Apple places Wistron on probation following last week’s riot
Putting Wistron on probation and not allowing it to receive new business from Apple for the moment is a major setback for the contract assembler since it was supposed to get the job to assemble another iPhone model in India. Wistron was planning to hire another 20,000 workers over the course of the upcoming year. Karnataka state officials investigated the factory after the riot and found that the Wistron facility broke several laws in an attempt to add more workers. The investigation found that the number of workers at the factory rose quickly from 5,000 to 10,500. The report accused Wistron of underpaying contract workers and housekeeping staff, and forcing female employees to work overtime without legal authorization.
Wistron was the first contract manufacturer to assemble iPhone models in India back in 2017. Foxconn also produces iPhone models in the country and Pegatron will soon follow. In a statement, Apple said, “Our main objective is to make sure all the workers are treated with dignity and respect, and fully compensated promptly.” Wistron is setting up 24 hour hotlines that will accept anonymous complaints. In a statement of its own, the company said, “This is a new facility and we recognize that we made mistakes as we expanded. Some of the processes we put in place to manage labor agencies and payments need to be strengthened and upgraded.”
Neil Shah of Hong Kong-based Counterpoint research stated, “Apple has sent a strong message to its suppliers, telling them unequivocally that they need to adhere to its standards. In the long-run it should make suppliers more cautious and likely create fewer such public-relations headaches for Apple.”
Apple’s response to Wistron’s treatment of its employees can hurt the supplier’s plan to invest as much as 13 billion rupees ($177 million) over the next five years as part of New Delhi’s production linked plan to manufacture smartphones in the country.