Taiwan’s Foxconn Gets OK To Restart Plant In Zhengzhou, China

Taiwan’s Foxconn has received approval to resume production at a plant in the northern Chinese city of Zhengzhou that had been shuttered due to a coronavirus outbreak, a person with direct knowledge of the matter told Reuters on Monday.

About 16,000 people, or under 10% of Foxconn’s workforce in Zhengzhou, have returned to the plant, the person said, adding that company executives were “trying very hard” to negotiate with authorities to resume production in other parts of China.

The development comes as the coronavirus outbreak – declared a global health emergency by the World Health Organization – threatens to disrupt Chinese manufacturing and force policymakers to ready measures to stabilise the economy.

At Foxconn, the delayed resumption of operations could impact the global technology supply chain and shipments to customers including Apple Inc, a source with direct knowledge of the matter previously told Reuters.

The contract manufacturer is in talks to resume production at key plants including in Shenzhen and Kunshan, said the person on Monday, who was not authorised to speak publicly on the matter and so declined to be identified.

Foxconn, formally Hon Hai Precision Industry Co Ltd, in a statement said employee safety is a “top priority” and that it is working with authorities to meet requirements to resume production across China “in a staggered and orderly manner.”

Tens of thousands of Foxconn employees have returned to work following an extended Lunar New Year holiday. They have been told to wear masks, undergo temperature checks and adhere to a specified dining system, showed internal memos reviewed by Reuters.

Most senior Taiwanese officials have been told to refrain from returning to China and those who needed to do so required approval from Chairman Liu Young-Way, the person said.

Foxconn, which makes devices for global vendors, built its own production lines in the southern province of Guangdong to make masks for its hundreds of thousands of employees, targeting two million masks a day when at full capacity by late February, the memos showed.

Shares of Foxconn fell as much as 2.4% in Monday trade, lagging a 0.3% decline in the broader market .TWII. They have fallen more than 12% since the market reopened following the Lunar New Year break.―Reuters