Top Apple iPhone maker Foxconn restarts key China plant with 10% of workers -source (updated)
10/02/2020 02:27
* Key plant in northern China approved to resume work -
source
* Under 10% of workforce had returned to Zhengzhou plant -
source
* Request to restart factory in Shenzhen rejected - source
* Foxconn says working with authorities for nationwide
resumption
(Adds January revenue in last second paragraph)
By Yimou Lee
TAIPEI, Feb 10 (Reuters) - Apple's biggest iPhone maker
Foxconn 2317.TW got approval to resume production at a key
plant in China after being forced to shut it following the
coronavirus outbreak, but only 10% of the factory's workforce
has managed to return so far, a source told Reuters.
Taiwan's Foxconn, the world's largest contract electronics
maker, got the green light to restart production in the eastern
central Chinese city of Zhengzhou, said the person with direct
knowledge of the matter. The company, however, has not yet been
allowed to restart production in Shenzhen, a southern
manufacturing hub, the source said.
The two factories together make up the bulk of Foxconn's
assembly lines for Apple's AAPL.O iPhones, and the delays are
likely to impact global shipments. urn:newsml:reuters.com:*:nL8N2A42ES
Market research firm Trendforce on Monday cut its
March-quarter forecast for iPhone production by about 10% to 41
million handsets. urn:newsml:reuters.com:*:nL4N2AA2FI
Apple itself gave a wider-than-usual revenue outlook range
for the March quarter last month to factor in uncertainty due to
the virus that has claimed more than 900 lives and infected over
40,000 people. urn:newsml:reuters.com:*:nL1N29X1VG
An Apple spokeswoman in Shanghai was not immediately
available for comment.
Apple rival and China's biggest smartphone maker, Huawei
HWT.UL , said last week it had resumed production of consumer
devices and carrier equipment, and operations were running
normally. urn:newsml:reuters.com:*:nL4N2A311Q
About 16,000 people, or under 10% of Foxconn's workforce in
Zhengzhou have returned to the plant, the source said, adding
that company executives were trying very hard to negotiate with
authorities to resume production in other parts of China,
including Kunshan, in southeastern Jiangsu province.
"Our request to resume production (in Shenzhen) was
disapproved. We need to improve our virus control measures for
another check," said the person who declined to be identified
because they are not authorised to speak publicly on the matter.
Shenzhen authorities will conduct checks at the plant again
later this week, the person said.
Employees in Shenzhen were told not to return to work on
Tuesday, according to an internal memo seen by Reuters.
The coronavirus outbreak - declared a global health
emergency by the World Health Organization - has disrupted
Chinese manufacturing and forced companies such as Hyundai Motor
005380.KS to halt production of cars in some factories.
urn:newsml:reuters.com:*:nL4N2A4269
Some companies including Samsung Electronics 005930.KS
limped back to work on Monday but hundreds of factories and
stores remain shut across China. urn:newsml:reuters.com:*:nL4N2AA01K
Foxconn, formally Hon Hai Precision Industry Co Ltd, said in
a statement that employee safety was top priority and that it
was working with authorities to meet requirements to resume
production across China "in a staggered and orderly manner".
Foxconn employees who returned to work on Monday following
an extended Lunar New Year holiday have been told to wear masks,
undergo temperature checks and adhere to a specified dining
system, according to internal memos seen 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 electronics firms,
has 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 by late February,
the memos showed.
The company reported an 11.96% drop in its January revenue
from a year ago to T$364.6 billion ($12.12 billion), according
to a Foxconn filing to the Taiwan stock exchange. It did not
give further details.
Foxconn shares fell as much as 2.4% in Monday trade, lagging
a 0.3% decline in the broader market .TWII . They have fallen
more than 11% since the market reopened following the Lunar New
Year break.
($1 = 30.0890 Taiwan dollars)
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
EXCLUSIVE-Outbreak to hit iPhone output if China extends Foxconn
factory halt -source urn:newsml:reuters.com:*:nL8N2A42ES
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Yimou Lee and Taipei newsroom; Additional
reporting by Brenda Goh in Shanghai; Writing by Ben Blanchard;
Editing by Sayantani Ghosh/Jacqueline Wong/Susan Fenton)
((ben.blanchard@thomsonreuters.com;))