Coronavirus outbreaks in China continue to worsen as authorities tell 4 million people in the city of Guangzhou to stay at home. Now that another major manufacturing and export hub has gone under lockdown, it is difficult to ascertain when the situation will improve.
Major manufacturing and export hub in China goes under lockdown
Towards the end of October, Apple’s main iPhone assembler Foxconn was forced to work under closed-loop production protocols due to a COVID-19 outbreak in Zhengzhou. At the time, the company said that its attempts to deal with the outbreak were “progressing steadily.”
Foxconn even raised the daily bonus for employees to 400 yuan ($55) a day, up from 100 yuan ($13.77) as an incentive. However, the facility was placed under a week-long lockdown when it was alleged that workers were trying to escape the plant to avoid strict restrictions.
A source told Reuters company’s workers were forced to work in unfavorable conditions.” The source went on to say that “Initially there wasn’t enough to eat or drink,” and that essential supplies had to be shipped into the facility after the shortage caused “a sense of anxiety”, among workers.
Shortly after, Apple announced that it would be scaling back production of the iPhone 14 lineup at Foxconn’s facility in China. In reference to the situation, Wedbush and Morgan Stanley analysts said that Apple investors have nothing to worry about since the production issues will ease as lockdowns in the region will be lifted.
However, a new report suggests that lockdowns in China will not be eased anytime soon. The Wall Street Journal reports that the outbreak has spread to all of China’s provinces, 31 in total. “China’s manufacturing hub of Guangzhou locked down more of the city as the country struggles to contain the worst coronavirus outbreak in more than six months,” the publication revealed. Around 4 million residents were told to stay home by authorities.
Authorities in Guangzhou, capital of the export powerhouse of Guangdong province, said the restrictions would remain in place through the weekend in what they have described as the worst outbreak since the pandemic began.
Now, what does this mean for Apple? Given that the Cupertino tech giant and Foxconn thought that the situation was not going to impact production in the long run, we do not know if they are prepared for a lockdown that could span over weeks or months.
As of right now, we will just have to wait and see how manufacturers attempt to deal with the situation.