China county rallies retired PLA personnel to work at world’s largest iPhone factory, bolstering its role in Apple’s supply chain

The veteran affairs bureau in Changge on Tuesday posted an open letter urging retired PLA personnel to come work at Foxconn’s facility in Zhengzhou
That call formed part of a provincewide campaign by local authorities in Henan to help recruit fresh assembly line workers for the factory

Foxconn

Coco Fengin Beijing

Published: 4:03pm, 16 Nov 2022

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A Chinese county is rallying retired People’s Liberation Army (PLA) personnel to come work at the world’s largest iPhone factory, operated by Apple supplier Foxconn Technology Group, in the latest sign of how much local authorities are scrambling to restore production at the facility in Zhengzhou, capital of central Henan province.

The veteran affairs bureau in Changge, a county with a population of 710,000 under the administration of the city of Xuchang in Henan, on Tuesday posted an open letter urging retired PLA personnel to “answer the government’s call” and “take part in the resumption of production” at Foxconn’s manufacturing complex in Zhengzhou. The letter suggested that they “show up where there’s a need”.

That call formed part of a provincewide campaign by local authorities in Henan to help recruit fresh assembly line workers for Foxconn’s Zhengzhou compound, where tens of thousands of panicked workers have fled since late October to earlier this month because of a Covid-19 outbreak. The Changge veteran affairs bureau’s open letter was later removed without explanation from its official channel on social media platform WeChat.

Henan authorities have started mobilising its grass-roots governance system to help recruit new workers for the Foxconn facility, the South China Morning Post reported last Friday, after that compound and surrounding areas in Zhengzhou remained under lockdown, which prompted Apple last week to warn of a slowdown in shipments of its popular iPhone 14 Pro and Pro Max models during the holiday shopping season.

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Local authorities have also encouraged cadres in the cities of Kaifeng and Jiyuan in Henan to “form teams” that would work at Foxconn’s Zhengzhou facility for at least a month, according to a report by the Shanghai Securities Journal, a state-owned daily newspaper.

It is important for Henan to help restore normal production “as quickly as possible” at Foxconn’s Zhengzhou complex to help secure its role in Apple’s supply chain and protect the local economy, according to Mei Xinyu, a researcher affiliated with China’s Ministry of Commerce.

Taiwan-based Foxconn, formally known as Hon Hai Precision Industry, is a major local employer, with a workforce of up to 300,000 at its massive manufacturing complex in Zhengzhou. The world’s largest electronics contract manufacturer is also known as one of the city’s biggest taxpayers and exporters.

Zhengzhou, meanwhile, serves as a major hub of China’s national transport network, with railways linking the city to Europe and its international airport.

China sends village cadres to persuade workers to return to iPhone plant

The initiatives taken by authorities in Henan to help stabilise Foxconn’s operations in Zhengzhou will have significant implications to strengthening China’s supply chains, Mei said.

Henan’s extraordinary actions reflect concerns that further disruptions in production could accelerate Apple’s pace of diversifying production outside China.

Foxconn has already added extra iPhone production capacity to an existing factory in India, as part of its push to diversify its supply chain beyond China, according to a report in August by Indian daily newspaper The Economic Times, which cited unnamed sources.

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

The Taiwanese company’s rival electronics contract manufacturers, which are also Apple suppliers, have already started shifting production capacity to Vietnam from China. These include Luxshare Precision Industry, which makes AirPods, and BYD Electronics, which is set to produce iPads.

An initial batch of new assembly line recruits arrived at Foxconn’s Zhengzhou facility last Sunday, according to a report by the government-run Henan Daily. The Beijing News had earlier reported that nearly 20,000 job applicants were accepted by Foxconn by the evening of Saturday.

The new recruits are required to stay at a local quarantine site for three days before being picked up by shuttle bus to start work at Foxconn’s Zhengzhou plant. Each new recruit will receive up to 1,600 yuan (US$227) for the first four days before they work in the assembly lines.

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

Foxconn is also offering a 500 yuan bonus for returning workers and quadrupled the daily attendance bonus to 400 yuan since the start of the month.

Foxconn chairman Liu Young-way said last week that the Zhengzhou facility was “making efforts to resume normal productivity as soon as possible”. The company said it would revise down its outlook for the fourth quarter due to the pandemic’s impact on its Zhengzhou operations.