Workers fled the manufacturing campus in Zhengzhou, the capital of the central province of Henan, last month because of concerns about Covid, which marked the beginning of the problems. As a result of the staff shortage, bonuses were provided to employees. However, this week there were protests because the freshly hired personnel felt the management had broken their word. The workers were eventually given money to quit and go after tussling with security guards wearing biohazard suits. According to analysts, the difficulties faced by Foxconn, a major Apple supplier and the owner of the factory, will hasten the process of diversification away from China and toward nations like India. The Zhengzhou plant is one of the key ones for Apple. the Potential cost to Apple of this shutdown and turmoil in lost iPhone sales is about $1 billion per week. Now roughly 5% of iPhone 14 sales are likely off the table due to these brutal shutdowns in China. According to CNN Business “Based on our analysis, we believe iPhone 14 Pro shortages have gotten much worse over the last week with very low inventories,” he wrote. “We believe many Apple Stores now have iPhone 14 Pro shortages … of up to 25%-30% below normal heading into a typical December”.
Apple stated earlier this month that Covid limitations in China will “temporarily disrupt” the distribution of its most recent iPhone series. It said that its Zhengzhou assembly plant, which regularly employs about 200,000 people, was “currently working at severely reduced capacity” due to restrictions imposed by Covid.
Since mid-October, the Zhengzhou campus has been dealing with a Covid epidemic that has alarmed its staff. Early in November, videos of individuals fleeing Zhengzhou on foot became widespread on Chinese social media, causing Foxconn to take more aggressive tactics to get its employees back.
This is not the first time there have been protests at Foxconn plants, we have seen such situations in the past. Such protests have happened before, as well as cases of suicide, the first cases of suicides were reported as early as 2011, according to Newsweek: “On Tuesday, another – already the tenth this year – worker committed suicide by throwing himself from a window in Shenzhen in southern China, where the plant, which employs 400,000 people, is located. In addition, there were two suicide attempts.” At the time, apple’s response to these events was to install suicide prevention nets at all plants, as you can see years later working conditions have not improved. Currently, we are hearing from China about the prevailing protests there against the “ZERO COVID” Policy, these are the first protests on such a scale in a long time, and so far, it is unknown what will come of it due to the widespread censorship and control of Chinese society.
Who will be the biggest beneficiary of the current situation, definitely India, which has long been in competition with the Chinese government. In an effort to diversify its supply chain and move away from China, Apple began producing the iPhone 14 in India even before this week’s protests.
The statement, which occurred at a time when US IT giants were looking for alternatives to China, which had served as the world’s factory for decades, signaled a significant shift in the company’s approach. Apple, due to Covid’s strict policy in China, wanted to increase production in countries such as Vietnam and India. He anticipated that Foxconn’s manufacturing of iPhones in India will increase by at least 150% in 2023 compared to 2022 and that the long-term objective would be to export between 40 and 45 percent of such phones from India, up from less than 4 percent at the moment, but even so, in the end, it is Apple and not the employees who will benefit the most.
References:
- https://www.newsweek.pl/foxconn-chinski-sposob-na-powstrzymanie-samobojstw-w-foxconnie/8gp2lq3
- https://edition.cnn.com/2022/11/25/tech/apple-foxconn-iphone-supply-china-covid-intl-hnk/index.html?fbclid=IwAR1F4wTx3an76wLbTDS4DB1o9k1e0n6BKv5JheF3K6uNl1F9upFTzbaPDx8
- https://finanse.wp.pl/kolejne-samobojstwo-w-fabryce-w-chinach-6114638333393025a
- https://www.bbc.com/news/business-63739562
- https://www.bloomberg.com/news/articles/2022-11-24/foxconn-offers-staff-1-400-to-leave-after-iphone-city-violence
After reading your article, the first thing that really got me was how little knowledge we, as customers, possess. We only see the attractive new iPhone in the shop, but hidden behind every iPhone are many hard-working individuals who don’t take any holidays throughout the entire year or even commit suicide. In my opinion, Apple’s answer to putting suicide prevention nets at all factories is the wrong approach because they could simply improve working conditions and prevent suicide that way.