Taiwan’s Foxconn, which makes smartphones for global vendors including Apple (
AAPL.O),
has filed requests to reopen factories with Chinese authorities, the
source said, adding that a full resumption was not possible until late
February due to various travel restrictions imposed to curb the virus.
A delay in the resumption of operations could have an impact on the
global technology supply chain and shipments to Foxconn’s customers,
including Apple.
“Roads are closed in some parts of the country. Nobody knows for sure
if some workers could get back in time,” said the source, who described
a “chaotic” situation in the company’s top management as it scrambles
to meet different requirements for the resumption of operations set by
various local governments across China.
“A full resumption will take at least one to two weeks from Feb. 10.”
In some cities, authorities are asking companies to put workers
returning from other provinces under a three-day quarantine, which was a
challenge for big companies like Foxconn, the source said.
“How is it possible to quarantine tens of thousands of people in one neighborhood for three days?” the person said.
The factory halt is set to hit Foxconn’s profit for 2020 but it was still evaluating the likely impact, the person said.
“Profit is definitely going to be hit, but as to how big the impact will be, we’re still calculating,” the person said.
Foxconn did not immediately respond to a request for comment.
The outbreak of the coronavirus, which the World Health Organization
has declared a global health emergency, threatens to disrupt swathes of
Chinese manufacturing and will force policymakers to ready measures to
stabilize the economy.
Companies in China, closed for the Lunar New Year holiday, were told
to stay shut for an extra week, until as late as Feb. 10, including
those in the southern manufacturing hub of Dongguan in export-oriented
Guangdong province, where some iPhone plants are located.
Foxconn, the world’s largest contract electronics manufacturer, was
making plans to ensure the health and safety of its hundreds of
thousands of workers, including scanning a QR code on employees’ mobile
phones for health screening.
The company will use local workers as much as possible while allowing
time off for those who can not travel long distances to get back to
work, according to an internal document reviewed by Reuters.
Foxconn’s factories are dependent to a great extent on migrant workers from poorer regions.
“We will be very glad if the return rate could hit 30% (on Feb. 10),” the source said.
Shares of Foxconn, formally known as Hon Hai, have dropped more than 10% since the market
.TWII reopened last week following the Lunar New Year holiday.
https://www.reuters.com/article/us-china-health-foxconn/foxconn-sees-full-china-production-resuming-late-february-source-idUSKBN1ZZ10B
