The Wistron factory in Narsapura, about 60 km from Bangalore, on December 13th.
Photographer: Manjunath Kiran / AFP / Getty Images
Photographer: Manjunath Kiran / AFP / Getty Images
Wistron Corp., Apple Inc.’s leading iPhone assembler in India it fell to 4% after the US tech giant released him on bail for work-related lapse that sparked a riot.
Apple said that in its preliminary investigations it was found that the Taiwanese supplier (the first to produce the US company’s marquee device in India) did not implement proper working hours management processes for a rapidly growing staff. This delayed payment to some employees in October and November and Apple said it is now holding back a new business until Wistron fixes the issues.
Hundreds of workers swept through the Wistron plant in Narasapura, near Bengaluru, this month, causing property damage and looting thousands of iPhones and laptops, according to local media. This highlighted the challenges Apple faces in trying to diversify its huge production base, from iPhones to Macs far removed from China due to Trump-era trade and political sanctions. The dispute also contrasts Prime Minister Narendra Modi’s attempt to attract foreign investors for his flagship project “Make in India”, especially companies that want to leave the world’s No. 2 economy.
“Wistron has taken disciplinary action and is restructuring its recruitment and payroll teams in Narasapura,” Apple said in a statement over the weekend. “We have released Wistron on probation and will not receive any new business from Apple until they have completed the corrective actions. Apple employees, along with independent auditors, will monitor their progress.”
Read more: Apple vendor Riot-Hit hired more than it could handle in India
The Taiwanese company said it removed the vice president who oversaw operations in India and started a phone line for workers to express their concerns anonymously.
Wistron had quadrupled the workers at that Indian plant for about eight months, increasing production just as the world’s most valuable company began selling directly online to the South Asian nation. But their systems were not 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 curb violations by its hundreds of suppliers. The American giant and its production partners have been criticized in the past for allowing poor working conditions in China. Last month, Apple suspended a new deal with Wistron’s biggest rival, Pegatron Corp., after discovering infractions in a student worker program.
Wistron has estimated the damage at up to $ 200 million ($ 7.1 million) and said he is doing his best to resume operations at the factory. The Hsinchu-based company has also said the protesters are not their own workers, suggesting 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 employees in India. We are working diligently on corrective actions to ensure that this does not happen again.
Read more: Apple Push Into India caused a setback when the protest turned violent