China recruits villagers to restore Foxconn iPhone production after exodus of employees

Chinese authorities are recruiting workers from villages and moving them to Foxconn’s iPhone assembly lines after the Apple partner suffered a mass exodus of employees from its central China plant last month during the Covid-19 outbreak.

Problems at the Foxconn factory in Zhengzhou stemming from Beijing’s strict zero Covid regime have forced Apple to cut its high-end iPhone 14 shipment estimates this month within A rare warning for investors Just before the peak holiday sales season.

Now local governments in Henan Province, where the factory is located, are trying to refill iPhone production lines, as Chinese officials are working to help Foxconn Maintain production.

Companies in China are grappling with it Disruptions due to the COVID outbreak Beijing has eased some of its coronavirus restrictions to revive the slowing economy while trying to keep the virus under control.

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

“We’ve sent more than 300 workers in about a week,” said a labor official with the last name Han in Tangin County, 200 kilometers north of the factory.

Han said the Tangjin local government helped workers isolate for three days in a hotel before taking them directly to the Foxconn factory, where they will isolate for another three days before starting work.

Workers He escaped from the Foxconn factory Late last month during the covid outbreak. They said the factory was in shambles as Foxconn tried to eradicate Covid cases with drastic methods while maintaining production. Some employees climbed over fences and walked hundreds of kilometers home to escape the factory.

Since then, the Apple partner has raised wages, added bonuses as big as 7,600 renminbi ($1,000) and split the factory into two separate bubbles to split the number of workers and try to keep Covid cases down.

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

“People are definitely worried,” said an official in the factory’s western county of Lichuan, who bussed the first batch of 80 workers to Foxconn on Thursday. “We’re trying to make sure that Covid is in control there, otherwise we might have to figure out how to get our workers back” if the situation deteriorates, he said.

Analysts at Morgan Stanley on Monday cut their estimate for iPhone shipments by 6 million units to 79 million for the fourth quarter, noting that “iPhone supply resumption in [the Zhengzhou factory] is the key.”

A village official in Baofeng County, south of the factory, said they had been assigned to recruit 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 just an incentive for locals to work outside the village,” he said, noting that the spread of videos on social media of absconding workers made it difficult to fill the quota.

Local state media in Henan this week stepped in to change the narrative, publishing videos and articles showing happy new workers stepping into an orderly, clean campus.

“We hope they feel like part of our family when coming to Yuhong [dorm]said a worker wearing a protective suit in a video produced by Henan’s state-owned Dahe Daily. “This is what we work so hard for.”

Foxconn did not immediately respond to questions about its hiring practices. Last week, Foxconn Chairman Liu Yong-wai told investors, “We are working with the government to return to normal production in the shortest possible time.”

With additional reporting by Nian Liu in Beijing

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