Apple supplier Foxconn freezes hiring of new workers for world’s largest iPhone factory in Zhengzhou amid citywide lockdown

Foxconn, the world’s largest electronics contract manufacturer, on Wednesday froze its hiring of new assembly line workers in Zhengzhou until further notice
Zhengzhou, which recorded four new Covid-19 cases and 10 new asymptomatic carriers, has imposed a citywide lockdown from Wednesday till next Tuesday

Foxconn

Xinmei Shen

Published: 7:00pm, 4 May, 2022

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The world’s largest iPhone factory, operated by Foxconn Technology Group at its vast manufacturing complex in the central Chinese city of Zhengzhou, has had to suspend recruitment of new workers after the local government imposed a seven-day lockdown as part of Covid-19 control measures.

Zhengzhou, which recorded on Wednesday four new Covid-19 cases and 10 new asymptomatic carriers, is under lockdown from Wednesday till next Tuesday. During this period, employees of government organisations and companies in the city’s main districts will work from home, school lessons will move online, and people will only be allowed to leave and enter Zhengzhou under “necessary” circumstances.

Foxconn, the world’s largest electronics contract manufacturer and Apple’s prime supplier, on Wednesday froze its hiring process of assembly line personnel until further notice, according to updates posted on Chinese social media by a number of worker recruitment agencies in Zhengzhou, capital of central Henan province.

The suspension came on the heels of the Taiwanese company’s plans earlier this week to boost recruitment by offering higher cash bonuses, the agencies said in posts on Tencent Holdings platform WeChat and ByteDance-owned Douyin, the Chinese version of global hit short video app TikTok.

The entrance to Foxconn Technology Group’s vast manufacturing complex in Zhengzhou, capital of central Henan province. Photo: Weibo

Foxconn, formally known as Hon Hai Precision Industry, did not immediately respond to a request for comment on Wednesday.

Under pressure to meet production requirements for Apple’s upcoming iPhone 14 range of models, Foxconn’s Zhengzhou operation earlier this week planned to increase the cash bonus offered to new recruits to 8,500 yuan (US$1,286), up from the previous 6,500 yuan, according to a report on Tuesday by Taiwanese newspaper Economic Daily News.

The move to suspend the hiring of new assembly line workers could complicate the iPhone 14 production schedule of Foxconn, which has run its smartphone and components production in Zhengzhou under a “closed-loop” system that confines employees within its campus.

That system allows workers to move on a “point-to-point” basis between factories and their dormitories, according to posts that Foxconn’s Zhengzhou operation published on its WeChat account.

Foxconn halts production at two plants in eastern city of Kunshan over Covid-19 cases

Foxconn on Wednesday said its Zhengzhou campus “has maintained production unchanged”, according to its statement to Reuters.

The company’s smartphone and components manufacturing operations in Henan’s provincial capital are spread across the Zhengzhou Airport Economy Zone, Zhengzhou Economic and Technological Development Area, and Zhongmou County. These operations, which typically employ more than 300,000 workers, make Zhengzhou responsible for producing most of the world’s iPhones.

Foxconn’s plant inside the Zhengzhou Airport Economy Zone usually produces 60 to 80 per cent of the world’s iPhones, so there could be a big impact to Apple’s supply chain if that site encounters major problems, such as large-scale Covid-19 infections, according to Ivan Lam, a Hong Kong-based senior analyst at research firm Counterpoint.

Areas near major iPhone plant in China under lockdown in Zhengzhou

Based on the company’s latest statement, Lam said the Covid-19 situation in its manufacturing complex in Zhengzhou seems to be under control at the moment. He indicated that Foxconn is “one of the most resilient electronics manufacturers in the world”, and has great support from the local government, which relies on its operations for economic growth.

Still, the main Covid-19-related disruption for Foxconn in Zhengzhou has been in logistics, according to Lam. He said it now takes more time to transport components and materials into the factory because logistics services providers must go through additional procedures, such as testing and disinfection.

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