iPhone Maker Foxconn Makes Masks For Chinese Employees, Forces Them To Return To Work

Electronics manufacturer Hon Hai Precision Co. Ltd. HNHPF, better known as Foxconn, is making its own line of surgical masks as it seeks to restart production in China.

What Happened

Foxconn has been running test production of the masks at its Lunghua manufacturing centre since February 5, it said in a WeChat post Thursday, according to the Nikkei Asian Review.

The manufacturing giant now awaits quality approval as it plans to produce up to 2 million units per day by the end of this month, the Nikkei noted.

The masks would initially be made available for Foxconn employees, but it didn't rule out exporting them at a later stage.

Chinese authorities are requiring businesses to guarantee that they have enough protective gear for workers before they can restart production as the novel coronavirus continues to spread, a person familiar with the matter told the Nikkei.

Foxconn is taking "many proactive measures," including making the masks, to make a convincing case, the source said.

The company is also asking hundreds of its Taiwanese employees to return to work in China before February 10, who left for the Lunar New Year holiday, but stayed longer due to the outbreak, the Nikkei reported.

Taiwan has banned all travel from mainland China and advised its citizens not to travel to China.

Foxconn is asking employees to sign "self-declaration forms" before their travel, that asks them to tick boxes saying they have completed a prevention training session and that their family agrees with them taking the trip, internal documents by the Nikkei showed.

Why It Matters

Foxconn is best known for manufacturing Apple Inc. AAPL products including the iPhone and the iPad, but also makes products for other tech companies worldwide.

Some of the other products manufactured by Foxconn including Amazon.com Inc.'s AMZN Kindle, Nintendo Co., Ltd.'s NTDOY 3DS model, and Microsoft Corporation's MSFT PlayStation devices.

Foxconn halting production means not just loss of business for the company, but impacts all its partners.

At the same time, the coronavirus continues to spread with 31, 161 confirmed cases and at least 636 deaths reported.

The restarting of production puts employees at the risk of getting infected, while they're saying that they don't have a choice when it comes to getting back at work.

"Who dares not to sign this form? I feel like I am being forced to return to an epidemic area and risk my own health," a Foxconn employee told the Nikkei.

Apple and Foxconn were previously found to be in violation of the Chinese labor laws at the latter's Zhengzhou factory August last year, the Business Insider reported.

Price Action

Foxconn's shares traded 0.32% lower at $2.04 (TWD 61.40) in Taipei at press time on Friday. The shares closed 2.17% higher at $5.66 in the OTC market on Thursday.