Apple’s supply chain in Asia has been hit by worker unrest after staff at the iPhone maker’s contractors in India and China protested over unpaid wages and bonuses.
The US tech group said it would suspend new business with Wistron after discovering that the Taiwanese manufacturer had violated its supplier policies by delaying payments to workers at a factory that makes iPhones near Bangalore in southern India.
A demonstration on December 12 at the plant, viewed as a leading example of India’s efforts to boost local tech manufacturing, escalated into rioting. Protesters smashed and set fire to property, resulting in damage costing an estimated $7m, while police made dozens of arrests.
Wistron subsequently apologised to the workers after finding that they had not been paid correctly or on time, saying it was removing its vice-president for India. It would restructure its payroll and recruitment teams in the country as a result. “We made mistakes as we expanded,” it said.
It is also a setback to Apple’s growth plans in India, the fastest-growing smartphone market, as well as New Delhi’s “Make in India” initiative, which seeks to woo global manufacturers. Boosting smartphone production, which India has painted as a win for both companies and workers, has been central to these efforts.
Number of iPhones Apple reportedly wants to build in 2021, a 30% year-on-year increase
Separately, workers on an Apple assembly line in China protested over unpaid bonuses on Friday and Saturday, underscoring the company’s challenge in managing its vast pan-Asian supply chain during the busiest season for device production.
More than 100 Shanghai-based staff at Pegatron — the second-largest assembler of iPhones — demonstrated over unpaid bonuses worth up to Rmb10,000 ($1,530) each, according to social media videos and advocacy group China Labor Watch.
“Give us back our blood and sweat money,” chanted workers outside the Pegatron plant, according to a video sent by a worker to the Financial Times.
The protests were by dispatch workers — casual staff employed by agencies in partnership with Pegatron. These agencies often promise staff about three to four months of wages as bonuses to compensate for low base pay. The number of dispatch workers a company can hire is limited under Chinese law.
Apple tends to announce new devices in October and November, meaning its suppliers face a tight schedule to hire more workers at the end of the year.
Apple’s suppliers are under even more pressure this year, as the company plans to increase iPhone production by 30 per cent to 230m devices in 2021, according to Nikkei Asia.
Following an investigation into Wistron conducted in response to the unrest in India, Apple said on Saturday it would stop “new business” with the supplier until it completed “corrective actions”. It added: “Our main objective is to make sure all the workers are treated with dignity and respect, and fully compensated promptly.”
The move to punish Wistron follows Apple’s announcement last month that it would also stop giving new business to Pegatron, after the Financial Times found that thousands of student interns had worked overtime to assemble iPhones, in breach of Chinese law.
However, workers at Pegatron’s plant in Kunshan near Shanghai say they are still manufacturing iPhones. Apple has not defined what it meant by “new business” or specified what “corrective actions” its supplier would have to take.
Apple and Pegatron declined to comment on the China protests.
Additional reporting by Qianer Liu in Shenzhen