Apple Inc.’s (NASDAQ:AAPL) iPhone manufacturer, Foxconn’s (Zhengzhou, China, factory) management has publicly apologized for sending incorrect messages about delayed bonus payments. A technical glitch in the pay-related system for newly hired workers alarmed the already disgruntled employees, who have been protesting the stringent factory standards for days. At such a time, Foxconn’s internal employee issues could endanger Apple’s production and shipment processes.
Addressing the issue, Foxconn said, “Our team has been looking into the matter and discovered a technical error occurred during the onboarding process.” It further added, “We apologize for an input error in the computer system and guarantee that the actual pay is the same as agreed and the official recruitment posters.”
On Wednesday, Foxconn faced exorbitant labor unrest, as videos of workers wrecking the property and security cameras were doing the round. In order to prevent exposure to the COVID-19-affected population, Foxconn is pressuring staff to remain on the premises with limited food supply.
Apple Paying for Foxconn’s Failures
A mass exodus of employees threatens to hinder Foxconn’s iPhone manufacturing processes, hurting the American tech giant’s sales. Foxconn is the largest iPhone manufacturer and also accounts for over 70% of iPhone shipments worldwide.
In response to the unrest, Apple said that it had ground staff at the Zhengzhou plant and was “working closely with Foxconn to ensure their employees’ concerns are addressed.” Apple’s heavy reliance on the Chinese company’s manufacturing processes amidst the growing U.S.-China trade tensions puts further pressure on the tech giant to shift its base elsewhere.
Is Apple a Buy or Sell?
With 24 Buys and four Holds, Apple stock commands a Strong Buy consensus rating. On TipRanks, the average Apple price forecast of $180.48 implies 19.5% upside potential to current levels. Meanwhile, AAPL stock has lost 16.5% so far this year.
