Apple is in charge of its iPhones, however, it sublets the assembling process to other firms. Foxconn is one of Apple’s largest allies for its iPhones. The Taiwanese multinational electronics company has the world’s largest iPhone factory. This factory is so large that it produces almost half of the new iPhones we see in the market. However, for a few days now, there has been massive unrest at the site of the world’s largest iPhone factory. This factory is in the Chinese city of Zhengzhou. The Taiwanese contract manufacturer, Foxconn, is now offering employees cash gifts. They get these gifts if they leave the factory without any issues. These are rough times in “iPhone City”, as the world’s largest smartphone factory in Zhengzhou is called. Foxconn is now paying a “bare skin” bonus to prevent employee protests, some of which have led to violent clashes with the police and other security forces.
— Hunter (@gexiaohongqq) November 23, 2022
All employees at the giant Foxconn factory will receive 10,000 yuan ($1,397) if they leave the site. According to the US economic service, Bloomberg. This amount is very well more than what a normal employee of the plant earns in a month.
Money should be paid in two instalments – support the journey home
Foxconn wants to use the money to get rid of dissatisfied employees. These employees are those who no longer want to work for the group in iPhone production. The sum, which is to be paid in two instalments, can ensure a safe and successful return journey to the hometowns of the respective employees. The company claims it is ready to support employees as they go back home.
According to Foxconn, the plant (iPhone City) has been working regularly since Wednesday evening after there had been massive protests by hundreds of employees. The initial protest is now degenerating into what we can call “street fights”. In different videos, we can see alleged employees engaging security personnel and the police. There are also videos of employees destroying the properties of the plant. Perhaps, this is the reason why Foxconn is ready to pay them to leave the premises. The reason for the protest is unpaid wages and poor living conditions. Employees can not leave the premises as it runs a “closed loop” system set up due to the COVID-19 restrictions. However, employees, especially new employees claim that the factory is exposing them to the virus.
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Background of the massive protests at iPhone City
Foxconn is the world’s largest contract manufacturer. It is also Apple’s main contract manufacturer. Due to pressure from Apple and COVID-19, it recently hired around 100,000 new employees. This new recruitment comes after thousands had panicked after a coronavirus outbreak among employees in October. Some of the protesters point out that they were recruited by Foxconn under false promises. For this reason, there has been a breakdown of law and order at the factor.
The Chinese government placed stringent COVID-19 restrictions. Due to the strict restrictions, Foxconn had to stop workers from leaving the factory environment. However, the conditions of living in the factory are not decent. Employees claim that they can no longer eat their meals in the dining room. They have to eat in their dorms which is not conducive to living talk more about eating. Due to this situation, several employees started sneaking out of the premises.
Foxconn workers riot – no solution in sight
For some days now, the riot at “iPhone City” has been ongoing. However, it appears that the authorities have so solution. There are many videos on Twitter showing the street fights at Foxconn Zhengzhou. The new employees seem to be more aggrieved than older employees. According to the new staff, Foxconn did not separate them from old employees. This means that the company is exposing them to COVID. These new workers believe that some of these old staff may have COVID-19.
Foxconn had to attract most of the new recruits with a very lucrative deal. However, it appears that the company has no intention of keeping this deal. The workers now feel angry and some are panicking. This situation is affecting the iPhone 14 series production. According to Apple, a shortage of workers will affect the iPhone 14 series production. The iPhone 14 Pro and iPhone 14 Pro Max models will be more affected. Apple is wary considering that this is the holiday season. There is usually a boom in popular iPhone sales during the holiday season.
Possible alternatives for iPhone production
One thing that is certain is that Apple will like to move iPhone production out of China. Foxconn is one of China’s largest employers as well as tax payer. Thus, China does not want Foxconn to lose Apple. However, Apple will have to shift some of its iPhones outside China. Looking at the current issue, things are not looking so good for Apple. In fact, the media can not exclude Apple from what is going on at Foxconn. There are a couple of countries where Apple may feel safer. Vietnam and Mexico are already very good options for Apple. India also feels like a good place for Apple to shift some of its production. Nevertheless, irrespective of where Apple goes, it will need to establish a supply chain. This supply chain must be able to deliver components that are up to Apple’s standards. Foxconn Zhengzhou is responsible for about 50% of the world’s iPhone units for sale. Thus, a riot in such a factory could cause an iPhone shortage.