iPhone factory in India, Wistron apologizes to employees for mishandling wages

In the early morning of December 12, employees of Wistron’s factory in Narsapura Industrial Park (Narsapura) in Karnataka, India caused riots due to labor disputes. The main production equipment and warehouses of the factory were damaged. According to the company, Preliminary assessments have caused a total of about 7 million US dollars (about 45.75 million yuan) in losses.

What impact will this incident have on Apple’s landing and manufacturing in India? In an interview with a reporter from China Business News, Chen Jing, vice president of the Institute of Technology and Strategy, said that Apple still has a big eye on the Indian market and has increased investment in it in recent years.

He said that this incident is a lesson learned by Apple in the process of advancing in India, and all parties will summarize it, and will not become the first sign of Apple’s withdrawal from the Indian market.

Investigate Wistron Violations

Wistron stated that they have investigated the problems complained by employees and realized the seriousness of the problem. Some employees did not get a proper salary, and the employees’ complaints were justified.

In the statement, Wistron said: “We deeply regret this and apologize to all employees. We realize that we made a mistake. Our process of managing labor intermediary and salary payment needs to be strengthened and optimized.”

Relevant departments of Karnataka state where the factory is located have investigated and found that the six labor companies that provide services to Wistron have not paid workers on time, and Wistron has also partially violated the labor law. State officials said that the actions of labor service companies have affected the investment environment of the state. In addition to facing fines, these companies may also be blacklisted.

The labor department in Karnataka pointed out that the Wistron factory originally implemented an 8-hour shift system, but it was changed to a 12 -hour shift in October. It did not explain the salary issue properly, and there was also an overtime record issue. Workers once complained that the machines and software used to record attendance failed so that they could not get their full salary, which intensified labor disputes.

In order to solve this problem, Wistron stated that it has replaced the company’s vice president in charge of the Indian business and opened a multilingual anonymous complaint hotline for employees.

On the 19th, Apple issued a “community letter” to Wistron, stating that it would not place new orders with Wistron until the Indian factory problem is resolved. Apple’s preliminary investigation results showed that Wistron violated Apple’s “Supplier Code of Conduct” and failed to implement proper working hours management procedures, which delayed the payment of wages for some employees in October and November.

In an interview with a reporter from China Business News, Chen Jing said that labor disputes are inevitable, but from past experience, employee strikes are a normalized event, but such a level of damage is rare, especially this time even Apple’s production line Also suffered.

Chen Jing analyzed that the crux of the problem was that Wistron had committed an empiricist problem in its management. It took the labor dispute lightly and did not foresee the serious consequences.

He said that Wistron did not communicate with the labor service company in time to stop its non-compliance problem, which led to such serious consequences. Now Wistron has also recognized the problem and has taken accountability to the person in charge of the management team.

Lessons in development

Wistron has been manufacturing Apple iPhone in India for nearly four years. After this incident, the Indian federal government, especially the Karnataka state where the factory is located, expressed serious concerns. They were worried that this would affect the local and Indian investment image.

Wistron has already opened 3 foundry factories in India and is one of Apple’s largest foundry suppliers. In an interview with a reporter from China Business News, Chen Jing said that this time Apple asked Wistron to make rectifications and suspend its new orders, and did not remove Wistron from the list of suppliers. This is a normal handling method. He expects that after a period of rectification, Apple will still resume Wistron’s orders.

At the same time, Chen Jing also analyzed that Wistron’s plant in India mainly produces relatively low-end iPhones, and there are not many new orders originally, while the high-end ones are produced and assembled by Foxconn’s factories in India. According to media reports, Foxconn’s plant in India has begun trial production of the iPhone 12, which is expected to come out within 2 months.

Chen Jing said that he noticed that Apple did not criticize the Indian employees who participated in the smashing, but criticized Wistron. He said that this shows that Apple is still quite optimistic about the Indian market.

Data show that Apple iPhone shipments in India in 2019 were only around 1.5 million units, which is less than 1% of global shipments. In this regard, Chen Jing told a reporter from China Business News that although Apple’s sales in India are relatively low, India’s population base is large and the market still has a certain scale, and overall iPhone sales in India are still going up, so Apple There are still considerable expectations for the Indian market.

However, some Indian economists are still worried. According to Abheek Barua, chief economist of HDFC Bank in India, the violence in the factory may weaken India’s potential to attract large foreign companies, and more importantly, foreign investors will be more cautious when considering whether to build factories in India.

(Source)