijing eases some coronavirus restrictions to revive a slowing economy while trying to bring the virus under control .

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

    “We sent 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 local Tangyin government helped quarantine the workers for three days in a hotel before sending them straight to the Foxconn factory, where they would quarantine for another three days before starting work.

    Workers left the Foxconn factory late last month during the Covid outbreak. They say the factory is in turmoil as Foxconn tries to stamp out Covid cases with tough tactics while maintaining production. Some employees climbed over fences and walked hundreds of kilometers home to escape the factory.

    Since then, the Apple partner has increased wages, added huge bonuses of up to Rmb 7,600 ($1,000) and split the factory into two separate bubbles to divide workers and try to keep Covid cases at at low level.

    The Henan government tasked officials across the province with recruiting new assembly line workers.

    “People are definitely worried,” said an official in Yichuan district, west of the factory, which brought the first batch of 80 workers to Foxconn on Thursday. “We are trying to make sure that Covid is brought under control there, otherwise we might have to find a way to bring our workers back” if the situation worsens, he said.

    Analysts at Morgan Stanley on Monday lowered their iPhone shipment estimate by 6 million units to 79 million units for the fourth quarter, noting that “iPhone supply resumes at… [the Zhengzhou factory] key”.

    A village official in the Baofeng district south of the factory said they have been tasked with recruiting at least seven workers from their village to send to the factory.

    “This is the first time I have received such a specific and mandatory administrative order. In the past, it was merely an incentive for locals to go out to the village to work,” the person said, noting that videos circulating on social media of runaway laborers work in the village. Filling the quota becomes difficult.

    Henan’s local state-run media this week stepped in to change the narrative, publishing videos and articles showing new workers happily applying to a clean and tidy campus .

    “We hope they will feel like part of our family when they come to Yuhong [dorm],” said a worker wearing a hazmat suit 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 “we are working with the government to get production back to normal in the shortest time possible”.

    With additional reporting by Nian Liu in Beijing

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