News that the Foxconn factory near the city of Chennai in Southern India has closed means that iPhone production in the country will be negatively impacted. The plant churns out iPhone 12 models and factory workers have suffered through a bout with food poisoning which will leave the assembly lines shut down for the remainder of the week. With 150 employees in the hospital, the healthy workers started to protest the incident which also disrupted production.
A senior official at the directorate of industrial safety and health in Tamil Nadu (which calls Chennai it’s capital) said, “The factory has been shut since Saturday and will be shut till coming Sunday.” Confirming the shutdown, two more senior state officials reiterated that the plant is not running.
Protesters were arrested after blocking an important highway following the food poisoning incident. Yesterday, those arrested were released. While the factory, as we noted, currently produces the iPhone 12, Apple has been testing iPhone 13 assembly at the facility, and with the factory closed, that testing has been stopped.
The decision to close the plant was made by Foxconn according to a police officer from the office of the Superintendent of Police in Kancheepuram. This police officer also said that employees at the factory who have been complaining for months about food poisoning and other issues should lodge their complaints with the state labor ministry.
According to Navkendar Singh, India research director at market research firm IDC, “The impact on Apple is expected to below as it is a lean period … until at least February. In (the first half of 2022) we expect sales to pick up from new product launches and much-needed easing of supply chain issues.” Besides the iPhone, the factory also manufactures the Amazon Fire Stick and some devices for Xiaomi.
This is the second incident in India over the last year that saw worker unrest at a factory that builds Apple products. Last December, a Wistron factory hosted a riot when 2,000 workers complained that they did receive their wages, and the incident caused $60 million in damages.
India is the second-largest smartphone market in the world after China and the three contract manufacturers building the device for Apple, Foxconn, Wistron, and Pegatron, have budgeted $900 million over five years to make iPhone units in the country. But because India is a developing market, Apple has focused its Indian production of the iPhone on less expensive older models.
Apple also plans on building some iPad tablets in India as the country, along with Mexico and Vietnam, have become alternative supply chain centers for Apple as the company seeks to lessen its reliance on factories in China. Apple is afraid that with tensions between the U.S. and China so high, getting access to factories based on the mainland won’t always be a sure thing.Those employees working on the assembly lines usually pay some of their wages for room and board in facilities found near the factory. The riot last year started when Wistron promised an engineering graduate Rs 21,000 ($285) per month, but instead, he was paid Rs 16,000 ($217) the first month which was reduced to Rs 12,000 ($163) over the last three months.
Considering that Foxconn workers, like the ones toiling for Wistron, are paying their employer for food, the fact that many of them contracted food poisoning was enough of an issue to spark the protests that shut down the highway near the factory, and the factory itself.
Apple had to get involved in last year’s riot because of the damage to the equipment at Wistron’s factory. This year, it appears that Foxconn was able to keep its production facilities intact.