Inside a Chinese iPhone Plant, Foxconn Grapples With Covid Chaos

HONG KONG — Foxconn Technology 2354 -0.76%

The group is struggling to contain a weeks-long Covid-19 outbreak at an iPhone factory in central China, and trying to compensate frightened and frustrated workers during a crucial period for smartphone orders.

At Foxconn’s main Zhengzhou facility, the world’s largest assembly site for Apple Inc.’s

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iPhones, hundreds of thousands of workers were put under a closed loop system for almost two weeks. They are largely shut off from the outside world, allowed to move only between their dormitories or houses and the production lines.

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Many said that they have been closed in their quarters for days and that the distribution of food and other essentials was chaotic. Many others say they are too afraid to continue working because of the risk of becoming infected.

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Foxconn on Wednesday denied what it said were online rumors that 20,000 cases had been found at the site and said that for “a small number of employees affected by the pandemic,” it is providing necessary supplies.

“A sudden outbreak disrupts our normal life,” Foxconn said Friday in a post to its workers on WeChat,

social media platform. “Orderly progress in both pandemic prevention and production depends on the efforts of all staff,” he said. He outlined plans to ensure adequate food supplies and support for mental well-being and promised to respond to workers’ concerns.

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Asked about the workers’ details of the situation at the site, Foxconn did not respond. Earlier when asked about the situation, the company referred to its Wednesday statement as well as its Friday post on WeChat.

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“It’s too dangerous to go to work,” a 21-year-old worker who was confined to his dorm told The Wall Street Journal, saying he was skeptical of the company’s claim that there was a low level of infections. in the plant. .

The disruption at Foxconn is the latest example of the economic and societal toll from China’s rigid policies on pandemic control — which include rapid and sweeping lockdowns, mass testing and mandatory quarantines to crack down the virus whenever it appears. While Beijing says the virus is too strong to allow any relaxation of its zero-Covid policy, businesses must convince their employees that there is little risk of coming to work when there are signs of an outbreak.

The Zhengzhou flare-up—95 cases recorded in the city in the past four days—began in early October, after people returned from other parts of the country from a week-long national holiday. At the first signs of Covid in the city, officials locked down some districts and began rounds of mass testing to root out the virus before it gained a foothold among Zhengzhou’s 12.7 million residents. As a major employer, Foxconn joined the campaign.

When more infections emerged at Foxconn mid-month, the company sought to maintain production by creating a “bubble” around its operations to reduce the risk of exposure, a practice now common among major manufacturers. in China to continue their business during a local outbreak.

Foxconn says it employs as many as 300,000 workers in Zhengzhou. Analysts estimate that the company produces half or more of Apple’s smartphones in the city, making it vital to getting iPhones to consumers, including for the upcoming winter holiday season when d -demand for handsets typically increases.

Foxconn, in its statement on Wednesday, said that production at the site is “relatively stable” and that it is sticking to its operating outlook for the current quarter as the impact from the outbreak is controllable. It is expected to report quarterly results on 10 November.

Apple, in its quarterly earnings release Thursday, did not mention Foxconn’s Zhengzhou plant. Its chief financial officer said supply is restricted for the new iPhone 14 Pro models due to strong demand.

Apple did not respond to requests for comment on conditions at the Foxconn plant.

Some workers interviewed by the Journal said that many colleagues had refused to go back to the production lines. Others had simply left, they said, sometimes abandoning their belongings.

On Sunday, a state-run newspaper in Henan published official announcements from various parts of the province welcoming their people to return, with quarantine protocols in place.

Over the weekend, geotagged videos near the Foxconn site went viral on China’s social media platforms, recording groups of people walking along highways or through farm fields carrying luggage and backpacks. Other footage showed makeshift stations set up by local residents offering bottles of water in front of handwritten signs in support of Foxconn migrant workers leaving for home.

Earlier on Friday, the company had published a video on WeChat encouraging people to return to work. “The company needs people,” said a woman’s voice over footage of workers getting off a bus. “If nobody comes to work, how can you run the company?”

Another Foxconn employee said most of his team of a dozen night workers were either taken to a quarantine facility or refused to return to work. Every night, he said, he saw workers clad in protective gear waiting to be taken away by bus.

“I don’t know who around me is a positive case,” said the worker, who has been confined to his dorm for a few days. “I’d be better off staying in the dorm.”

With so many stuck inside their quarters, sent to quarantine centers or simply absent from work, the pace of production in some assembly lines has slowed, two of the workers said.

Foxconn has created incentives to maintain production, according to the company’s announcement Friday.

Everyone who turns up for work will get free meals and a daily bonus, he said. Those who turn up every working day from October 26 to November 11 will get a prize of 1,500 yuan, or about $200.

The 21-year-old employee who spoke to the Journal and who worked on an assembly line making a version of the older iPhone, said he had been locked in his quarters since October 17, along with thousands of others.

In the following days, meal deliveries were delayed and garbage was left alone in the corridors, collected on the ground floor as more dormitories were locked, he said.

The daughter of one worker said her mother was put in the same dorm as some who tested positive. Some other workers made similar complaints.

About 10 days ago, nearly 300 employees from Foxconn’s suppliers were asked to leave their dormitories and sleep in the factory, one of them said.

In photos he shared with the Journal, people sleep on bedding and pillows placed on metal bed frames, under white fluorescent lights suspended from the hangar-like ceiling. Hygiene has become a problem, he said. Still, he said he wasn’t supposed to leave the plant—and has nowhere to go if he did.

“Where can I go? Obstacles are everywhere,” he said. “There are people manning every checkpoint.”

Business and the Pandemic

Write to Wenxin Fan at [email protected] and Selina Cheng at [email protected]

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