Fight club

Having a riot

While Tim Cook was making an upbeat statement on Monday that an initial quota of five million iPhone 5s had sold out (Apple was “working hard to build enough iPhone 5s for everyone”, he reassured), little did he know that production at one of the plants of his leading iPhone assembler was in turmoil.

Operations were halted at Hon Hai’s production base in Taiyuan, the capital city of Shanxi province, after a dormitory dispute erupted into an overnight riot involving 2,000 workers. Photos went viral showing smashed windows and overturned cars. Local authorities sent in 5,000 police to restore order.

Hon Hai was soon proclaiming that the single-day hiatus at its subsidiary Foxconn wouldn’t delay shipment schedules, not least because the Taiyuan plant doesn’t assemble the iPhone 5s. But the Taiwanese electronics maker didn’t confirm whether the factory was involved in making iPhone 5 parts.

It sounds like the anger in Taiyuan has been close to the surface for a while. “For 10 consecutive hours, I processed 3,000 iPhone-5 back covers… I plonked a component back onto the production line repeatedly, spouting swear words each time. Everyone beside me was doing the same,” wrote an undercover reporter sent by the Shanghai Evening News to the factory in late August, who also wondered how the factory’s 79,000 workers withstood the mental and physical pressure of their monotonous daily routines.

In fact, they couldn’t withstand it. Less than a month later, the Taiyuan plant was in uproar. According to witness accounts on weibo, the riot started when security guards – local staff from Shanxi – beat up a worker from the province of Shandong. “It isn’t unusual to see security staff beating up workers,” the China Business News quoted one worker as saying. “But these are being covered up by the company.”

Hon Hai has admitted that aspects of its labour relations need overhauling but pleads that tensions are difficult to avoid in a company of such size and complexity.

“Conflict is sometimes inevitable considering that we have staff coming from different places with different backgrounds,” Simon Hsing, Hon Hai’s spokesman, told the United Daily News.

Hsing also went on to blame “certain mainland youngsters redirecting their anti-Japanese sentiment towards Hon Hai,” which has close business relations with Japan’s Sharp (see WiC145).

That Hon Hai has been drawn into the Diaoyus/ Senkakus dispute will irritate its founder and chairman Terry Gou, who made an audacious attempt to smooth tensions in June by saying he was willing to personally acquire the islands.

Meanwhile the mass relocation of labour-intensive manufacturers into China’s inland regions (and away from the more expensive coastal zones) is reshaping the migrant labour market. One outcome is that many new workers are employed closer to their homes, which means lower risk in abandoning jobs they don’t like, and higher staff turnover for employers.

Nor is the labour supply always as abundant as hoped. The Morning Life Post, a Shanxi-based newspaper, reported in March that Hon Hai needed to hire 20,000 new workers in the province after landing a big contract to make iPhones. But the hastily assembled workforce needed to absorb large contingents of migrants from nearby provinces, creating the type of management challenges said to have prompted unrest in Taiyuan this month.

But the most important change within Hon Hai’s workforce could have come from the company’s own making: wider awareness among workers of their rights, especially following the infamous spree of suicides two years ago at Foxconn (for our coverage of this see, for example, WiC63). “Foxconn’s factories have now amassed a new generation of migrant workers. In the face of oppression they are more restive than their fathers’ generation,” a commentator wrote in the Beijing News this week. “They are more aware of their own rights, they have higher expectations on equality and respect… [and] any minor trigger could start a mass incident.”

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