Foxconn offers employees $1,400 to leave after city iPhone violence

Foxconn offers employees $1,400 to leave after city iPhone violence

Foxconn has begun offering $1,400 to any worker who chooses to leave, an unusual decision intended to placate disaffected new hires who played a key role in violent protests at the iPhone factory.

Foxconn Technology Group has begun offering 10,000 yuan ($1,400) to any worker who chooses to leave, an unusual decision aimed at placating disgruntled new hires who played a key role in the violent protests that rocked the world’s largest iPhone factory.

A major global production partner of Apple Inc. In an online notice the amount, which will be paid in two instalments, will help facilitate the employees’ journey home. Many of the more than 200,000 workers at Foxconn’s main factory in Zhengzhou come from elsewhere in the province or country. But the intent was also to bring in new recruits whom the local government had helped recruit, many of whom inflamed tensions between the ranks. The company will replace departing employees, although this may take some time.

The payment, which generally exceeds a month’s wages for blue-collar Foxconn employees, is likely to satisfy some employees who on Wednesday staged a rare violent protest that highlighted the economic and social toll of Xi Jinping’s Covid Zero strategy. Hundreds of workers clashed with security personnel in the early hours as tensions festered after nearly a month under strict restrictions aimed at stemming the Covid outbreak.

One factor behind the unrest was that the workers discovered that they would only get the higher wages they had been promised if they stayed at the factory until March. The payment of 10,000 yuan will compensate people who are not satisfied with this limitation for their travel back home. The computer glitch also did not help. Foxconn apologized on Thursday for an “entry error” that may have made it appear as if some employees were paid less than promised, adding that it would stick to contractual obligations.

Growing discontent among Foxconn’s ranks threatens to further disrupt production at a factory that ships the majority of Apple’s flagship devices worldwide. The US company has already warned that it will ship fewer devices than expected during the critical holiday quarter, while wait times for iPhones have ballooned in some cases beyond Christmas.

“We have Apple team members on the ground at the Zhengzhou facility of our supplier Foxconn,” the US company said in a statement. “We are reviewing the situation and working closely with Foxconn to ensure that its employees’ concerns are addressed.”

Workers pour out of their dormitories in the wee hours of Wednesday, jostling and shoving past the white-clad guards who are vastly outnumbered. Several people in white clothes beat a person lying on the ground with sticks in another clip. The spectators shouted “Fight, Kill!” As crowds of people made their way through the barricades. At one point, several of them surrounded an occupied police car and started rocking it while screaming incoherently.

The protest began overnight over non-payment of wages and fears of infection. A number of workers were injured and riot police arrived at the scene to restore order.

Foxconn said in a statement that the factory had resumed normal operations by Wednesday evening. But the protests underscored how Xi’s policy, which relies on rapid lockdowns to stamp out disease wherever it appears, is increasingly squeezing the economy and throwing pieces of the global supply chain into disarray.

The Foxconn situation provides yet another reminder of the dangers to Apple of relying on a China-centric mass production machine at a time of unpredictable politics and uncertain trade relations.

Beijing recently issued new directives asking officials to reduce disruption and use more targeted Covid controls, but outbreaks in major cities have forced local authorities to reach for severe restrictions again.

Hours after the Zhengzhou violence, the local government announced “movement controls” on parts of the city until November 29 – an effective lockdown that could hamper efforts to hire new workers to replace those who leave.

“Media reports indicate that the protests were not outside production facilities,” Morgan Stanley analysts wrote. Hence, we expect production operations to continue. The company maintains the goal of full operation in Zhengzhou Park by the end of November.”

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