TAIPEI/SHANGHAI, Nov 24 (Reuters) – Foxconn ( 2317.TW ) said on Thursday that a “technical error” related to payroll had occurred when hiring new employees at a COVID-19-hit iPhone factory in China and its apologized to workers after the company was rocked. of fresh labor unrest.
Men smashed surveillance cameras and clashed with security staff as hundreds of workers protested at the world’s largest iPhone factory in the city of Zhengzhou on Wednesday, in rare scenes of open dissent in China sparked by claims regarding payment delay and frustration due to severe restrictions related to COVID-19.
Workers said in videos posted on social media that they had been informed that supplier Apple Inc ( AAPL.O ) planned to delay bonus payments. Some workers also complained that they were forced to share dormitories with colleagues who tested positive for COVID.
“Our team looked into the matter and discovered a technical error occurred during the onboarding process,” Foxconn said in a statement, referring to the hiring of new workers.
“We apologize for an input error in the computer system and guarantee that the actual payment is the same as agreed and with the official recruitment posters.” He did not elaborate on the error.
The apology was a turnaround from a day earlier, when Foxconn said it had met its payment contracts.
The unrest comes at a time when China is seeing a record number of COVID-19 infections and facing mounting roadblocks that have fueled frustration among citizens across the country. But it also revealed communication problems and a distrust of Foxconn management among some staff members.
The largest protests have stopped and the company is communicating with employees involved in smaller protests, a Foxconn source familiar with the matter told Reuters on Thursday.
The person said the company had reached “initial agreements” with employees to resolve the dispute and production at the plant was continuing.
Growing worker discontent over COVID outbreaks, strict quarantine rules and food shortages have caused many employees to flee the factory’s closed campus since October after management implemented a so-called closed-loop system that isolated the factory by the whole world.
Many of the new recruits had been hired to replace workers who had fled – estimated by some former employees to number in the thousands.
The Taiwanese company said it would respect the wishes of new recruits who want to resign and leave the factory campus and provide them with “care allowances”. The Foxconn source said the subsidies amount to 10,000 yuan ($1,400) per worker.
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Home to more than 200,000 workers, the Foxconn factory in Zhengzhou has dormitories, restaurants, basketball courts and a soccer field on its sprawling site of about 1.4 million square meters.
The factory makes Apple devices, including the iPhone 14 Pro and Pro Max, and accounts for 70 percent of iPhone shipments globally.
Apple said it has staff at the factory and is “working closely with Foxconn to ensure the concerns of their employees are addressed.”
Several shareholder activists told Reuters the protests showed the risks Apple faces from its reliance on Chinese manufacturing.
“Apple’s extreme reliance on China, both as a (consumer) market and as a primary manufacturing location, we see as a very risky situation,” said Christina O’Connell, senior manager for SumOfUs, a nonprofit accountability group. corporate. .
Reuters reported last month that iPhone production at the Zhengzhou factory could drop by as much as 30 percent in November and that Foxconn aims to resume full production there by the second half of the month.
The Foxconn source familiar with the matter said it was not immediately clear how much the workers’ protests might affect production in November and that it could take several days to resolve that, citing the factory’s large size.
A separate source said the unrest made it certain they would not be able to resume full production until the end of the month.
Apple has warned that it expects lower shipments of premium iPhone 14 models than previously anticipated.
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Reporting by Yimou Lee in Taipei and Brenda Goh in Shanghai; Additional reporting by Ross Kerber in Boston, Beijing Newsroom and Yew Lun Tian; Edited by Anne Marie Roantree, Stephen Coates and Edwina Gibbs
Our Standards: The Thomson Reuters Trust Principles.