Bloomberg News

Foxconn Shuts Plant as Workers Injured, Arrested in Brawl

September 24, 2012

Foxconn Shuts China Plant After Fight Brought Under Control

Foxconn Technology Group employs more than 1.3 million people to make devices for global clients including Apple Inc., Sony Corp., Hewlett-Packard Co. and Cisco Systems Inc. Source: AFP via Getty Images

Foxconn Technology Group shut a factory at Taiyuan in China’s Shanxi province after a fight broke out among as many as 2,000 workers which left 40 people hospitalized and some employees arrested.

“We want to give people time to cool down,” Louis Woo, spokesman for Taipei-based Foxconn said by phone. Chairman Terry Gou was informed of the incident at about 5 a.m. and agreed with the decision to halt production. Woo declined to say whether parts for Apple Inc. (AAPL:US)’s iPhone 5 are made at the factory, which employs 79,000 people and makes electronics, components, and precision molding for devices including mobile phones.

A fight between rival worker groups at a dormitory operated by an outside company broke out at about 11 p.m. last night and escalated before security and police brought the situation under control by about 3 a.m., Woo said. Some workers were arrested, he said without providing details.

“The impact on production should be minor and the lost manufacturing could be made up with overtime,” said Vincent Chen, an analyst at Yuanta Financial Holding Co., the top-rated analyst covering Foxconn flagship Hon Hai Precision Industry Co. and who rates the stock hold, according to data compiled by Bloomberg. “The China government could step in to ensure continued operations if it’s just an issue between workers rather than about conditions.”

Chen, based in Taipei, estimates Apple products have little manufacturing exposure at the factory and is likely the location for producing other devices such as Nintendo Co.’s Wii.

The cause of the fight was not immediately clear, while Foxconn is assisting a police investigation of the matter, Woo said. Union representatives will be sent to the site today to discuss the situation with workers, he said.

Gou, who founded the maker of iPhones, Sony Corp. PlayStations and Hewlett-Packard Co. (HPQ:US) computers in 1974, has expanded manufacturing operations beyond its Shenzhen, south China base to include inland China as well as Brazil, Mexico and Vietnam.

To contact the reporter on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net.

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net.


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