Apple suppliers shouldn’t make promises they can’t keep

Workers at Foxconn’s iPhone assembly plant had been told to return from their New Years holiday on Monday. That plan is no longer operative.

From “IPhone Maker Foxconn Warns Staff to Keep Away From Shenzhen Base” posted by Bloomberg news service Friday morning:

Hon Hai Precision Industry Co. told employees at its Shenzhen facility not to return to work when the extended Lunar New Year break ends Feb. 10, according to a memo obtained by Bloomberg News.

The moratorium represents an extreme effort by Apple Inc.’s most important partner to curb the spread of the novel coronavirus that’s paralyzed much of China’s manufacturing. Foxconn’s main iPhone-making base is farther north in Zhengzhou but coastal Shenzhen serves as its Chinese headquarters and the majority of the tens of thousands employed there are out-of-towners. The company also assembles a small portion of iPhones there.

“To safeguard everyone’s health and safety and comply with government virus prevention measures, we urge you not to return to Shenzhen,” Foxconn wrote in a text message sent to employees. “We’ll update you on the situation in the city. The company will protect everyone’s work-related rights and interests in the duration. As for the happy reunion date in Shenzhen, please wait for further notice.”

My take: Feb. 10 always seemed overly optimistic. Leaving the return date open ended is perhaps too pessimistic.

5 Comments

  1. Gregg Thurman said:
    Earlier this week I read that Foxconn extended the return date to February 17.

    If this story is current, as in today, then Bloomberg is late to the party.

    2
    February 7, 2020
  2. Jerry Doyle said:
    “…. Leaving the return date open-ended is perhaps too pessimistic.”

    While I am in some agreement with your take, I also am reminded of the authoritarian closed political regime (CCP) running the PRC. Just how extensive is the coronavirus in the country and just how many folk truly are dying? There remains unknowns relative with this virus and this delayed date of Foxconn opening of its iPhone assembly plant at the Shenzhen base (away from China’s interior and just north of HK) is another example of asking how extensive and how deadly is the virus within the mainland? It also is more reason for Apple to move expeditiously to diversified its global supply chain.

    There is a silver lining in the midst of all this ominous news. A billion plus folk are isolated in their homes and many own iPhones. As they grow bored secluded in their homes, they seek entertainment and new entertainment to mitigate their doldrums. They buy new apps, subscribe to Apple Arcade, and seek out other potential Apple services. This increased revenues may mitigate, if not increase Apple’s revenues in the end.

    1
    February 7, 2020
  3. Fred Stein said:
    In brief:
    Near term: Possibly delay shipments and revenue, but no sales lost.
    Long term: Slight acceleration of some services subscriptions, mainly Arcade.

    2
    February 7, 2020

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