Sunday, May 22, 2022

Apple supplier Foxconn’s India plant shut this week after protests, as per sources, Is Apple going to face huge trouble in 2022?

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CHENNAI (Reuters) – Three government sources told Reuters on Tuesday that Apple supplier Foxconn’s (2317.TW) facility near Chennai in southern India will remain closed this week as a result of protests caused by a food poisoning incident.

On Tuesday, the Foxconn’s plant appeared vacant, with only a few cars, including a police car, parked outside. There were no workers at the facility, which was guarded by two guards and a few additional security personnel.

Apple, like other consumer goods companies, is battling with supply chain constraints that are affecting output. The company warned in October that the impact of these supply chain issues would exacerbate throughout the holiday season.

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“The factory has been closed since Saturday and will remain closed until next Sunday,” said a senior official from Tamil Nadu’s department of industrial safety and health. The factory’s activities have been halted, according to two more senior state officials.

Because none of them were authorised to communicate with the media, they declined to be identified.

Following a food poisoning episode at the company last week that resulted in 150 employees being hospitalised, police in India released scores of them held for blocking a critical roadway on Monday.

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Models of the iPhone 12 are manufactured at this facility. Apple has recently begun trial production of its flagship iPhone 13 at the factory, according to local media on Tuesday, citing sources.

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A police officer from the Superintendent of Police’s office in Kancheepuram, Tamil Nadu, told Reuters that the decision to shut down the factory was made by the management.

Foxconn’s Employees at the facility who have complained of food poisoning or other issues in recent months have been instructed to file complaints with the state labour ministry, according to the officer.

FOXCONN’S IMPACT OF PRODUCTION

“Because it’s a lean period… till at least February,” said Navkendar Singh, India research director at market research firm IDC.

“We expect sales to increase in the first half of 2022 as a result of new product launches and much-needed supply chain improvements.”

Aside from Amazon Fire TV sticks, the plant also produces Xiaomi (1810.HK) gadgets.

The Foxconn’s strike is the second in a year involving an Apple supplier factory in India.

Thousands of contract workers at a facility controlled by Wistron Corp (3231.TW) vandalised equipment and vehicles in December 2020 over alleged wage non-payment, causing $60 million in damages.

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Since beginning iPhone production in India in 2017, Apple, based in Cupertino, California, has placed a large bet on India.

Foxconn, Wistron, and another supplier, Pegatron (4938.TW), have pledged a total of $900 million to manufacture iPhones in India over the next five years.

Apple is also considering to move the assembly of its iPad tablets to India, which is becoming increasingly significant to contract manufacturers supplying American brands as they aim to minimise their reliance on China amid rising Sino-US tensions, alongside Mexico and Vietnam.

In India, women make up the vast majority of Foxconn’s workforce.

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