Foxconn offers US$1,400 to new hires to leave Zhengzhou factory

The world’s largest iPhone factory, operated by Foxconn Technology Group in the central Chinese city of Zhengzhou, has promised to pay each newly-hired worker 10,000 yuan (US$1,400) to leave the campus immediately in a desperate move to end protests that have turned violent.

The offer to workers was made on Wednesday and published by Chinese online media outlet Cailianshe, after violent clashes between workers and company security staff that began on Tuesday evening over allowances and strict Covid-19 measures.

Foxconn confirmed that protests, some violent, had occurred at the factory in a statement earlier on Wednesday but did not elaborate further.

According to the company notice, recently-hired workers at the iPhone production unit of Foxconn in Zhengzhou will receive 8,000 yuan if they tender their resignation immediately and will receive another 2,000 upon boarding a bus out of the facility.

“Some employees are still concerned about the coronavirus and hope to quit and return home, and the company deeply understands the concerns,” according to the notice. The 10,000 yuan package covers lost salary, quarantine allowances and miscellaneous items, according to the notice.

According to a video clip circulating online, the contents of which were verified by a Foxconn employee on Wednesday, a man told a group of workers about a compensation offer and asked them to gather at 7:30pm if they wanted to take the money and leave. The man promised to arrange transport to send them home within Henan province, and they will have to undergo quarantine when they arrive in their home cities and towns.

Separately, protests have continued within the world’s largest iPhone factory, according to two former workers who have remained in touch with friends still employed at the plant. The one-off compensation offer only applies to newly-hired staff.

The Taiwanese company, formally known as Hon Hai Precision Industry, did not immediately respond to a request for comment on the compensation offer on Wednesday.

Foxconn said earlier that “some new hires” at the Zhengzhou campus had complained to the company about work allowances. “The allowance has always been honoured based on contractual obligations and [we] will continue to communicate with relevant colleagues [on the issue],” the company said.

Video clips circulating on social media and confirmed to the Post as genuine by former workers, showed a large group of workers on the side of a road hemmed in by a wall of hazmat-suited personnel. Workers were also seen smashing up Covid-19 testing kiosks with steel bars, chairs and fire extinguishers to shouts of “smash it up”.

According to two former workers at the Foxconn plant who asked for anonymity due to the sensitivity of the issue, the terms of a “retention allowance” – promised to new employees who stay at the plant until February 15, 2023 – had been changed. Workers now need to stay until March 15 to receive the bonus – an extra month – leading to anger.

Other grievances include alleged arrangements whereby the company asked some workers to share dormitories with colleagues who had been confirmed as having Covid-19, according to the two workers. Foxconn denied this allegation and said all dormitories had been disinfected before new hires moved in.

The flare-up highlights the dilemma China faces between keeping its zero tolerance of Covid-19 while maintaining normal production. Foxconn has had to maintain rigid Covid controls while maintaining production at peak operating levels.

Foxconn has implemented a closed-loop production mode since last month after a Covid-19 outbreak. Tens of thousands of workers fled the compound due to lockdown and infection fears, which resulted in a shortage of 100,000 staff. This prompted Apple to issue a rare warning earlier this month about delayed shipments of iPhone 14 Pro and 14 Pro Max models.

Henan province mobilised a local grass roots governance system to help Foxconn recruit workers while Foxconn promised additional cash rewards. However, new hires have to go through days of quarantine at designated places and follow strict Covid-19 control regulations before starting work.

The violent clashes have shattered the rosy picture painted by local official media that production has resumed smoothly at the Foxconn plant, which employs over 200,000 workers.

The city of Zhengzhou announced on Wednesday evening that it would impose a five-day de facto lockdown from November 25 to November 29 in the name of “mobility management” with daily universal PCR testing for Covid-19 infection.

Residents in high-risk areas are prohibited from “stepping outside the door” while residents in other areas are prohibited from “stepping outside the door” until they can receive permission to leave home. South China Morning Post