Foxconn Zhengzhou woos fleeing workers with US$70 subsidy after Covid-induced exodus hits iPhone capacity

Foxconn called the subsidy a ‘pre-hiring’ offer as workers would not be able to return until the seven-day lockdown was lifted on Wednesday
Fears of catching the virus as well as concerns over food quality in the compound led to an exodus of Foxconn workers a week ago

Foxconn

Coco Fengin Beijing

Published: 1:30pm, 7 Nov, 2022

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Foxconn Technology Group's Zhengzhou operation is offering workers who fled the compound over coronavirus fears a one-off 500 yuan (US$70) subsidy if they agree to return to work, as the world’s largest iPhone factory tries to minimise the fallout from a Covid-19 lockdown imposed by local authorities.

A notice posted on Monday by the Foxconn unit responsible for iPhone production said the “care and love” subsidy was a “pre-hiring” offer, as workers would not be able to return to the compound until the seven-day lockdown imposed by local authorities was lifted on Wednesday this week.

Workers who fled the compound from October 10 to November 5 have been told to register at local labour agencies if they are willing to return, and that Foxconn will organise transport to get them back into the compound in a “point to point, closed-loop manner” once the lockdown in the Zhengzhou Airport Economic Zone, where the Taiwanese firm's iPhone factory is located, is lifted.

Apple warns of iPhone delays due to Covid chaos at Foxconn’s Zhengzhou factory

The notice was published after Apple issued a statement on Sunday saying that the facility in Zhengzhou, capital of central Henan province, was “operating at significantly reduced capacity”, resulting in lower-than-anticipated shipments and longer delivery times for iPhone 14 Pro and iPhone 14 Pro Max models.

Foxconn, formally known as Hon Hai Precision Industry, said on Monday it would “revise down” its outlook for the fourth quarter “due to the pandemic affecting some of [its] operations in Zhengzhou”, without providing further details. The latest statement marked a shift in tone from its earlier one 10 days ago saying that production was relatively stable.

Since mid-October, Foxconn's Zhengzhou factory, which employs nearly 300,000 workers, has been operating under a closed-loop production system amid a local outbreak of Covid-19 in the city. The company has closed dining halls in the compound and asked workers to have meals in their dormitories. Canteens reopened last week but with limited seating.

Fears of catching the virus – partly stoked by a long-standing official narrative about the dangers of Covid-19 – as well as concerns over food quality in the compound, led to an exodus of Foxconn workers more than a week ago, with social media showing videos of workers climbing over fences and walking across fields with luggage.

Foxconn responded by quadrupling its daily bonus for workers who stayed to 400 yuan. The provincial Zhengzhou government also enhanced its support for the closed-loop production mode at Foxconn, which is the single biggest employer and exporter for the local economy, with measures such as increased testing and disinfection operations.

Apple supplier Foxconn boosts cash incentives for iPhone workers in Zhengzhou

There is no official estimate of how many workers have left Foxconn. According to the notice on Monday, Foxconn is also looking for part-time workers, offering an hourly rate of 30 yuan – the standard pay for peak production season at the factory – until February 15, 2023.

Foxconn has a tradition of wooing former workers with additional cash and raising part-time rates during peak seasons. For example, a recruitment notice posted in August 2022 offered people with previous working experience at Foxconn a 600 yuan subsidy per month if they came back and worked for more than nine months.

A woman undergoes a Covid PCR test in Shanghai, China, November 3, 2022. Photo: EPA-EFE

Workers who spoke to the Post last Friday complained about the lack of disinfection and cleaning at dormitories. Some chose to sleep on factory floors, next to the assembly lines, rather than return to dormitories, over fears of catching the virus from colleagues who tested positive, the Post reported last week.

Neither Foxconn nor the local government has reported the number of confirmed cases in the factory.

Health authorities in Henan province on Sunday reported 42 confirmed Covid-19 cases, with 41 being in Zhengzhou. Among the 264 asymptomatic cases, 256 were from the city.