10 feared dead in Foxconn factory riot; Apple iPhone 5 production line damaged, shut down for 3 days

“We have exclusive news on a riot breaking out at Foxconn’s Taiyuan plant, the main location where 57 million units of iPhone 5 need to built for each year,” Steve Lo reports for M.I.C. Gadget.

“2,000 workers were involved in the mass brawl at the factory, and 5,000 police officers were called… at least one iPhone 5 production line got damaged,” Lo reports. “10 deaths have occurred from Foxconn Taiyuan riot, according to CPCW (China Popular Computer Week). However, Foxconn confirms that no employee deaths have occurred from the riot: ‘We can confirm that there have been no employee deaths related to the incident which took place at an employee dormitory in Taiyuan last night. Reports to the contrary are inaccurate.'”

Lo reports, “Our sources indicated that one of the security guards hit a Foxconn worker and this made even more of the workers angry and they started to beat up the security guard and others who tried to stop the fighting. Eventually as the Foxconn hired security was overwhelmed rather quickly, they called for backup. They have said it is a dispute between “workers” that started between 10-11pm on September 23rd. However it rapidly escalated from there… Around 40 people are in hospital, but again we suspect many more.”

More info and many photos in the full article here.

Related article:
Riots break out at Foxconn factory in China – September 24, 2012

49 Comments

    1. But….. But….. It just will not be as media attention getting if we cannot blame Apple for this… After all, Tim Cook should have known that something like this could have happened.

      Just a thought.

          1. LOL!!
            That needs to be the new standard reply to any of the worlds bad news. !!!

            ALA Saturday night live. “Francisco Franko Is dead. —- That would never have happened if Steve Jobs was still alive!”
            Just a thought.

    1. As an American resident of the Middle East, I can assure you that there are not nearly as many rocket launchers as you are led to believe. Don’t forget the topic already addressed above in a different context: sensationalism sells. Don’t believe the hype.

    1. It’s all relative. Remember the potential workforce is ~1.4 billion! Humans are plentiful and cheap in China which is the ONLY reason the world has moved most assembly lines there.

      1. The USA Loves China as it fuels the American way of life! Americans borrow to no end and the Chinese lend to America to no end. Can’t wait to see what the future will hold for the USA when the Chinese start asking for some of it back.

    1. Actually there is a Foxconn policy that if you are near death, you are fired immediately. If you recover, you can apply for reinstatement.

      NO Foxconn employees have ever died. EVER!!!

      Lol

  1. I’ve seen things like this in China before… More than likely it has nothing to do with work or working conditions. It sounds like a personal issue between some people, that obviously escalated.

    I was living in a dorm in China and saw something similar… Two guys got in a fight and “took it outside”. Next thing you know each guy has 10 buddies behind him. Then friends from nearby factories start showing up with sticks, bats, etc. (it was out in the street by then). After a little while I couldn’t tell what the hell was going on. Just pure chaos.

    People just get their riot on sometimes… Los Angeles, London, etc..

    1. I’m waiting for the ultimate irony statement about how the riots started, such as the workers demanding MORE overtime, like they were earlier in the year. They DIDN’T WANT their hours cut back to those found in civilized countries. They wanted MONEY, not respect. 😯

    1. Only the iPhone 5 production line was shut down because that was the production line that caused the riot. Those employees were forced to work 24/7 in order to make enough iPhone 5 supply for the introductory weekend. They couldn’t take any more and started the riot. Rumor has it that it will actually take a week for the production line to be restarted because some key assemblers got injured. By then Apple shares will be sitting around $650. None of this would have happened if Steve Jobs was alive. He would have flown to the factory and smoothed everything over.

      /s

  2. Is it me, or is there a problem with so much reliance on Foxxconn? Is it about time Apple move manufacturing to America and Europe to offset the issues of Foxxconn and to share the wealth into the markets that support Apple by buying their products?

  3. “After a riot occurred in one of Foxconn’s manufacturing facilities in China, the company issued a statement on Monday to say there were no employee deaths, and that production will resume on Tuesday.”
    – apple insider

    also at cnet.
    http://news.cnet.com/8301-13579_3-57519024-37/apple-supplier-foxconn-production-will-resume-tomorrow/

    other articles suggest the fights were a personal nature and started in the dorms
    (I don’t know what the truth is but many of these are young people with plenty of hormones .. !)

  4. All major US corporations have lost control of their manufacturing chains. The race to the bottom world wage is frought with risks that company executives have always ignored. Perhaps this will wake them up.

    Recall that it took riots with deaths at Ford plants before Henry realized that his profit was negligibly impacted by doubling his factory wages. With those wages he demanded superior worker performance, and he got it — along with a growing market of loyal Ford families who could now consider buying the product they built.

    Today Apple isn’t getting the best performance out of its sub-contracted assemblers. Foxconn workers aren’t more precise or efficient when building the Apple product. Not a good way to ensure product differentiation and production robustness for the long term, even if design is unique and patented up the wazoo. Apple is stuck with a pile of orders and now has no way to fulfil them on time, and seemingly no plan B.

    Apple, like any major company, would be vastly better off operating their own manufacturing facilities on each continent, attracting the best people with wages at or above the local prevailing level. Yes, the North American phone would cost more than the near-identical Chinese model. But stores would have them in stock, wouldn’t they?

    1. @mike

      sorry there so many holes in your theory:

      1) more expensive iPhones?
      How many THOUSAND ‘hate apple’ articles and reviews have you read saying that apple products are TOO expensive?
      I must have read like 20 that although inferior ‘PC ultrabooks’ are at least cheaper than macs.

      ALSO what’s to stop made in China DELL , HP , not to mention Samsung, HTC , LG , Lenovo from FLOODING the market and making ‘Apple buyers are idiots advertisments’ (like samsung has been doing).

      Apple USED to manufacture in USA. After apple Steve Jobs even made NEXT computers in California. But the PC guys made in Asia and you got Mac at 2% marketshare dropping from Apple II at 30%. American consumers happily bought Sonys and Samsungs and made in asia Compaq etc PCs.

      Jobs could NOT EVEN SELL expensive made in USA NEXT COMPUTERS TO USA GOVENRNMENT FUNDED BODIES like Colleges , Research labs. The same government who is complaining that apple does not manufacture in the USA.

      2) American tech workers like trained tech and engineers expect good pay not minimum wage. (why work in a factory for minimum when you can make a lot more as a PLUMBER or auto mechanic? )

      Our whole schooling system (my wife has a Masters in Education from Chicago and I worked for years in asia) is not designed to train factory workers like Asian schools. Asian schools are punishing with tough government exams, students are taught to follow orders without arguing , science maths in high school is equal to 1st 2nd year college USA. American schools emphasize ‘well roundedness’ with plenty of sports, outings to zoos etc, debates etc. American kids want to be rock muscians and sports stars.

      in Asia besides colleges and universities there are thousands of what they call ‘Poly Technics’ (almost on every street corner) churning out thousands of tech workers. China churns out many times the number of engineers and Phds than USA. Foxconn can afford (from what I read) 5000 engineers just to supervise the production lines for Apple (they are using engineers for line work!).

      3) the whole union and other issues like Spending and cost of living in the Western World need to be dealth with.
      Apple store workers in France are on strike wanting a Fully Paid 13 month (of paid no work) — I can imagine Apple manufacturing in the Western world having similar issues.

      The USA has borrowed over 1 TRILLION (1 million million) from China alone to finance it’s economy. This means that Americans including their government are living way beyond their PRODUCTION. I mention this because there are MACRO issues in competetive manufacturing.

      I could go on and on but for space I’ll stop here.

      1. shoot I forgot to even add this:

        4) open manufacturing (especially for Apple) and the greenie crazies like greenpeace would be all over it. Take the Apple server plants (which doesn’t even produce industrial wastes like mercury etc) and Greenpeace ENDLESSLY condemned them even though half of the power used in the famrs was renewable. Apple has to now make it 100% renewable to please them.

        Imagine if besides just relatively clean server farms apple was to open FACTORIES with industrial wastes… dear lord almighty, I can just imagine greenpeace and their cohorts (who use apple to generate publicity for funding) rubbing their salivating in anticipation…. there would ‘occupy’ type protests camped outside for months.

        meanwhile Asian PC and cell phone makers can make cheap phones while dumping wastes into the river AND still be alllowed to SELL in the USA (remember android marketshare which the press like to point out repeatedly : android 70% iPhone 16% )…

        1. @ Dom:

          1) Prices are set on what the market is willing to bear, not on what it costs to build the device. iSuppli estimates the 16gb iPhone 5 has about $200 material costs and $8 manufacturing labor costs per unit. http://www.isuppli.com/Teardowns/News/Pages/iPhone5-Carries-$199-BOM-Virtual-Teardown-Reveals.aspx
          What is the selling price at your neighborhood store?

          2) American workers will do what is required of them. No one can correctly state there aren’t good people looking for work. Not everyone can be, or wants to be, a white collar cubicle dweller. Your cynical stereotype of American kids identifies a trend that, interesting, Apple itself promotes. hmmm…

          3) Asian and European car manufacturers continue coming to USA to ensure local production close to the market they wish to serve. It works well in that industry, and it allows them flexibility to shift production when natural disasters strike. (you may recall recent Thai floods putting computer HD manufacturers behind, and the Japan tsunami wreaking havoc on northern Japanese industries for months). So you really think that the on-paper economic efficiency of putting all your electronic gadget production in the hands of one supplier, at one location, is wise? Heck, why don’t you also sell all your mutual funds and invest all your retirement savings in Foxconn too? You know you can’t lose, right?

          4) The USA has a lot of advanced clean manufacturing facilities. Intel hasn’t fled to Asia. American steel companies remain the most competitive in the world. Detroit has caught up with Toyota in vehicle manufacturing efficiency. Environmentally responsible facilities can be found all over the USA and Europe. Why do western corporations you think they need to pollute China’s air and water? Because they can? See point #1 if you think they’re saving money. What they are really doing is shifting production closer to where they think the next growth market will be. And it is a good idea to ADD production capacity there, just not to put all one’s eggs in the Chinese basket. The long-term consequences are not worth it.

          Eventually the corrupt Chinese government will wake up and demand retribution for the dirty backward industrial policy that it itself encouraged. Won’t that be a pleasant day for foreign corporations who have zero leverage in the communist country. Heck, one might even predict that only when China’s communist government has absorbed all the IP it thinks it needs will they snap the jaws of its trap — confiscating all production facilities exactly like the former USSR did many times over. How do you think Russia was able to hold the eastern front in WW2? It nationalized all industry. Why do you think China would do anything else? They don’t have democracy there, and have no intention of implementing it either. The short-term tax benefits with which western corporations have been baited can evaporate tomorrow. It’s happened before.

          1. 1) You haven’t addressed my point: if apple products are more expensive history has shown that the American consumer will GLADLY buy cheaper Samsungs, Acers, lenovos etc.
            More expensive apple products will work if you BAN imports — will that happen? Nope because other countries will ban U.S exports too…

            2) car industry:

            it’s really heavy to ship cars that’s why they build in U.SA plus there’s a lot politics involved including tarriffs.

            “Detroit has caught up”
            the USA auto industry took billions of dollars government bailouts to survive

            3) Intel has plants in china

            look I’m not anti USA but I’m right from the simple fact is that hardly any of the tech companies manufacturers here
            HP, DELL, Motorola, Microsoft (xbox made in Foxconn) etc all manufacturer in Asia. Shoot even korean SAMSUNG and japanese firms have numerous plants in China!

            interesting that Steve Jobs got tim Cook who used to work for IBM, Intelligent electronics and Compaq to straighten out Apple’s supply chain . Cheap PCS were killing Macs , today it’s very hard for tablet, mp3, phone makers to undercut Apple — apple was almost dead and now apple is the largest market cap tech firm in the world (these are the facts)

            1. @ Dom:

              1) you refuse to recognize the difference between manufacturing cost and retail price. Apple has the largest profit margin in the business. It could drop prices if it needed to, or allow mfg costs to increase without raising retail prices. This is not as big a deal as people think, since a drop in prices leads to greater sales, a long-standing issue that allowed copycats like Android and Microsoft into the market.

              2) and there’s no shipping cost for electronics. no politics either? That’s news.

              Detroit caught up before bail-outs, and are still building cars competitive with foreign manufacturers. Do you think foreign makers don’t also receive government incentives and underwriting? You might be surprised how many manufacturers around the world are underwritten or partially owned by their respective governments, not to mention the tax incentives that large companies receive for locating their business in countries and states that are desperate for employment increases.

              Anyway, Detroit is back, if you’ve test driven one in the last few years, you’d know. Cars, like electronics, become a choice of personal taste, as reliability and performance on the measures that the average driver cares about are very close, and better than ever before, but your bizarre contempt for domestic industry smacks of blind ideology rather than objective assessment.

              3) Duh. A worldwide company should have plants scattered all over the planet, that is my point. Intel didn’t shutter US plants to open Chinese plants. Are you just trying to be argumentative?

              Tim Cook isn’t a savior. Thousands of Apple employees are involved in sourcing and manufacturing. But outsourcing too much, or too recklessly, means loss of control over schedule and quality. HBR has tons of cases showing how outsourcing often backfires. A JIT supply chain stretched tight is also a vulnerable one. Apple, and all other manufacturers that have concentrated their mfg in a communist country with inadequate IP law, labor law, environmental law, and so forth should expect to see more disruptions in the future. At some point the Chinese people will wake up and demand better work conditions, a 40-hour work week, clean air & water, and so forth. As they should. The French Revolution was a nice clean operation compared to what could happen if a billion Chinamen finally got wise to their corrupt government’s repression. Corruption that western corporations are entirely complicit in maintaining, shamefully.

            2. 1) “retail pricing… blah blah blah”
              dude you still haven’t answered me:
              — if apple manufactures in USA it’s going to be more expensive regardless of how you look at it. Dell, HP. Samsung , acer, lenovo etc will undercut it just like the old Mac vs Asian made PC days and from history consumers will go cheap. History : cheap PCs almost killed Apple (mac)
              The iPhone is better than Android yet android has 60% marketshare vs 16 apple, why? People buy cheap. People buy androids even though it’s just a few bucks cheaper (even smaller percentage wise if consider the contract price). Slicing profit margins is a slippery slope. make less money and companies like Google and Microsoft will use their secured billions (search, windows) to undercut you (re: Msft did it with Explorer to Netscape). Apple spent billions on Nortel patents, billions to secure components like Nand chips at bulk price (didn’t calculate that did you? your cost of component thing will skyrocket — like is happening to Windows tablets — if Apple didnt have that big cash wad).

              — “and there’s no shipping cost for electronics. no politics either? That’s news.”

              dude, a car weighs half a ton, how many iPhones can you pack into that? look at the profits and shipping costs.. etc

              the politics of massive union control auto industry… not too long ago there was a tiff between china and Obama about taxes to american made cars to China due to import tarriffs on Chinese made car components like tires. Go google it.
              (think about it: Politicians bailed out car companies several times, did they bail out Palm?)

              The auto industry is going but it’s still billions in debt to the government, for example the government is one of the largest stockholders of GM (the stock now worth Billions LESS than the government paid for it)

              Aug 2012
              Forbes “Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesda…”

              come off it without numerous government bailouts (one of the largest just a few years ago), without protective tarriffs the auto industry will be in shoot load of trouble.

              3) intel : I’m being argumentative?
              this is your statement complete : “Intel hasn’t fled to Asia. ”
              I just pointed out that they manufacture in China as well.
              as Tim Cook as said some of Apple’s components are made in the USA like some of the chips in Texas.
              so Apple makes some in USA , Intel makes some in china so whats your point again?

              —-
              in my original post I didn’t even address another big issue which Tim Cook brought up which is the production eco system:
              Apple can’t build just it’s own factories , what about the suppliers? In China there are hundreds of supplier factories producting components. Did you listen to Tim Cook’s explanation of this in the All Things D conference? He said all the tool and die makers in USA would fit in the conference hall, in China you would need a small city. And a lot of the processes like the glass screen are complex and companies like LG, Samsung, Sharp etc hold patents for some of the processes. Will they build factories in USA just to supply apple?

              apple fans always harping like apple critics that apple should build in USA, apple is not loyal etc is dangerous because NONE of its competitors are facing those problems.

              Google gives away (stolen) American Intellectual Property Android to foreign companies like Samsung to compete with american companies like Dell, Apple, Microsoft etc yet no one says anything. (maybe you should spend time complaining about hat?)

              Politicians etc are constantly railing against apple for manufacturing in China , that politician from San francisco Willie Brown (I think) told the ‘ occupy ‘ people to protest in front of apple. Meanwhile Google , Samsung, Acer are laughing thier heads off.

            3. Dom, undercutting price can be done no matter what the mfg cost is. Heck, you don’t even have to make a profit if you’re out to kill your competitor over the long term by taking market share. You’ve never heard of “loss leader” sales? Fact is, few people know what a mobile phone costs anyway: they have been herded into subsidized service contracts that hide handset prices altogether. Android products built at Foxconn will have a similar cost baked in, and a US-made phone might cost 10% more. Yippee.

              let’s just cut your argument down to its core:

              You want to accelerate outsourcing to maximize short-term profits.

              I propose that Apple (and all manufacturers) spread manufacturing risk for long-term prosperity. This prosperity is augmented by all kinds of things that accountants summarize under the term “goodwill”. It doesn’t show up on your sacred bottom line this quarter. Political stability. IP risk. Community involvement. Brand equity. NGO support. Company image. The list goes on. A local facility does wonders for garnering public interest in the product you plan to sell them — assuming they make enough to realistically afford it.

              Go ahead and ignore all these at your peril. But as the trends continue (USA shuttered over 45k factories since 2001, and lost over 1/3 of its manufacturing workforce), don’t let me hear you bitching about unemployment in the USA, because that is one of the many symptoms of a hollowed-out manufacturing sector that both corrupt political parties seem hell-bent on accelerating (by direction of their corporate overlords). Not everyone in the USA is going to become a doctor or lawyer. And someday you’ll wake up and realize that Apple’s increasingly bloated overhead required to manage overseas logistics, customs, shipping costs, currency volatility, communication, and foreign governance issues ate up all the “savings” that the poorly-paid assemblers supposedly saved you. I doubt you’ve given any of this real study, Dom.

              What makes you think the Chinese government as any intention of sending the USA cheap products AFTER the USA has been completely gutted of manufacturing facilities?

            4. Dom: don’t just take my word for it. Read what consultant firm Accenture says:

              http://www.manufacturingnews.com/news/11/0415/Fellowes.html

              “Companies are beginning to realize that having offshored much of their manufacturing and supply operations away from their demand locations, they hurt their ability to meet their customers’ expectations across a wide spectrum of areas, such as being able to rapidly meet increasing customer desires for unique products, continuing to maintain rapid delivery/response times, as well as maintaining low inventories and competitive total costs,” according to Accenture analysts John Ferreira and Mike Heilala, who head the company’s North American Manufacturing practice.

              Having surveyed 287 manufacturing companies, Accenture found that 61 percent are considering moving some of their manufacturing back to their home market. Ferreira and Heilala describe this as being a “secret shift” and a “quiet trend.”

              “The overreliance on direct costs to the exclusion of other legitimate cost factors distorts the business case for offshoring and likely many decisions to offshore were incorrectly made,” say Ferreira and Heilala.

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