Inside a Chinese iPhone Plant, Foxconn Grapples With Covid Chaos

Hong Kong- Foxconn Technology 2354 -0.76%

The group has been trying to contain the spread of Covid-19 at an iPhone factory in central China for weeks to calm scared and frustrated workers during a crucial period for smartphone orders.

Foxconn’s main Zhengzhou facility is the world’s largest assembly site for Apple Inc. of

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iPhones, hundreds of thousands of workers were kept in a closed-loop system for nearly two weeks. They are largely closed off from the outside world, allowed to move only between their dormitories or homes and the production lines.

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Many complained that they were confined to their residences for many days and the distribution of food and other essentials was chaotic. Many said they were too scared to continue working because of the risk of contracting the disease.

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Foxconn on Wednesday denied online rumors that 20,000 cases had been found on the site and said it was providing essential supplies to “a small number of employees affected by the outbreak.”

“The sudden outbreak has disrupted our normal lives,” Foxconn said in a post to its workers on WeChat on Friday.,

A social-media platform. “Regular progress in both epidemic prevention and output depends on the efforts of all staff,” it said. It outlined plans to ensure adequate food supplies and psychological well-being support, and pledged to respond to workers’ concerns.

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Foxconn did not respond when asked for details about the workers’ situation at the site. When asked about the situation earlier, the company referred to Wednesday’s announcement 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 confined to his dorm room told The Wall Street Journal, adding that he was skeptical of the company’s claim that infections were low at the plant. .

The disruption at Foxconn is the latest example of the economic and social toll from China’s tough pandemic control policies—which include rapid and widespread lockdowns, mass testing and mandatory quarantines to suppress the virus whenever it appears. While Beijing says the virus is too powerful to allow it to relax its zero-covid policy, businesses must convince their employees that it is low risk to work when there are signs of an outbreak.

Zhengzhou’s outbreak—with 95 cases reported in the city in the past four days—began in early October, after people returned from a weeklong national holiday from other parts of the country. At the first signs of Covid in the city, authorities locked down some districts and launched several rounds of mass testing to contain the virus before it took hold among Zhengzhou’s 12.7 million residents. As a major employer, Foxconn joined the campaign.

As Foxconn reported more infections at midmonth, the company sought to maintain output by creating a “bubble” around its operations to reduce the risk of exposure, as it is now common for major manufacturers in China to continue their business during local outbreaks.

Foxconn said it employs 300,000 workers in Zhengzhou. Analysts estimate that the company produces half or more of Apple’s smartphones in the city, which is important for delivering iPhones to consumers, with demand for the handsets expected to generally pick up during the upcoming winter holiday season.

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

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

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

Some workers interviewed by the Journal said many colleagues refused to return to the production lines. Others simply left, sometimes leaving their belongings behind.

Another Foxconn employee said many of his dozen-strong team of night-shift workers were taken to a detention facility or refused to return to work. Every night, he said, he saw workers covered in protective gear waiting to be taken by bus.

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

Production on some assembly lines has slowed, two workers said, with many stuck in their quarters, sent to quarantine centers or absent from work.

Foxconn has created incentives to maintain production, according to a company notice on Friday.

Anyone who rotates for work will get free meals and a daily bonus, it said. Those who turn up every weekday from October 26 to November 11 will receive a prize of 1,500 yuan, or about $200.

The 21-year-old employee who spoke to the Journal and worked on the assembly line that makes the older version of the iPhone said he has been confined to his quarters since Oct. 17, along with thousands of others.

In the days that followed, he said, meal deliveries were delayed and trash was left unattended in the hallways, piling up on the ground floor as more dormitories were locked.

A worker’s daughter said her mother was kept in the same dormitory as some of the others who tested positive. Other workers have made similar complaints.

About 10 days ago, about 300 employees from Foxconn suppliers were asked to move out of their dormitories and sleep in the factory, one of them said.

In photos he shared with the Journal, people slept on mattresses and pillows placed on metal bed frames, under white fluorescent lights suspended from a hangar-like ceiling. He said that cleanliness has become a problem. However, he says he doesn’t need to leave the plant and won’t go anywhere if he does.

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

Business and Pandemics

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

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