Apple supplier Wistron quadrupled workers in India in only eight months, ramping up production just as Apple began direct online sales in India. The only problem: Wistron Corp.’s systems weren’t robust enough to handle the deluge. Fed up workers revolted.
The number of workers at the Taiwanese company, the first Apple supplier to produce iPhones in India, surged to about 9,000 in November from some 2,000 just before the pandemic, according to people with knowledge of the matter.
The rapid expansion stretched the company’s systems and sapped the bandwidth of its management team, one of the people said. Its employee access system soon foundered, leaving it with patchy attendance records, delaying wages and overtime pay. Wistron’s human resource team — comprising about three people — just couldn’t cope up with the workers’ grievances. On Dec. 12 many workers — promised roughly 15,000 rupees ($200) a month — rioted over unpaid salaries.
As the night shift crew finished on the morning of Dec. 12, workers streamed into the human resources department to ask for their salaries, according to a statement by the All India Central Council of Trade Unions. The workers were turned away. The violence started soon after, according to the AICCTU, which visited the area after the riots… Apple has said it is investigating the incident and whether Wistron adhered to its labor practices. It sent staff and auditors to the site, in cooperation with the local police.
The incident holds lessons for host countries as well as companies looking to relocate facilities out of China, according to Guoli Chen, professor for strategy at INSEAD in Singapore… U.S. and Japanese companies have over the years understood how to set up subsidiaries in foreign cultures, while Chinese and Taiwanese firms are new to this — so they should take more time to identify potential weak links and proactively work to mitigate risks.
MacDailyNews Take: The solution to this is to make sure the workers are paid in full for their work while sitting down with them, explaining the issues and solutions, and then following through. Over-deliver, in fact. We trust Apple and the Indian government will watch Wistron closely here to make sure it does the right things.