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Luxshare is aggressively trying to break into the iPhone supply chain, but its pace may be temporarily blocked. The reason is that the Luxshare factory in Bac Giang, Vietnam recently reported that 5,000 employees went on strike. The complaint was that Luxshare had failed to pay the wages, overtime, benefits and vacations owed. In addition, the staff dormitory shortage highlighted. There are still many problems related to the work environment in Luxshare Vietnam. This also makes Apple doubt whether Luxshare Vietnam can meet the iPhone production conditions, thus delaying the iPhone joint production project.
Lixun’s Apple business was originally based on AirPods, but has recently been very active in entering the iPhone supply chain, such as the iPhone assembly plant in Kunshan held by Wistron for $ 472 million recently; And now, Lixun also wants Apple to strive to assemble the iPhone in its Vietnam factory.
According to a Vietnam Investment Review (VIR) report from foreign media, Lixun’s foreign business manager Tang Due Bang said Apple representatives visited the Lixun factory in Vietnam in the summer to investigate the construction, scale, equipment and factory financing to ensure compliance. Apple conditions for iPhone production.
Currently, Luxshare has invested $ 270 million in a factory in Beijiang City, Vietnam, with about 27,000 employees. However, to meet the production needs of the iPhone, the number of employees may need to increase to around 50,000-60,000.
However, the VIR report noted that although Apple representatives expressed appreciation for the speed of construction of the factory and the potential for local workforce after visiting the Luxshare Vietnam factory, they still stated that the factory was not in compliance with iPhone production standards because there was not enough bedroom supply. Workers use it, for this reason Luxshare has also bought two lots outside the factory to build more bedrooms. To produce iPhones, you have to wait for the new bedroom to be completed before Apple evaluates it again.
In addition to the lack of bedrooms, the recent employee strike may also be one of the factors that Apple has delayed the production of iPhones in Luxshare Vietnam. The Vietnamese Youth Daily (tuoi tre news) recently reported that a large-scale employee protest occurred at the Luxshare factory in Vietnam; protests the fact that Luxshare honestly failed to provide overtime, hazard pay, wages, benefits due, and annual leave during the epidemic. Following the protests, Luxshare made three consecutive announcements, promising to truthfully review and pay wages, accurately record employees’ actual working hours and implement the annual leave policy, and indeed issue bonuses, risk allowances, meal allowances and maternity allowances.
Although Luxshare is attacking the iPhone assembly market very aggressively, the two incidents of insufficient bedrooms and employee strikes highlight that Luxshare Vietnam still has many problems in the work environment; this also shows that Luxshare has not yet satisfied Apple’s production. There is still a long way to go for the iPhone standard to enter the iPhone manufacturing chain, and workers and the work environment may be challenges that must first be overcome.
(Source of the first image: Luxshare)
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