Wistron Corp is the main iPhone assembler of Apple Inc. in India.
Highlight
- Wistron Corp is the main iPhone assembler of Apple Inc. in India
- Hundreds of workers razed his plant near Bangalore this month
- Apple will continue to monitor Wistron’s progress on corrective action
Wistron Corp., Apple Inc.’s top iPhone assembler in India, fell as much as 4% after the US tech giant put it on probation for flaws in labor practices that sparked a riot.
Apple said its preliminary investigations found that the Taiwanese supplier, the first to produce the American company’s marquee device from India, failed to implement proper work-hour management processes for a rapidly growing staff. That delayed paying some employees in October and November, and Apple said it is now holding onto new business until Wistron fixes the problems.
Hundreds of workers rampaged through Wistron’s plant in Narasapura near Bengaluru this month, damaging property and looting thousands of iPhones and laptops, according to local media. That highlighted the challenges Apple faces as it tries to diversify its huge production base for everything from iPhones to Macs outside of China due to Trump-era trade and political sanctions. The conflict also affects Prime Minister Narendra Modi’s attempt to attract foreign investors for his flagship “Make in India” project, especially companies looking to leave the world’s second largest economy.
“Wistron has taken disciplinary action and is restructuring its hiring and payroll teams in Narasapura,” Apple said in a statement over the weekend. “We have placed Wistron on probation and they will not receive any new business from Apple before completing corrective actions. Apple employees, along with independent auditors, will monitor their progress.”
The Taiwanese company said it removed the vice president overseeing operations in India and opened a hotline for workers to voice their concerns anonymously.
Wistron had quadrupled workers at that India plant for roughly eight months, increasing production just as the world’s most valuable company began direct online sales in the South Asian nation. But its systems weren’t robust enough to handle the flood, people familiar with the matter have said.
The incident could now affect the relationship with Apple, which has shown a greater willingness to crack down on violations at its hundreds of suppliers. The US giant and its production partners have been criticized in the past for allowing poor working conditions in China. Last month, Apple suspended new business with Wistron’s biggest rival, Pegatron Corp., after discovering violations in a student worker program.
Wistron has estimated the damages to amount to NT $ 200 million ($ 7.1 million) and said it is doing everything it can to resume operations at the factory. The Hsinchu-based company has also said that the protesters are not its own workers, suggesting that they may have been hired by employment agencies, although it is unclear who is responsible for paying them.
“This is a new facility and we recognize that we made mistakes as we expanded,” the Taiwanese company said in a statement on Saturday. “We are deeply committed to our business and our employees in India. We are working diligently on corrective actions to ensure this does not happen again.”
(Except for the headline, this story has not been edited by NDTV staff and is posted from a syndicated feed.)
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