Apple’s woes: Foxconn offers staff USD 1,400 to quit jobs!
Virendra Pandit
New Delhi: After Wednesday’s unprecedented violence showing the shape of things to come, the Foxconn Technology Group has taken an extraordinary step to encourage the employees to leave the world’s largest iPhone factory at Zhengzhou in China: it is offering a ‘severance incentive’ of 10,000 yuan (USD 1,400) to those quitting their jobs!
They aim the unusual decision at appeasing disgruntled new recruits, who played a key role in violent protests, jeopardizing production amid ongoing lockdowns and Zero Covid strictures, the media reported on Thursday.
Foxconn, Apple Inc.’s main global production partner, said in an online notice the amount, to be paid out in two installments, will help smooth the journey home for the leaving employees.
Many of the 200,000-plus workers at Foxconn’s main plant in Zhengzhou hail from elsewhere in the province or different parts of China. Officials suspect that the new recruits, many angry at non-payment of pay, fueled tensions among the ranks.
The company will now replace departing staff though it may take time, a Foxconn spokesperson said.
The incentive, which is more than a month’s wages for the company’s blue-collar staff, may placate some employees who on Wednesday staged a rare violent protest that trained a spotlight on the economic and social toll of President Xi Jinping’s brutally executed Zero Covid strategy.
Hundreds of Foxconn factory workers clashed with security personnel in the early hours of Wednesday as tensions boiled over after almost a month under harsh restrictions intended to quash a fresh Covid outbreak.
A key factor that sparked unrest was the company’s failure to pay the promised higher wages. The staff discovered they wouldn’t receive the promised higher wages unless they stayed at the factory until March 2023. Now, the 10,000 yuan payment would compensate people unhappy with that restriction for their travel back home.
Mounting dissatisfaction among Foxconn’s ranks threatens to further disrupt production at a plant that cranks out most of Apple’s marquee devices for shipment around the world. The US-based company warned it will ship fewer devices than expected during the critical holiday quarter, while wait times for iPhones have ballooned sometimes after Christmas, the media reported.
“We have Apple team members on the ground at our supplier Foxconn’s Zhengzhou facility,” Apple said in a statement. “We are reviewing the situation and working closely with Foxconn to ensure their employees’ concerns are addressed.”
Angry workers streamed out of their dormitories early on Wednesday, jostling and pushing past the few security guards present. Some of them pummeled a person lying on the ground with sticks, while others prodded them to fight on. Throngs of workers forced their way past barricades, surrounded an occupied police car, and began rocking the vehicle while screaming, the media reported.
The workers’ violent protest, unprecedented in China, started over unpaid wages and fears of spreading infection amid a fresh pandemic outbreak. When anti-riot police rushed to restore order, several workers were wounded.
Foxconn said the factory resumed normal operations by Wednesday evening. But the protests underscored how President Xi Jinping’s ongoing Zero Covid policy, which relies on swift lockdowns to stamp out the disease wherever it pops up, is increasingly weighing on the Chinese economy and throwing swathes of the global supply chain into disarray.
Apple is very concerned with this industrial unrest in Communist China, which poses the danger of relying on a single-location, vast production plant. The company is, therefore, weighing ways to decentralize production to create alternative supply chains. With this aim, it is moving away some of its production to other countries, including India.
Even China, already battling a recession, is worried about this downturn. To dilute Covid restrictions, Beijing ordered officials to minimize disruption and use more targeted Covid controls. But repeated outbreaks of infections in major cities forced local authorities to reimpose curbs.
Soon after the Zhengzhou violence, local officials clamped “mobility controls” over parts of the city until November 29. It is an effective lockdown that could hamper efforts to recruit new workers to replace those who leave.
