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China: Apple Supplier Apologizes For Hiring Blunder at COVID-Hit Plant

    China: Apple Supplier Apologizes For Hiring Blunder at COVID-Hit Plant
    Last updated: 6 days ago
    Image credit: Yimou Lee and Brenda Goh REUTERS

    Facts

    • After large-scale protests erupted at Foxconn's iPhone factory in the Chinese city of Zhengzhou on Wednesday, Apple's major supplier apologized to workers on Thursday, saying a "technical error" had occurred when hiring new recruits at the COVID-hit factory. [1]
    • The Zhengzhou plant is the world’s largest iPhone factory, with approximately 200k workers. In mid-October, unconfirmed estimates said around 10% of the workforce had been placed in quarantine on site, and thousands were driven to flee when the company allegedly failed to address complaints about unsafe working conditions. [2]
    • Foxconn has struggled to contain the COVID outbreak among its workforce while maintaining production ahead of the peak holiday season. Videos taken inside the plant have shown stand-offs between armed police and demonstrators. [3]
    • Protests flared as replacement workers accused Foxconn of changing their contracts, and rescinding the higher pay and better benefits promised during recruitment. Foxconn responded that it has always fulfilled allowances based on a contractual obligation. The Zhengzhou factory is under “closed-loop management,” meaning employees live at their workplace and are isolated from the outside world. [4]
    • In a statement on Thursday, Foxconn also said their team had been looking into the matter and discovered a technical error that occurred when the company hired new workers. "We apologize for an input error in the computer system and guarantee that the actual pay is the same as agreed and the official recruitment posters." The company did not elaborate on the issue, and the apology went back on comments made previous day, when Foxconn claimed to have fulfilled all its contractual obligations. [5]
    • According to Chinese state media, Foxconn has recruited as many as 100K people in recent weeks to replace workers that left Zhengzhou. The recent disruptions have increased the demand for manufacturers to diversify their supply chain outside China. Foxconn and other Apple suppliers have already started to shift some production capacity to Vietnam and India. [6]
    • Apple said on Thursday that it was, "working closely with Foxconn to ensure their employees' concerns are addressed.” The problems at the plant have led Apple to cut estimates for high-end iPhone 14 shipments and issue a rare warning to investors over production delays. [1]
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    Spin

    Pro-establishment narrative

    China's “zero Covid” policy has slowed factory output and quickly turned Apple's close ties with the country from an asset into a liability. While Apple is taking steps to try and slowly extract itself, this is difficult given just how entangled its business is with Beijing. The Chinese government must loosen COVID restrictions if Apple is to recover any of its supply shortages and meet demand.

    Establishment-critical narrative

    The Chinese government’s insistence on strict COVID lockdowns should not be used as an excuse by companies like Foxconn and Apple to enact forced labor, and closed-loop management practices are exactly that. Foxconn is choosing to prioritize profit over workers’ health and human rights, and Apple refuses to acknowledge the harms committed under its watch. Western consumers have a responsibility to speak out.

    Nerd narrative

    There's a 50% chance that China will officially cease to be a socialist state by March 7, 2086, according to the Metaculus Prediction Community.

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