Workers leave world’s biggest iPhone plant to escape China’s Covid curbs

Workers are departing Apple Inc.’s biggest iPhone plant in China, seeking to escape hastily enacted Covid measures that left many of the 200,000 staff grappling with inadequate living conditions.

Local authorities from several regions in the central Henan province said they will receive home-going workers from Foxconn Technology Group after strict Covid curbs were imposed at the world’s largest iPhone plant in Zhengzhou to quell an outbreak, according to official posts online.

At least six counties and cities in Henan asked residents who just left Foxconn to contact local authorities before going home. Workers will be sent to several days of mandatory isolation, according to official posts on WeChat.

Cities such as Mengzhou and Luoyang have arranged buses to ferry workers to isolation sites, according to the posts. The government of Dagang county has dispatched buses and officials to help ferry employees to quarantine sites for a seven-day compulsory isolation before allowing them to go home, it said in a WeChat post.

Videos and pictures of employees leaving the campus flooded social media over the weekend, depicting local residents offering food and shelter to some of the departing staff. Bloomberg hasn’t verified the authenticity of the content.

Tensions at the Zhengzhou plant underscore the economic and social costs of Xi Jinping’s Covid Zero policy, a rigorously policed system of mass testing and quarantine lockdowns that has fostered growing resentment. It also shows the potential risk to global supply chains and products from China’s approach, which demands lockdowns, business restrictions and mass testing drives when even one Covid case emerges.

Food Scarcity
Discontent has been brewing among staff at Foxconn’s main factory in Zhengzhou, where the emergence of Covid cases saw it go into a closed loop system. Food became a source of unrest after the Taiwanese company that makes most iPhones sold around the world shut cafeterias at the manufacturing site known as “iPhone City.”

At one point, only workers on production lines were given meal boxes, with those infected or afraid to leave their company-provided dormitories given more basic fare like bread and instant noodles, Bloomberg News reported.

It’s unclear how many workers were allowed to leave Foxconn. The company hires many temporary workers from nearby regions to assemble electronics including Apple Inc.’s latest iPhone 14 devices. Foxconn and Apple didn’t immediately provide a comment outside of regular business hours. Foxconn said on Wednesday that production hadn’t been impacted by what it described as a “small” outbreak.

China’s zero-tolerance approach to the pandemic has idled factories and up-ended supply chains. Closed loops enable companies to stay operational during lockdowns but take a toll on workers, whose movements are severely limited, with some even required to sleep on factory floors. Tesla Inc. used a closed loop to resume output during Shanghai’s restive lockdown earlier this year.

In May, hundreds of workers clashed with security personnel at Quanta Computer Inc.’s factory in Shanghai after they were barred for months from contact with the outside world.

Foxconn Fallout
Now, the fallout is being felt by the nation’s single biggest private sector employer, one often hailed as an example of China’s manufacturing prowess.

The discontent comes at a crucial time for Apple, which launched the iPhone 14 during an unprecedented slump in global electronics demand. While faring better than other smartphone makers, it’s backed off plans to increase production of its new iPhones this year after an anticipated surge in demand failed to materialize, Bloomberg has reported. Apple reported better-than-expected results Thursday but warned of a holiday slowdown.

Any disruption at Zhengzhou threatens to snarl Apple’s finely orchestrated supply chain. Thousands of components from Europe to Asia are shipped into Zhengzhou, assembled manually into devices, then shuttled off to the rest of the world.

Over the past few days, photos and video clips flooded social media sites such as Douyin and Weibo, purportedly taken by Foxconn workers dissatisfied with conditions in the plant. One widely shared clip zeroed in on trash piled up outside dorm rooms, while another showed people jostling for food in an apartment complex, where workers were alleged to have been sent for quarantine.

Others posted pleas for help. Messages sent to users sharing these videos on Douyin went unanswered, and Bloomberg hasn’t been able to verify the authenticity of these particular clips.

Foxconn said Wednesday it was assisting a “small number of employees affected by Covid” in its Zhengzhou facility. The firm, known also as Hon Hai Precision Industry Co., is providing the workers with necessities and counseling and called employees its top priority.