Another Reason to Move the Supply Chain

This time for the Republic of China’s Foxconn, which among other things, assembles iPhones in a People’s Republic of China factory in Zhengzhou.

In Foxconn’s main Zhengzhou facility, the world’s biggest assembly site for Apple Inc’s iPhones, hundreds of thousands of workers have been placed under a closed-loop system for almost two weeks. They are largely shut off from the outside world, allowed only to move between their dorms or homes and the production lines.

The mainland Chinese workers are causing their own problems for Foxconn, also.

“It’s too dangerous to go to work,” a 21-year-old worker who has been confined to his dorm told The Wall Street Journal, saying that he was skeptical about the company’s claim that there was a low level of infections at the plant.


Some workers interviewed by the Journal said many colleagues had refused to go back to the production lines. Others had simply left, they said, sometimes abandoning their belongings.


Another Foxconn employee said most of his dozen-strong team of night-shift workers had either been taken to a quarantine facility or had refused to return to work. ….
“I don’t know who around me is a positive case,” said the worker, who has been confined to his dorm for a few days. “I’d be better off staying in the dorm.”

For good reasons or ill, the bottom line is that Foxconn cannot rely on its mainland collection of employees, much less the PRC government’s capricious responses to its Wuhan Virus situation.

Foxconn would be much better off to move its production/assembly facility back to the Republic of China, or to Vietnam, or to expand its nascent production/assembly facility in the US, or some combination of the three. The transition will be expensive, of course, but only in the short-term. Intermediate- and long-term, the company will be much better off, with a more reliable and stable work force, and so will Foxconn’s customers be.

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