Inside a Chinese iPhone Plant, Foxconn Grapples With Covid Chaos

HONG KONG—Foxconn Technology 2354 -0.76%

The group has been scrambling to contain a week-long Covid-19 outbreak at an iPhone factory in central China, trying to comfort scared and frustrated workers at a crucial time for the smartphone order.

In the main Zhengzhou facility of Foxconn, the largest assembly area in the world for Apple Inc

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

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Many said they were stuck in their rooms for days and that the distribution of food and other necessities was disrupted. Many said they were afraid to continue working because of the risk of infection.

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

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

a social media platform. “A smooth progress in pandemic prevention and output depends on the efforts of all staff,” it said. It outlined plans to ensure proper food supply and mental health support and promised to respond to workers’ concerns.

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

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

The Foxconn disruption is the latest example of the economic and social toll from China’s strict pandemic control policies — which have included swift and sweeping lockdowns, mass testing and compulsory quarantine to crack down. the virus whenever it appears. While Beijing says the virus is too strong to allow any easing of the zero-Covid policy, businesses need to convince their employees that there is little risk of coming to work if there are signs of a explosion.

The outbreak in Zhengzhou—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 contain the virus before it gained a foothold in Zhengzhou’s 12.7 million residents. . As a major employer, Foxconn joined the campaign.

When more infections emerged at Foxconn in the middle of the month, the company sought to maintain output by creating a “bubble” around its operations to minimize the risk of exposure, a practice now common in major Chinese manufacturers to continue their business during a local outbreak.

Foxconn says it employs up to 300,000 workers in Zhengzhou. Analysts estimate that the company manufactures half or more of Apple’s smartphones in the city, making it crucial for delivering iPhones to consumers, including the upcoming winter holiday season when demand for handsets usually increase.

Foxconn, in its statement on Wednesday, said that production at the site is “relatively stable” and that it maintains its operational outlook for the current quarter as the impact of the epidemic will be controlled. It is set to report quarterly results on November 10.

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

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

Other workers interviewed by the Journal said many colleagues refused to return to the production lines. Some just walked, they said, sometimes leaving their belongings behind.

Another Foxconn employee said most of his dozen-strong team of night-shift workers were taken to a quarantine 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 around me is a positive case,” said the worker, who has been confined to his dorm for several days. “I’d rather stay in the dorm.”

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

Foxconn is creating incentives to keep production going, according to the company’s announcement on Friday.

Anyone who goes to work gets free food and a daily bonus, it said. Those who go every work day from Oct. 26 to Nov. 11 will receive an award of 1,500 yuan, or about $200.

The 21-year-old employee who spoke to the Journal and works on an assembly line that produces an old version of the iPhone, said he has been trapped in his room since October 17, along with thousands of others.

In the days that followed, food deliveries were delayed and trash was left unattended in the hallways, piling up on the ground floor because many dorms were locked, he said.

A daughter of a worker said her mother was placed in the same dorm as some who tested positive. Other workers made similar complaints.

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

In the photos he shared with the Journal, people slept on beds and pillows placed on metal bed frames, under white fluorescent lights suspended from the hangar-like roof. Hygiene has become a problem, he said. Still, he says he doesn’t have to leave the plant—and has nowhere to go if he does.

“Where do 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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