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Apple iPhone supply hit by China factory dispute

Thousands walk off the job after dispute erupts at a Zhengzhou plant over quality demands

PUBLISHED : Tuesday, 09 October, 2012, 12:00am
UPDATED : Tuesday, 09 October, 2012, 3:01am

Foxconn Technology, the assembler of Apple iPhones, had to stop mainland production for the second time in as many weeks after factory-line workers at one of its plants protested against increased pressure.

Foxconn, which employs more than one million workers, has suffered in the past three years from suicides, riots and strikes. To improve working conditions, chairman Terry Gou raised pay and allowed inspections by outside observers.

Employees, who work up to 12 hours a day, say the difficulties of meeting Apple's demands for quality and abuse from guards set off the latest incidents.

One of the company's factories in Zhengzhou lost two shifts last Friday after workers became frustrated trying to prevent scratching on the casings of the iPhone 5, according to industry sources.

A dispute occurred between the production and quality teams at the factory, the company said. Between 3,000 and 4,000 people who walked off the job at the plant, have since returned to work, according to advocacy group China Labour Watch.

"Labour disputes are a fundamental issue unique to Foxconn," Brian Park, a technology analyst at Tong Yang Securities, said. "Foxconn is infamous for high suicide rates, and that means the intensity of labour is that much higher."

Employees were made to work through a holiday week and subject to "overly strict" product quality demands without adequate training, China Labour Watch has said.

The walkout was the result of demands placed by Apple on its manufacturer to improve the quality of the iPhone 5 after customers complained that the handset had scratches, it said.

Apple spokesman Steve Dowling would not comment on the stoppages at Zhengzhou, but Foxconn confirmed incidents occurred on Monday and Tuesday of last week. The firm declined to comment on Friday's events.

"These were isolated incidents and were immediately addressed and measures taken, including providing additional staff for the lines in question," Foxconn said in a statement about the earlier events.

Last month, a brawl involving 2,000 workers at a Foxconn plant in Taiyuan halted production. The fracas left more than 40 in hospital and brought security teams wearing riot helmets and wielding plastic shields into the Taiyuan plant, which employs 79,000 people.

California-based Apple designs its products in the United States and relies on Foxconn to manufacture them. Apple, the world's most valuable company, sold five million iPhone 5 models in its first three days on sale last month. The pressure to deliver is felt by the workers.

"Every job is tagged to time, there are targets on how many things must be completed within an hour," said Xie Xiaogang, 22, who worked at Foxconn's Shenzhen plant and was transferred to Taiyuan in June this year. "You don't have much time to relax. In this environment, many people cannot take it."

That translates into a steady turnover of workers who need to be replaced.

The requirements to be a Foxconn worker were minimal, according to a recruiter lingering outside the Taiyuan facility's gates to coax passers-by and people alighting at the bus stop to sign up for employment. The minimum age requirement is 16, good health and some secondary school education, according to Hao Yaya, a recruiter who has been on the job for a year.

"We're looking for people willing to work," he said. With some workers leaving after a day's experience, turnover rates were high and that necessitated constant recruitment, Hao said.

The firm has improved working conditions of its employees after at least 10 suicides in 2010.

Apple chief executive Tim Cook signed his company into the Washington-based Fair Labour Association in January after the suicides highlighted conditions at the supplier.

In August, the Fair Labour Association reported that Foxconn had cut working hours and improved safety at a faster pace than scheduled. The changes are among 284 made by the Taiwan-based company which had logged more than 50 breaches of mainland regulations.

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