LDN - Business

Apple puts supplier Foxconn's India plant on notice after protests

[December 29, 2021] By Sudarshan Varadhan and Sayantani Ghosh

CHENNAI (Reuters) -Apple said it had placed the southern Indian factory of iPhone assembler Foxconn on probation after both companies found that some worker dormitories and dining rooms did not meet required standards.

Apple did not explain what probation meant.

When it placed the southern India plant of another supplier, Wistron Corp, on probation after unrest last year, it said it would not award that company new business until it addressed the way workers were treated.

The latest action follows protests that erupted this month after more than 250 women who work at the Foxconn plant and live in one of the dormitories were treated for food poisoning. More than 150 were hospitalised, Reuters reported.

The plant, which is located in the town of Sriperumbudur town near Chennai and employs about 17,000 people, was closed on Dec 18. Apple and Foxconn did not say when they expected it to reopen.

A spokesperson for Taiwan's Foxconn said on Wednesday that it was restructuring its local management team, taking immediate steps to improve facilities and added that all employees would continue to be paid while it makes necessary improvements to restart operations.

An Apple spokesperson said on Wednesday it had dispatched independent auditors to assess conditions at the dormitories "following recent concerns about food safety and accommodation conditions at Foxconn Sriperumbudur."

Apple said it had found that some of the dormitory accommodations and dining rooms, which were not on the factory's premises, did not meet its requirements and that it was working with the supplier to ensure a comprehensive set of corrective actions, adding that it will ensure its strict standards are met before the facility reopens.

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Private security guards stand at the entrance of a closed plant of Foxconn India, which makes iPhones for Apple Inc, near Chennai, India, December 22, 2021. REUTERS/Sudarshan Varadhan

A senior government official familiar with the matter said Foxconn has been answering queries from the state government on amenities provided to workers. "Once they get clearances from the government, workers will be inducted and the company will resume production," the official said.

A second official said the reopening of the Foxconn plant in Chennai could be delayed until Monday.

Earlier this week, Reuters reported that Foxconn as well as 11 of its contractors including those who provide food and living facilities, were summoned for a meeting with the state government and that officials had asked Foxconn to review services provided to the workers, including power backup at the hostels, food and water.

The impact on Apple from the closure of the plant, which makes iPhone 12 models and has started trial production of the iPhone 13, is expected to be minimal, analysts have said. But the factory is strategic in the long term as the U.S. tech giant tries to cut its reliance on its Chinese supply chain amid trade tensions between Washington and Beijing.

(Reporting by Sayantani Ghosh, Sudarshan Varadhan in Chennai, Chandini Monappa in Bengaluru, Dawn Chmielewsk in Los Angeles and Stephen Nellis in San Francisco; Editing by Christian Schmollinger, Kenneth Maxwell and Raju Gopalakrishnan)

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