Bottlenecks now threaten iPhone

Employees of Apple supplier Foxconn in eastern China’s metropolis of Zhengzhou climb over fences, leave the factory building with bags and suitcases under their arms, escaping the recent quarantine.

They fear being stuck in a “closed loop”: factories in China are allowed to continue working during the quarantine – but employees are trapped in the company building. That means sleeping, eating and working in the factory. Sometimes under dire conditions. For example, at the Foxconn factory in Zhengzhou, canteens were closed two weeks ago for fear of infection. Since then, workers have had to eat their meals in dormitories.

Expert: Escape is real at Foxconn

After the protests, Foxconn announced that it would reopen canteens, but that’s clearly not enough for employees.

Chinese state media has denied the mass exodus. But his numerous videos are circulating on social media and making headlines around the world. A source from Blick in China confirms: “The escape at Foxconn is definitely happening – but no one knows how many escaped.” The source wants to remain anonymous. Chinese authorities have tightened their grip on civil society in recent months, especially since the party congress. Anyone who publicly expresses their criticism is at risk of retaliation.

30 percent less iPhone

Those familiar with the Chinese economy are not surprised that the iPhone supplier is the source of the mass exodus from Covid. The company has repeatedly made negative headlines over the years for its terrible working conditions. Among other things, there was an accumulation of suicides in the factories.

Foxconn is China’s largest private employer with 800,000 employees at 12 factories. Depending on the resource, 200,000 to 350,000 people work at the Zhengzhou factory alone. Factories are like small towns. The one in Zhengzhou is called the “iPhone City” because it’s where so many smartphones come off the assembly line, especially.

The news agency “Reuters” reported, citing insiders, that iPhone production in Zhengzhou will drop by 30 percent in November due to the lockdown chaos. Christmas sales are in danger!

Reuters says Foxconn is currently increasing capacities at other factories in southern China, such as Shenzhen. However, it seems illusory that Foxconn could make up for the shortcomings. The company manufactures 70 percent of all iPhones worldwide.

Order early for Christmas

Apple is reluctant to comment on any delivery bottlenecks when asked by Blick. Major iPhone sellers in Switzerland are trying to placate. For example, according to Mediamarkt, warehouses are about to explode.

However: Some iPhone models are already out of stock, including the brand new iPhone 14. “If the product is guaranteed to be under the Christmas tree, we recommend ordering a little earlier this year,” says Migros subsidiary Digitec Galaxus. In recent years, there have been repeated bottlenecks in iPhones due to the recession in the global supply chain and closed container ports in China.

Covid code even in the subway

From a European perspective, the recent quarantine chaos looks ridiculous: China has almost 3,000 new Covid cases a day nationwide. Switzerland has 5,000 people with a population 160 times smaller! While more than 200 million people are in quarantine in China, no measures are implemented in this country. All cities are locked.

A Blick informant from Shanghai says: “Sometimes you want to get out of the house in the morning and realize that the house is locked.” Because of Covid, everyone in China needs a Covid code, for example to enter buildings or use the subway. The source, who holds a senior position in the business world, suspects this may be the real reason why the government is sticking to the zero Covid strategy. “The government has found an excellent tool to monitor the population.”

It’s not just the population that suffers, it’s not just the Foxconn employees in jail, it’s the economy as a whole. According to Nomura, Japanese financial analysts, the 200 million people in quarantine are responsible for a quarter of China’s economic output.

“Since the last major lockdown in Shanghai in the spring, many shops on the central shopping street have remained empty,” the long-time resident told Blick. Before the last curfew ends, the next is already at home.