iPhone Maker Lifts Wages, Preps Backup for Covid-Hit China Plant
Foxconn Technology Group is preparing to bring backup production online and raise hourly wages by more than a third, after an exodus of workers threatened to disrupt output at the world's largest iPhone plant ahead of the holidays.
Foxconn, whose listed vehicle is Hon Hai Precision Industry Co., is grappling with mounting concern that a Covid flare-up at its main Zhengzhou plant could hurt production just as Apple Inc. gears up for the crucial year-end season. Its shares fell 1.4% Monday, the worst decline in three weeks.
Social media erupted over the weekend with photos and videos of workers departing the Zhengzhou plant, some on foot, to return to hometowns miles away. They were seeking to escape hastily enacted Covid-prevention measures that have left many of the 200,000 staff grappling with inadequate living conditions. Other videos depicted local residents offering food and shelter to some of the departing staff. Bloomberg hasn't verified the authenticity of the social media content.
To keep plants running at fill speed, Foxconn is raising hourly pay by as much as 36% to roughly 38 yuan ($5.20) an hour for key positions, compared with the early days of iPhone 14 production around September, people familiar with the matter said, asking not to be identified because the move isn't public.
On the operations side, Foxconn has said it may boost capacity at alternative sites. The Taiwanese company also makes iPhones at a factory in Shenzhen, which together with Zhengzhou cranks out the majority of the world's iPhones. Representatives for the company declined to comment on wage plans.
“Further developments will be important as 4Q is the peak season for iPhone shipments,” Morgan Stanley analysts wrote. “The potential
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