Updated: December 24, 2020 7:19:19 am
Men wearing protective masks walk past the broken windows of a facility run by Wistron Corp, a Taiwanese Apple maker, in Narsapura, near Bangalore, India, on December 14, 2020 (Reuters Photo).
Worker unrest after failure to repair pay and overtime issues at a new factory for Wistron Infocomm Manufacturing India Pvt Ltd, a subsidiary of Wistron Corporation, the Taiwan-based computer and computer peripherals company that makes iPhones for Apple and other products. resulted in a riot at the plant on December 12.
Production at the Narasapura plant in Kolar district, some 60 km from Bengaluru, which employs 1,343 regular workers and 8,490 contract workers, was suspended in the wake of the violence.
Wistron’s investment
Wistron, which manufactures peripheral devices and systems for the world’s leading technology companies, has manufacturing facilities and R&D centers in two dozen locations around the world. The company launched a small pilot plant in Bengaluru in 2017 to make the iPhone, and in 2018 decided to invest heavily in Karnataka for a complete plant.
Wistron Infocomm Manufacturing India Pvt Ltd was incorporated on February 18, 2018 with the pilot plant at Peenya Industrial Estate in Bengaluru as its official address. Initially, the company supplied the iPhone SE and 6s from the Peenya facility. In January 2019, Wistron announced that it was looking to invest up to Rs 3,000 crore in its Indian subsidiary.
“Given the consideration of the long-term development of Wistron Group in India, the company subsidiary Wistron InfoComm Manufacturing (India) Private Limited has raised its authorized capital to INR 30 billion at a time,” the firm said in a statement to Taiwan stock exchange in January 2019.
The Karnataka government allocated 43 acres in Narasapura for Wistron to build a larger plant. The company obtained environmental clearance in mid-2019 and in 2020 announced investments amounting to Rs 1,220 million in equipment and machinery for the Kolar plant, which is designated as a manufacturing and service center. In August 2020, the plant became fully operational, with around 5,000 employees to manufacture the iPhone SE (2020) and iPhone 7 models.
That same month, Wistron said it “intends to construct a factory building” at a cost of Rs 550 crore, including a Rs 250 crore civil construction contract on an expansion of its Narasapura facility. According to Karnataka government officials, the company has sought more land near its current plant. “They wanted to expand, but now we have to see their plans revised [after the December 12 incident]. We had previously identified another 65 acres because they wanted to increase the built-up area, ”said a senior government official.
‘Running a maquiladora’
According to investigations by the police, unions and the state government, a pressure cooker situation had been created at the factory due to anomalies in the wage payment system after Wistron rapidly increased its workforce of contract employees from around 3,000 to almost 8,500 between September. 2020 and December 2020.
“They grew very fast. This facility became operational only in August. Before August, the plant did not exist. All the recruiting has happened in the last three or four months. They sought the initial permit for 5,000 people and then upgraded to 9,000 at their level. Perhaps there was more demand. That’s when they went from eight to 12 hour shifts, ”said Gaurav Gupta, chief secretary of the department of commerce and industries in Karnataka.
The hired employees were hired and paid through six labor supply contractors, but their work was supervised and managed by Wistron officials. “In two months we contributed 2,300 workers to the firm; nearly 1,600 were young people from Kolar herself, ”said AN Srinivas, a recruiter for Creative Engineers, a local labor contractor.
Initial police investigations have revealed that the contractors were not paying workers their full wages under their contracts, or for overtime. “The factory was working like a maquiladora,” said police sources. While wages were slashed from Rs 22,000 to Rs 8,000 in some cases, November wages were not paid until December 12, the hired employees said. Workers worked two mandatory 12-hour shifts. Without an employee complaint redress system in the company or in a union, workers were constantly asking company officials for their dues, the Central Council of Trade Unions of India said in a report.
A labor department official said the trigger for the violence during a 6 a.m. shift change on December 12 was a discussion about the attendance system not capturing the exact hours of work recorded by workers. Wistron officials initially estimated the damage at Rs 437 crore, but later revised it down to approximately Rs 43 crore saying that “the violence did not cause any material damage to major manufacturing and warehouse equipment.”
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Wistron, Apple reaction
Wistron has sent audit teams to estimate the damage, see how quickly the factory can be restored, and understand the loopholes in the payment system. “They have done their internal audit and I think they will take corrective action,” said the secretary of Gupta Industries.
Wistron has acknowledged that there were problems: “… We have been investigating and have discovered that some workers did not receive the correct or punctual payment. We deeply regret this and we apologize to all of our workers, ”he said.
“… We recognize that we made mistakes as we expand. Some of the processes … for managing labor agencies and payments need to be strengthened and improved. We are taking immediate action to correct this, including disciplinary action. “
Apple has put Wistron on probation and said the company will not receive further orders until it fixes the problems. “… 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 your progress, ”Apple said.
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