Foxconn's Plans to Restart Apple Device Production on Monday Were Called Off By Chinese Health Authorities [Updated]

[MacRumors]

Foxconn was originally planning to reopen its factories on Monday to begin production on Apple devices after the Lunar New Year holiday, but the company's plans were denied by Chinese Authorities due to the ongoing coronavirus outbreak, reports Nikkei.

Public health experts told Foxconn that its Shenzhen factories face "high risks of coronavirus infection" after on-site inspections were conducted, with the information relayed to Nikkei through multiple sources. Health officials were concerned about the poor airflow in restaurants and dormitories, and the use of central air conditioning.

"Violation of epidemic prevention and control could potentially face the death penalty," the internal meeting memo seen by the Nikkei Asian Review said.

Foxconn's Zhengzhou complex, which is its biggest iPhone factory, has also cancelled plans to resume work on Monday. Local governments are concerned the virus will spread quickly in a labor-intensive working environment, and "no one wants to bear the responsibility of restarting work at this critical moment," one of the sources said.

Foxconn on Friday cancelled flight bookings for Taiwanese employees to go back to China, and the company already told employees in Shenzhen not to return to work.

The Zhengzhou complex will remain closed until it has until it has been evaluated and approved by the local government. Innolux, Foxconn's display arm, will also remain closed for the time being, and iPad supplier Compal Electronics also has plans to stay closed until February 17.

Apple has also extended the shutdown of its own retail stores in China. Stores were supposed to open on Monday, but Apple has decided to wait until February 15.

There have already been multiple reports suggesting these factory closures will have an impact on Apple's device production plans, and we could see dwindling device supplies and lengthening shipping times in the near future. AirPods and AirPods Pro could be impacted as a product already in short supply, and these delays may also affect the upcoming low-cost iPhone that Apple has in development.

Production on the new low-cost iPhone, which has been referred to the "iPhone SE 2" or the "iPhone 9" was supposed to begin in February, but it's not clear if Apple will be able to remain on schedule.

Foxconn told Nikkei that its operation schedules for facilities in China follow local government recommendations, and that it has not "received requests from [its] customers on the need to resume production earlier," but it did slash its 2020 revenue outlook earlier this month.

The coronavirus has infected more than 31,000 people and caused 722 deaths, mainly in China.

Update: Chinese officials have denied preventing Foxconn's plans to reopen. In a statement seen by Reuters, health authorities in Shenzhen's Longhua district where Foxconn's largest factory is located said that the report was untrue and that it was still conducting checks.

Production at Foxconn facilities will restart when inspections have been completed, and Foxconn has submitted coronavirus prevention proposals that include temperature checks, requiring employees to wearing masks, and implementing a safe dining system.


Article Link: Foxconn's Plans to Restart Apple Device Production on Monday Were Called Off By Chinese Health Authorities [Updated]

 

[RUQRU]

Apple needs to move its production facilities back to the USA.

 

[BootsWalking]

Violation of epidemic prevention and control could potentially face the death penalty

In one of two ways - by firing squad if you're caught in violation of the policy, or from become infected with the virus and dying.

 

[I7guy]

After this Foxconn will definitely make sure it has adequate global manufacturing capacity.

 

[swingerofbirch]

Stuck between two ruthless superpowers

 

[WannaGoMac]

Apple needs to move its production facilities back to the USA.

yes and I bet you’d be willing to pay $3k for an iPhone?? That’s assuming they could even find the type of skilled labor willing to do assembly line work(and keep doing it after Apple tried training the workforce).

 

[OSXconvert]

I bet factories nationwide will be delayed opening at least another week, if not until March. It is a brutal reality for all Chinese manufacturing, but better safe than sorry. Hopefully we are reaching peak infections this week, with a steep drop-off coming because of precautions.

 

[mi7chy]

Not diversifying manufacturing makes Tim Cook incompetent compared to Elon Musk's manufacturing per continent model.

 

[ChrisA]

yes and I bet you’d be willing to pay $3k for an iPhone?? That’s assuming they could even find the type of skilled labor willing to do assembly line work.

If the iPhone were to be made in the US it would be designed differently so as to not need human labor. It would likely turn out to be heavier and thicker but the parts would be designed to "self align" and "click" in place and not depend on any tiny screws. The cost could be about the same.

When you design a part of any kind you think about how it will be made. You design very differently if that art is made by hand or if it is CNC's metal or it it is going to be 3D printed. You don't design things in a vacuum

But moving production to the US would not create any jobs. These robot factories tend to not have many humans inside. Look at the photo below of a robot factory and you can count the number of humans on your thumbs (don't need to use fingers) This is the way to move production to US. (Funy is that this car factory is in China)

 

[Seanm87]

Cue people blaming macrumors for "not thinking about the human impact" even though its page is about apple and things that affect them and is simply factual and doesn't make light of the human impact either.

 

[Hodar1]

yes and I bet you’d be willing to pay $3k for an iPhone?? That’s assuming they could even find the type of skilled labor willing to do assembly line work.

Absolutely, because everyone knows that Tesla cars are outrageously overpriced, right?
Dell Computers can't begin to compete, despite what Round Rock, TX throws out - or are you mistaken?
Jobs are coming back to the US, for a variety of reasons. As the global economy equalizes, profits from foreign countries decrease. Having worked with India, with highly skilled mass manufacturing in Mumbai, if we had a production issue, we lost 8 hours of production in India, then due to time differences and root cause analysis, solutions analysis, verification/validation and implementation, plus time differences - we often lost at LEAST a full two days production. If the same thing had happened in the US, the labor cost would be measured in hours, not days.
Add in shipping, taxes, rising costs due to changing world economies, robotics and the technology required to sustain these robotics - things are changing.

 

[rinik]

Not diversifying manufacturing makes Tim Cook incompetent compared to Elon Musk's manufacturing per continent model.

TSLA is not even close to the scale at which AAPL operates. Also, manufacturing 150+ million iPhones/year (without leaking info) is near impossible task, still Tim is able to pull out successfully. Tim Apple is next to none in terms of managing global supply chain. Please read more about AAPL supply chain.

 

[AlanShutko]

This makes sense. It hasn't been sounding from the news reports that things are coming under control. From what I heard, Hong Kong just closed their border to Chinese arrivals.

I have a BTO MBP order in. The delivery date hasn't slipped yet, but I'm sure it will.

Absolutely, because everyone knows that Tesla cars are outrageously overpriced, right?

For the build quality, many people argue they are.

 

[RalfTheDog]

Absolutely, because everyone knows that Tesla cars are outrageously overpriced, right?
Dell Computers can't begin to compete, despite what Round Rock, TX throws out - or are you mistaken?
Jobs are coming back to the US, for a variety of reasons. As the global economy equalizes, profits from foreign countries decrease. Having worked with India, with highly skilled mass manufacturing in Mumbai, if we had a production issue, we lost 8 hours of production in India, then due to time differences and root cause analysis, solutions analysis, verification/validation and implementation, plus time differences - we often lost at LEAST a full two days production. If the same thing had happened in the US, the labor cost would be measured in hours, not days.
Add in shipping, taxes, rising costs due to changing world economies, robotics and the technology required to sustain these robotics - things are changing.

Most of the world views American workers as being sloppy, lazy and stupid. Most of the world views American manufacturing as not having any QC. I can see moving manufacturing to Mexico or Canada. If it is manufactured in the United States, people won't want to buy it.

 

[Hodar1]

I bet factories nationwide will be delayed opening at least another week, if not until March. It is a brutal reality for all Chinese manufacturing, but better safe than sorry. Hopefully we are reaching peak infections this week, with a steep drop-off coming because of precautions.

What is NOT being talked about, is the nature of the virus. The Corona virus is NOT new, this strain (or mutation) is new; but we have known about the original Corona virus since the 1960's. Up until recently, we knew of 5 different strains, common around the world. Animals and humans can share this virus. This one, is particularily nasty. Chinese reports have leaked out showing exponentially worse scenarios than previously shown.

But, here is the nasty part. It's contageious from 1-11 days BEFORE the patient is symptomatic. By the time the patient shows signs of being sick, he has been spreading the virus for over a week, and those people are spreading it. A person sneezes or coughs on an aircraft, and the virus is airborne. Say it doesn't land in your eye, or get sucked into your lungs - but decides to hang out in the aircraft's ventilation system for a few hours, days, weeks or years. See the problem?
[automerge]1581189067[/automerge]

Most of the world views American workers as being sloppy, lazy and stupid. Most of the world views American manufacturing as not having any QC. I can see moving manufacturing to Mexico or Canada. If it is manufactured in the United States, people won't want to buy it.

Seems like a 50+ year old Quality World view, and most of the companies that embraced that view, are no longer in business (Admiral, Quasar, Pontiac, etc). Today, Six Sigma Quality standards are employed at practically every manufacturing center, without regard to size. IPC Soldering standards are mandatory at every place that does business in electronics - if they even hope to ship for commercial, international or federal contracts.

I doubt you an find a semiconductor manufacturer in the USA that does not do Burn-In, HAST at a minimum on preproduction lots, and has a published Qualification standard that meets or exceeds Six Sigma lot sampling requirements.

HP, Dell, Tesla and a lot of other USA manufacturer's seem to be doing pretty well.

 

[AlanShutko]

I don't know if they've figured out how long the virus lasts outside the body, but it probably can't hang out in ventilation systems for weeks. Cold viruses can survive on surfaces for about seven days. Now that I'm thinking about that, that's still a crazy long time that could infect tons of people. I was thinking before of the flu virus, which only lasts a day. No wonder the Chinese authorities were worried about central air at the factories.

 

[citysnaps]

Not diversifying manufacturing makes Tim Cook incompetent compared to Elon Musk's manufacturing per continent model.

No, but your post makes you ill-informed with respect to manufacturing.

 

[HQuest]

I’m sure an iPhone with the “Made in USA” would appeal to a large sum of Americans willing to perhaps pay a small price increase on a product made in the country.

The rest of the world, however, would care less if the phone is Made in USA, in Mexico, in Germany, China or India. They are way more interested in the unit price than where it is made. And the rest of the world is also responsible for a very large sum of the profits generated by the iPhone.

Except such profits of a “Made in USA” iPhone would be much smaller, as US labor is way more costly than other regions, so even if the diversification of manufacturing that Apple has been talking (and perhaps already working at) brings a phone assembly line to the US, it will be a minor operation.

It is one thing to build a set of, let’s say, injection molded products by resorting to a lot of automation and skilled workers to oversee the automation (electricity costs favors the US over other countries), but any labor intensive work as a phone assembly would never favor the US. Even the $10/h minimum wage adds up quite a bit when you have the same work done for under a dollar elsewhere.

 

[Hodar1]

This makes sense. It hasn't been sounding from the news reports that things are coming under control. From what I heard, Hong Kong just closed their border to Chinese arrivals.

I have a BTO MBP order in. The delivery date hasn't slipped yet, but I'm sure it will.



For the build quality, many people argue they are.

And yet, Consumer Reports lists the Tesla Model S among the top 10 Luxury sedans, competing against BMW, Lexus, Audi and Porsche. As I said before, anyone who knows anything about mass production, knows that you either move forward with constant improvement - or you die.

 

[Dezmond]

I'd rather have delayed new phones than Apple forcing people to work in these kinds of conditions. Glad they care about worker's welfare.

 

[MRrainer]

China's health system is already strained beyond its capacity they - need to fend-off infections at any cost.

 

[DotCom2]

The stock (AAPL) will dip on Monday. BUY!

 

[julesme]

If the iPhone were to be made in the US it would be designed differently so as to not need human labor. It would likely turn out to be heavier and thicker but the parts would be designed to "self align" and "click" in place and not depend on any tiny screws. The cost could be about the same.

When you design a part of any kind you think about how it will be made. You design very differently if that art is made by hand or if it is CNC's metal or it it is going to be 3D printed. You don't design things in a vacuum

But moving production to the US would not create any jobs. These robot factories tend to not have many humans inside. Look at the photo below of a robot factory and you can count the number of humans on your thumbs (don't need to use fingers) This is the way to move production to US. (Funy is that this car factory is in China)

View attachment 893180

"But moving production to the US would not create any jobs."

This is factually incorrect. Some jobs would be created if factory production were moved back to the US, just not as many jobs as you or I would like.

 

[Hodar1]

I’m sure an iPhone with the “Made in USA” would appeal to a large sum of Americans willing to perhaps pay a small price increase on a product made in the country.

The rest of the world, however, would care less if the phone is Made in USA, in Mexico, in Germany, China or India. They are way more interested in the unit price than where it is made. And the rest of the world is also responsible for a very large sum of the profits generated by the iPhone.

Except such profits of a “Made in USA” iPhone would be much smaller, as US labor is way more costly than other regions, so even if the diversification of manufacturing that Apple has been talking (and perhaps already working at) brings a phone assembly line to the US, it will be a minor operation.

It is one thing to build a set of, let’s say, injection molded products by resorting to a lot of automation and skilled workers to oversee the automation (electricity costs favors the US over other countries), but any labor intensive work as a phone assembly would never favor the US. Even the $10/h minimum wage adds up quite a bit when you have the same work done for under a dollar elsewhere.

I agree that many people (myself included) don't care as much about about where it's built, as we do about overall value (cost vs quality vs features vs dependability). I think everyone has been screwed at least once, on a product that was expensive, and either didn't last, or was shoddily constructed. It angers the consumer.

What I expect to happen, is AI to be used to assemble components, smarter construction steps, perhaps metal 3D printing, in large scale production.

 

[mi7chy]

"But moving production to the US would not create any jobs."

This is factually incorrect. Some jobs would be created if factory production were moved back to the US, just not as many jobs as you or I would like.

Correct. It may not increase assembly line jobs but staff are needed to install the robots, maintain and repair them, manage the facility, R&D software and hardware upgrades, etc.