Inside a Chinese iPhone Plant, Foxconn Grapples With Covid Chaos

HONG KONG— Foxconn Technology 2354 -0.76%

Group is trying to contain a weeks-long Covid-19 outbreak at an iPhone factory in central China, trying to appease scared and frustrated workers during a crucial period for smartphone orders.

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

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

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Many said they were confined to their rooms 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 being infected.

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

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

a social media platform. “An orderly progress in both pandemic prevention and output depends on the efforts of all personnel,” it said. It outlined plans to ensure proper food supplies and support for mental well-being and pledged to respond to workers’ concerns.

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When asked about the workers’ details of the situation at the site, Foxconn did not respond. When asked about the situation earlier, 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 confined to his residence told The Wall Street Journal, skeptical of the company’s claim that there is a low level of infections at the plant is. .

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

Zhengzhou’s outbreak – 95 cases recorded in the city in the past four days – began in early October, after people from other parts of the country returned from a one-week national holiday. At the first signs of Covid in the city, officials locked down some districts and began rounds of mass testing to eradicate 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 surfaced against Foxconn in mid-month, the company tried to maintain output by creating a “bubble” around its operations to lower the risk of exposure, a practice now common among major manufacturers in China to protect their continue business during a local outbreak.

Foxconn says it employs as many as 300,000 workers in Zhengzhou. Analysts estimate that the company manufactures half or more of Apple’s smartphones in the city, making it essential for delivering iPhones to consumers, including for the upcoming winter holiday season when demand for the phones typically peaks.

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

Apple did not mention Foxconn’s Zhengzhou plant in its quarterly earnings release Thursday. Its CFO said supply is limited 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.

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

Another Foxconn employee said most of his dozen-strong team of night shift workers were either 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 away by bus.

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

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

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

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

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

Over the next few days, meal deliveries were delayed and trash was left unattended in the hallways, piling up on the ground floor as more dormitories were closed, he said.

A daughter of one worker said her mother was placed in the same dormitory as some who tested positive. Some other workers made similar complaints.

About 10 days ago, nearly 300 employees of 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 sheets and pillows on metal bed frames, under white fluorescent lights suspended from the hangar-like roof. Hygiene has become a problem, he said. Still, he said he wasn’t supposed to leave the plant and had nowhere to go if he did.

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

Business and the pandemic

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

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