Apple to Address Worker Complaints After Unrest at China iPhone Factory

Apple Inc. is a multinational corporation that designs, manufactures, and markets consumer electronics, computer software, and online services. The company is headquartered in Cupertino, California, and has operations worldwide.

Apple said it is working to resolve worker complaints at its biggest iPhone factory in China, after police were filmed beating protesting employees at the plant this week and employees began an exodus Thursday.

Labor groups have criticized Apple for failing to adequately protect the rights of workers at the vast Zhengzhou site, operated by Foxconn. These groups allege that Apple is not doing enough to ensure that workers are treated fairly and given adequate protections.

The workers at the iPhone 14 plant in Wuhan, China clashed with police on Tuesday over delayed bonus payments and poor working conditions. The plant has been battling an outbreak of Covid-19 for over a month, and the workers are angry about the lack of progress in improving conditions.

Apple has staff at the Zhengzhou site and is working closely with Foxconn to ensure employees' concerns are addressed, the company said in a statement.

Foxconn has blamed an error in its computer system for causing new hires to receive contracts intended for existing workers. The company has said that it will guarantee that recruits are paid what was agreed and in line with official recruitment posters.

Foxconn offered a 10,000 yuan payment, equivalent to $1,400, to newly-recruited workers who wanted to leave their jobs and return home, according to text messages to them from the company’s human resources department.

Many workers took up the offer to leave the plant on Thursday morning, according to several video live-streams from the site. One worker told the Journal that he was among a large crowd of people who waited more than an hour to get a company bus that dropped him and his co-workers at a train station. He added that he had received the first installment of the payment.

The latest worker exodus at Apple's iPhone 14 production plant adds to the company's already-existing pressures. Earlier this week, Apple announced that shipments of its high-end iPhone models would be lower than expected due to disruptions at the plant caused by a recent Covid-19 outbreak.

Zhengzhou's recent Covid outbreaks have caused a staff shortage that could impact global iPhone production capacity by roughly 10%, according to Ming-Chi Kuo, an analyst at TF International Securities who follows Apple's supply chain. Apple's chief financial officer said in October that supply is constrained for the new iPhone 14 Pro models amid strong demand.

Despite the economic slowdown, demand for high-end phones, such as the iPhone 14 Pro and Pro Max models, is more resilient than for lower-end phones. Production disruptions this year linked to China’s Covid policies have prompted Apple to look to boost capacity outside of China, particularly in India and Vietnam, The Wall Street Journal has reported.

Apple has tried to increase iPhone14 production at other sites in China since Zhengzhou’s Covid outbreak. The company has been working with suppliers to increase output at other facilities in the country.

The recent clashes at the Zhengzhou plant mark a new era for Apple, as the company now relies heavily on cheap labor and well-developed component supply chains in China to produce its smartphones and other electronic devices. This has propelled Apple to become one of the world's most valuable public companies. However, Foxconn and other manufacturers have had to keep their operations going under China's strict zero-Covid policies, which involve employees living and working in 'bubbles' to reduce the potential spread of infections.

The outbreak of Covid-19 at a manufacturing site that employs more than 200,000 workers led to the confinement of many workers to empty apartment buildings or their accommodations near the site. This disrupted production at the facility.

As Foxconn tightened its Covid restrictions to keep its assembly lines turning to meet Apple’s production demands, it saw thousands of workers leave in an exodus. The workers feared catching the disease, and amid rumors that infected people were being allowed to work so the company could meet its targets.

Aiden Chow, researcher of labor rights group China Labor Bulletin, said that the revolt by recruits filling in for thousands who fled their jobs at the Zhengzhou plant showed that the smartphone maker had failed to live up to its responsibilities as a global leader at the top of the supply chain when its suppliers violated workers’ human rights.

"I can't believe that the police had to be called in to get people back to work," Mr. Chow said.

The Zhengzhou government has announced that the city will be largely locked down for five days starting Friday. This means that workers at the Foxconn factory will only be able to move between their lodging and the production lines.

Videos circulating on workers’ chat groups and on social media Wednesday showed chaotic scenes as workers took to the streets in several areas within the sprawling manufacturing complex. The protests were triggered after some newly hired workers received contracts showing that bonus payments would be released later than when they were promised during recruitment.The workers were seen shouting and waving their fists in the air, and in some cases, throwing stones and setting fires. The unrest highlights the growing frustration among workers in China’s manufacturing sector, who are under pressure to meet tight deadlines and produce goods for the world’s biggest brands.

Workers who now want to quit the Zhengzhou plant were asked to register using an online form and will receive the exit payment in two installments, before and after they boarded vehicles home arranged by the government, according to a text message from Foxconn. The fee would cover their salaries, transport and quarantine fees, it read.