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World

France hit by new wave of strikes against Macron’s pension reform

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  • Reform would raise retirement age to 64
  • Schools, transport networks, refinery deliveries hit
  • Macron: Reform vital to ensure viability of pension system

SAINT-NAZAIRE, France, Jan 31 (Reuters) – Striking workers disrupted French refinery deliveries, public transport and schools on Tuesday in a second day of nationwide protests over President Emmanuel Macron’s plan to make people work longer before retirement.

Crowds marched through cities across France to denounce a reform that raises the retirement age by two years to 64 and which is a test of Macron’s ability to push through change now that he has lost his working majority in parliament.

On the rail networks, only one in every three high-speed TGV trains were operating and even fewer local and regional trains. Services on the Paris metro were thrown into disarray.

Buoyed by their success earlier in the month when more than a million people took to the streets, trade unions which have been battling to maintain their power and influence urged the public to turnout en masse.

“We won’t drive until we’re 64!” bus driver Isabelle Texier said at a protest in Saint-Nazaire on the Atlantic coast, adding that many careers involved tough working conditions.

Others felt resigned ahead of likely bargaining between Macron’s ruling alliance and conservative opponents who are more open to pension reform than the left.

“There’s no point in going on strike. This bill will be adopted in any case,” said 34-year-old Matthieu Jacquot, who works in the luxury sector.

Unions said half of primary school teachers had walked off the job. TotalEnergies (TTEF.PA) said 55% of its workers on morning shifts at its refineries had downed tools, a lower number than on Jan. 19. The hard-left CGT union said the figure was inaccurate.

For unions, the challenge will be maintaining a strike movement at a time when high inflation is eroding salaries.

At a local level, some announced “Robin Hood” operations unauthorised by the government. In the southwestern Lot-et-Garonne area, the local CGT trade union branch cut power to several speed cameras and disabled smart power meters.

“When there is such a massive opposition, it would be dangerous for the government not to listen,” said Mylene Jacquot, secretary general of the CFDT union’s civil servants branch.

[1/16] Protesters attend a demonstration against French government’s pension reform plan in Paris as part of a day of national strike and protests in France, January 31, 2023. REUTERS/Gonzalo Fuentes

Opinion polls show a substantial majority of the French oppose the reform, but Macron intends to stand his ground. The reform was “vital” to ensure the viability of the pension system, he said on Monday.

A street march in Paris takes place later in the day.

‘BRUTAL’

The pension system reform would yield an additional 17.7 billion euros ($19.18 billion) in annual pension contributions, according to Labour Ministry estimates.

Unions say there are other ways to raise revenue, such as taxing the super rich or asking employers or well-off pensioners to contribute more.

“This reform is unfair and brutal,” said Luc Farre, the secretary general of the civil servants’ UNSA union. “Moving (the pension age) to 64 is going backwards, socially.”

French power supply was down by 4.5% or 3 gigawatts (GW), as workers at nuclear reactors and thermal plants joined the strike, data from utility group EDF (EDF.PA) showed.

TotalEnergies said deliveries of petroleum products from its French sites had been halted because of the strike, but that customers’ needs were met.

The government made some concessions while drafting the legislation. Macron had originally wanted the retirement age to be set at 65, while the government is also promising a minimum pension of 1,200 euros a month.

Prime Minister Elisabeth Borne has said the 64 threshold is “non-negotiable”, but the government is exploring ways to offset some of the impact, particularly on women.

Hard-left opposition figure Jean-Luc Melenchon, a vocal critic of the reform, said parliament would on Monday debate a motion calling for a referendum on the matter.

“The French are not stupid,” he said at a march in Marseille. “If this reform is vital, it should be possible to convince the people.”

Reporting by Forrest Crellin, Benjamin Mallet, Sudip Kar-Gupta, Leigh Thomas, Blandine Henault, Michel Rose, Dominique Vidalon, Benoit Van Overstraeten; Writing by Ingrid Melander and Richard Lough; Editing by Janet Lawrence

Our Standards: The Thomson Reuters Trust Principles.

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Business

Musk expected to take stand as trial resumes over Tesla tweet

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SAN FRANCISCO Jan 20 (Reuters) – Elon Musk, Tesla Inc’s (TSLA.O) chief executive, is likely to be called to testify on Friday in a jury trial over his 2018 Twitter post that he had “funding secured” to take the electric carmaker private, which shareholders allege cost them millions in trading losses.

The class action trial in San Francisco federal court resumed with investor Timothy Fries telling the jury how he lost $5,000 buying Tesla stock after Musk sent the tweet at the center of the lawsuit.

Musk, known for combative testimony, is expected to address why he has insisted he had Saudi investor backing for the deal, which never came together, and whether he knowingly made a materially misleading statement with his tweet.

The case is a rare securities class action trial and the plaintiffs have already cleared high legal hurdles, with U.S. Judge Edward Chen ruling last year that Musk’s post was untruthful and reckless.

Shareholders alleged that Musk lied when he sent the tweet, costing investors.

Fries told the jury that funding secured meant to him that “there had been some vetting, some critical review of those funding sources.”

Musk’s attorney, Alex Spiro, told the jury in his opening statement Wednesday that Musk believed he had financing from Saudi backers and was taking steps to make the deal happen. Fearing leaks to the media, Musk tried to protect the “everyday shareholder” by sending the tweet, which contained “technical inaccuracies,” Spiro said.

Guhan Subramanian, a Harvard Law School professor, told the jury that Musk’s behavior in 2018 lacked the hallmarks of traditional corporate dealmaking by tweeting his interest in Tesla without proper financial or legal analysis.

“Compared to the standard template it’s an extreme outlier,” said Subramanian, who called Musk’s approach “unprecedented” and “incoherent.”

A jury of nine will decide whether the tweet artificially inflated Tesla’s share price by playing up the status of funding for the deal, and if so, by how much.

The defendants include current and former Tesla directors, whom Spiro said had “pure” motives in their response to Musk’s plan.

Reporting by Tom Hals in Wilmington, Del., and Jody Godoy in San Francisco; Editing by Noeleen Walder, Peter Henderson, Matthew Lewis and Daniel Wallis

Our Standards: The Thomson Reuters Trust Principles.

Jody Godoy

Thomson Reuters

Jody Godoy reports on banking and securities law. Reach her at jody.godoy@thomsonreuters.com

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Business

Twitter’s laid-off workers cannot pursue claims via class-action lawsuit-judge

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Jan 14 (Reuters) – Twitter Inc has secured a ruling allowing the social media company to force several laid-off workers suing over their termination to pursue their claims via individual arbitration than a class-action lawsuit.

U.S. District Judge James Donato on Friday ruled that five former Twitter employees pursuing a proposed class action accusing the company of failing to give adequate notice before laying them off after its acquisition by Elon Musk must pursue their claims in private arbitration.

Donato granted Twitter’s request to force the five ex-employees to pursue their claims individually, citing agreements they signed with the company.

Twitter did not immediately respond to a request for comment.

The San Francisco judge left for another day “as warranted by developments in the case” whether the entire class action lawsuit must be dismissed, though, as he noted three other former Twitter employees who alleged they had opted out of the company’s arbitration agreement have joined the lawsuit after it was first filed.

The lawyer who represents the plaintiffs, Shannon Liss-Riordan, said on Monday that she had already filed 300 demands for arbitration on behalf of former Twitter employees and would likely file hundreds more.

Those workers all claim they have not received the full severance package promised by Twitter before Musk took over. Some have also alleged sex or disability discrimination.

Last year, Donato had ruled that Twitter must notify the thousands of workers who were laid off after its acquisition by Musk following a proposed class action accusing the company of failing to give adequate notice before terminating them.

The judge said that before asking workers to sign severance agreements waiving their ability to sue the company, Twitter must give them “a succinct and plainly worded notice”.

Twitter laid off roughly 3,700 employees in early November in a cost-cutting measure by Musk, and hundreds more subsequently resigned.

In December last year, Twitter was also accused by dozens of former employees of various legal violations stemming from Musk’s takeover of the company, including targeting women for layoffs and failing to pay promised severance.

Twitter is also facing at least three complaints filed with a U.S. labor board claiming workers were fired for criticizing the company, attempting to organize a strike, and other conduct protected by federal labor law.

Reporting by Mrinmay Dey in Bengaluru, Nate Raymond in Boston, and Daniel Wiessner in Albany, New York, Editing by Angus MacSwan and Deepa Babington

Our Standards: The Thomson Reuters Trust Principles.

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World

Macron, unions head for French pension reform showdown

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  • Retirement age set to be raised to 64 from 62
  • Unions, left-wing opposition reject the reform
  • Adoption in parliament depends on the right

PARIS, Jan 10 (Reuters) – The French should work two years longer to age 64 before retiring, the government said on Tuesday, announcing an unpopular pension system overhaul that immediately prompted unions to call for strikes and protests.

The right to retire at a relatively young age is deeply cherished in France and the reform will be a major test of President Emmanuel Macron’s ability to deliver change as social discontent mounts over the cost of living.

The reform’s passage through parliament will not be easy. Macron’s government says it is vital to keep the pension budget out of the red. Unions argue the reform is unfair and unnecessary.

“Nothing justifies such a brutal reform,” Laurent Berger, leader of the moderate, reform-minded CFDT union, told reporters after trade union leaders agreed on a nationwide strike for Jan. 19, which will kick off a series of strikes and protests.

An Odoxa poll showed four out of five citizens oppose the higher retirement age.

“I’m well aware that changing our pension system raises questions and fears among the French,” Prime Minister Elisabeth Borne had told a news conference shortly before.

“We offer today a project to balance our pension system, a project that is fair,” she said, adding that France had to face reality.

Overhauling the pension system was a central pillar of Macron’s reformist agenda when he entered the Elysee Palace in 2017. But he shelved his first attempt in 2020 as the government battled to contain COVID-19.

The second attempt will not be any easier.

“It’s one slap in the face after another,” said 56-year-old Frederic Perdriel during a small protest in the western city of Rennes ahead of Borne’s announcement. “There are other ways to finance pensions than raising the retirement age.”

“BRUTAL, CRUEL”

Macron and Borne will need to win support among conservative Les Republicains (LR) lawmakers in the coming months to pass the reform in parliament.

That looks less challenging than it did a few weeks ago after concessions on the retirement age – Macron had originally wanted it to be 65 – and a minimum pension.

Olivier Marleix, who leads the LR group in the lower house of parliament, reacted positively to Borne’s announcements.

“They heard us,” he said, while asking for more efforts to ensure employment for people close to retirement age.

Even so, LR is divided on the issue, so every vote counts.

The Socialists, the hard-left La France Insoumise (France Unbowed) and the far-right’s National Rally were swift to denounce the reform. Left-wing lawmaker Mathilde Panot branded the plan “archaic, unfair, brutal, cruel.”

“The French can count on our determination to block this unfair reform,” the far-right’s Marine Le Pen said.

Under the government plan, the retirement age will be raised by three months per year from September, reaching the target age of 64 in 2030.

From 2027, eight years earlier than planned in past reforms, it will be necessary to have worked 43 years to receive a full pension.

Other measures aim to boost the employment rate among 60 to 64-year-olds, which is one of the lowest among leading industrialised nations.

With one of the lowest retirement ages in the industrialised world, France also spends more than most countries on pensions at nearly 14% of economic output, according to the Organisation for Economic Cooperation and Development.

Reporting by Elizabeth Pineau, Leigh Thomas, Stephane Mahe, Tassilo Hummel, Blandine Henault; writing by Ingrid Melander; editing by Richard Lough, Alexandra Hudson and Josie Kao

Our Standards: The Thomson Reuters Trust Principles.

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Business

Facebook parent Meta to settle Cambridge Analytica case for $725 million

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Dec 23 (Reuters) – Facebook owner Meta Platforms Inc (META.O) has agreed to pay $725 million to resolve a class-action lawsuit accusing the social media giant of allowing third parties, including Cambridge Analytica, to access users’ personal information.

The proposed settlement, which was disclosed in a court filing late on Thursday, would resolve a long-running lawsuit prompted by revelations in 2018 that Facebook had allowed the British political consulting firm Cambridge Analytica to access data of as many as 87 million users.

Lawyers for the plaintiffs called the proposed settlement the largest to ever be achieved in a U.S. data privacy class action and the most that Meta has ever paid to resolve a class action lawsuit.

“This historic settlement will provide meaningful relief to the class in this complex and novel privacy case,” the lead lawyers for the plaintiffs, Derek Loeser and Lesley Weaver, said in a joint statement.

Meta did not admit wrongdoing as part of the settlement, which is subject to the approval of a federal judge in San Francisco. The company said in a statement settling was “in the best interest of our community and shareholders.”

“Over the last three years we revamped our approach to privacy and implemented a comprehensive privacy program,” Meta said.

Cambridge Analytica, now defunct, worked for Donald Trump’s successful presidential campaign in 2016, and gained access to the personal information from millions of Facebook accounts for the purposes of voter profiling and targeting.

Cambridge Analytica obtained that information without users’ consent from a researcher who had been allowed by Facebook to deploy an app on its social media network that harvested data from millions of its users.

The ensuing Cambridge Analytica scandal fueled government investigations into its privacy practices, lawsuits and a high-profile U.S. congressional hearing where Meta Chief Executive Mark Zuckerberg was grilled by lawmakers.

In 2019, Facebook agreed to pay $5 billion to resolve a Federal Trade Commission probe into its privacy practices and $100 million to settle U.S. Securities and Exchange Commission claims that it misled investors about the misuse of users’ data.

Investigations by state attorneys general are ongoing, and the company is fighting a lawsuit by the attorney general for Washington, D.C.

Thursday’s settlement resolved claims by Facebook users that the company violated various federal and state laws by letting app developers and business partners harvest their personal data without their consent on a widespread basis.

The users’ lawyers alleged that Facebook misled them into thinking they could keep control over personal data, when in fact it let thousands of preferred outsiders gain access.

Facebook argued its users have no legitimate privacy interest in information they shared with friends on social media. But U.S. District Judge Vince Chhabria called that view “so wrong” and in 2019 largely allowed the case to move forward.

Reporting by Nate Raymond in Boston; Editing by Muralikumar Anantharaman

Our Standards: The Thomson Reuters Trust Principles.

Nate Raymond

Thomson Reuters

Nate Raymond reports on the federal judiciary and litigation. He can be reached at nate.raymond@thomsonreuters.com.

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Business

Facebook parent Meta to settle Cambridge Analytica scandal case for $725 mln

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Dec 23 (Reuters) – Facebook owner Meta Platforms Inc (META.O) has agreed to pay $725 million to resolve a class-action lawsuit accusing the social media giant of allowing third parties, including Cambridge Analytica, to access users’ personal information.

The proposed settlement, which was disclosed in a court filing late on Thursday, would resolve a long-running lawsuit prompted by revelations in 2018 that Facebook had allowed the British political consulting firm Cambridge Analytica to access data of as many as 87 million users.

Lawyers for the plaintiffs called the proposed settlement the largest to ever be achieved in a U.S. data privacy class action and the most that Meta has ever paid to resolve a class action lawsuit.

“This historic settlement will provide meaningful relief to the class in this complex and novel privacy case,” the lead lawyers for the plaintiffs, Derek Loeser and Lesley Weaver, said in a joint statement.

Meta did not admit wrongdoing as part of the settlement, which is subject to the approval of a federal judge in San Francisco. The company said in a statement settling was “in the best interest of our community and shareholders.”

“Over the last three years we revamped our approach to privacy and implemented a comprehensive privacy program,” Meta said.

Cambridge Analytica, now defunct, worked for Donald Trump’s successful presidential campaign in 2016, and gained access to the personal information from millions of Facebook accounts for the purposes of voter profiling and targeting.

Cambridge Analytica obtained that information without users’ consent from a researcher who had been allowed by Facebook to deploy an app on its social media network that harvested data from millions of its users.

The ensuing Cambridge Analytica scandal fueled government investigations into its privacy practices, lawsuits and a high-profile U.S. congressional hearing where Meta Chief Executive Mark Zuckerberg was grilled by lawmakers.

In 2019, Facebook agreed to pay $5 billion to resolve a Federal Trade Commission probe into its privacy practices and $100 million to settle U.S. Securities and Exchange Commission claims that it misled investors about the misuse of users’ data.

Investigations by state attorneys general are ongoing, and the company is fighting a lawsuit by the attorney general for Washington, D.C.

Thursday’s settlement resolved claims by Facebook users that the company violated various federal and state laws by letting app developers and business partners harvest their personal data without their consent on a widespread basis.

The users’ lawyers alleged that Facebook misled them into thinking they could keep control over personal data, when in fact it let thousands of preferred outsiders gain access.

Facebook argued its users have no legitimate privacy interest in information they shared with friends on social media. But U.S. District Judge Vince Chhabria called that view “so wrong” and in 2019 largely allowed the case to move forward.

Reporting by Nate Raymond in Boston; Editing by Muralikumar Anantharaman

Our Standards: The Thomson Reuters Trust Principles.

Nate Raymond

Thomson Reuters

Nate Raymond reports on the federal judiciary and litigation. He can be reached at nate.raymond@thomsonreuters.com.

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Technology

Video gamers sue Microsoft in U.S. court to stop Activision takeover

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Dec 20 (Reuters) – Microsoft Corp (MSFT.O) was hit on Tuesday in U.S. court with a private consumer lawsuit claiming the technology company’s $69 billion bid to purchase “Call of Duty” maker Activision Blizzard Inc (ATVI.O) will unlawfully squelch competition in the video game industry.

The complaint filed in federal court in California comes about two weeks after the U.S. Federal Trade Commission filed a case with an administrative law judge seeking to stop Microsoft, owner of the Xbox console, from completing the largest-ever acquisition in the video-gaming market.

The private lawsuit also seeks an order blocking Microsoft from acquiring Activision. It was filed on behalf of 10 video game players in California, New Mexico and New Jersey.

The proposed acquisition would give Microsoft “far-outsized market power in the video game industry,” the complaint alleged, “with the ability to foreclose rivals, limit output, reduce consumer choice, raise prices, and further inhibit competition.”

Microsoft logo is seen on a smartphone placed on displayed Activision Blizzard logo in this illustration taken January 18, 2022. REUTERS/Dado Ruvic/Illustration

A Microsoft representative on Tuesday defended the deal, saying in a statement that it “will expand competition and create more opportunities for gamers and game developers.” After the FTC sued, Microsoft President Brad Smith said, “We have complete confidence in our case and welcome the opportunity to present our case in court.”

In a statement, plaintiffs’ attorney Joseph Saveri in San Francisco said, “As the video game industry continues to grow and evolve, it’s critical that we protect the market from monopolistic mergers that will harm consumers in the long run.”

Private plaintiffs can pursue antitrust claims in U.S. court, even while a related U.S. agency case is pending. The takeover, announced in January, also faces antitrust scrutiny in the European Union.

The FTC previously said it sued to stop “Microsoft from gaining control over a leading independent game studio.” The agency said the merger would harm competition among rival gaming platforms from Nintendo Co Ltd (7974.T) and Sony Group Corp (6758.T).

Reporting by Mike Scarcella; editing by Leigh Jones, Cynthia Osterman and Jonathan Oatis

Our Standards: The Thomson Reuters Trust Principles.

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US

Trump Organization found guilty of tax fraud scheme

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NEW YORK, Dec 6 (Reuters) – Donald Trump’s real estate company was convicted on Tuesday of carrying out a 15-year-long criminal scheme to defraud tax authorities, adding to the legal woes facing the former U.S. president as he campaigns for the office again in 2024.

The Trump Organization – which operates hotels, golf courses, and other real estate around the world – was found guilty of paying personal expenses for top executives including former chief financial officer Allen Weisselberg, and issuing bonus checks to them as if they were independent contractors.

The company faces up to $1.6 million in fines after being convicted on all charges, including scheming to defraud tax authorities, conspiracy and falsifying business records. Trump was not charged in the case.

Justice Juan Merchan, who presided over the trial in state court in New York, set a sentencing date for Jan. 13.

While the fine is not expected to be material for a company of the Trump Organization’s size, the conviction could complicate its ability to do business.

Weisselberg, 75, testified as the government’s star witness as part of a plea deal that calls for a sentence of five months in jail.

Manhattan District Attorney Alvin Bragg, whose office prosecuted the case, called the verdict “very just.”

“The former president’s companies now stand convicted of crimes,” Bragg said in the New York courthouse after the verdict, speaking of the Trump Corporation and Trump Payroll Corporation, the two units of the Trump Organization which were convicted.

Asked if he regretted not charging Trump in the case, Bragg did not respond.

He has said that the office’s investigation into Trump is continuing.

APPEAL

Alan Futerfas, a lawyer for the Trump Organization, said the company would appeal and that the criminal law governing corporate liability was vague.

“It was central to the case,” he told reporters after the verdict.

The jury deliberated for about 12 hours over two days.

[1/6] Former U.S. President Donald Trump attends a rally to support Republican candidates ahead of midterm elections, in Dayton, Ohio, U.S. November 7, 2022. REUTERS/Gaelen Morse/File Photo

The case centered on charges that the company paid personal expenses like free rent and car leases for executives including Weisselberg without reporting the income, and gave them bonuses as non-employee compensation from other Trump entities like the Mar-a-lago Club, without deducting taxes.

According to testimony during the four-week trial, Trump himself signed the bonus checks annually, paid private school tuition for Weisselberg’s grandchildren, authorized the lease for his luxury Manhattan apartment and approved a salary deduction for another executive.

“The whole narrative that Donald Trump was blissfully ignorant is just not real, prosecutor Joshua Steinglass told jurors during his closing argument on Friday.

He said the “smorgasbord of benefits” was designed to keep top executives “happy and loyal.”

Republican Trump, who on Nov. 15 announced his third campaign for the presidency, said in a statement he was “disappointed” by the verdict but called the case a “Manhattan witch hunt.” Both Bragg and his predecessor who brought the charges, Cyrus Vance, are Democrats.

SEPARATE LAWSUIT

The Trump Organization separately faces a fraud lawsuit brought by New York state Attorney General Letitia James.

Trump himself is being investigated by the U.S. Department of Justice over his handling of sensitive government documents after he left office in January 2021 and attempts to overturn the November 2020 election, which he lost to Democrat Joe Biden.

Lawyers for the Trump Organization argued that Weisselberg carried out the scheme to benefit himself, not the company. They tried to paint him as a rogue employee. Weisselberg is currently on paid leave and testified that he hopes to get another $500,000 bonus in January

Trump wrote on his Truth Social platform on Nov. 19. that his family got “no economic gain from the acts done by the executive.”

Weisselberg, who pleaded guilty in August to concealing $1.76 million in income from tax authorities, testified that although Trump signed checks involved, he did not conspire with him.

He said that the company saved money by paying for his rent, utilities, Mercedes-Benz car leases for him and his wife and other personal expenses rather than raising his salary, because a wage hike would have had to account for taxes.

He said Trump’s two sons – who took over the company’s operations in 2017 – gave him a raise after they knew about his tax dodge scheme.

By then, Trump was president, and the company was preparing for greater scrutiny.

“We were going through an entire cleanup process of the company to make sure that since Mr. Trump is now president everything was being done properly,” Weisselberg testified.

Reporting by Luc Cohen and Karen Freifeld in New York; additional reporting by Andrew Hofstetter in New York; Editing by Noeleen Walder and Grant McCool

Our Standards: The Thomson Reuters Trust Principles.

Luc Cohen

Thomson Reuters

Reports on the New York federal courts. Previously worked as a correspondent in Venezuela and Argentina.

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Business

Foxconn’s woes to take bigger toll on giant China iPhone plant as more workers leave – source

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  • Foxconn Zhengzhou plant’s Nov shipments to fall further – source
  • Worker unhappiness at plant escalated into protests this week
  • Over 20,000 workers, mostly new recruits, have left – source

TAIPEI, Nov 25 (Reuters) – Foxconn’s (2317.TW) flagship iPhone plant in China is set to see its November shipments further reduced by the latest bout of worker unrest this week, a source with direct knowledge of the matter said on Friday, as thousands of employees left the site.

The company could now see more than 30% of the site’s November production affected, up from an internal estimate of up to 30% when the factory’s worker troubles started in late October, the source said.

The site, which is the only factory where Foxconn makes premium iPhone models, including the iPhone 14 Pro, is unlikely to resume full production by the end of this month, the source added.

The world’s largest Apple (AAPL.O) iPhone factory has been grappling with strict COVID-19 restrictions that have fuelled discontent among workers and disrupted production ahead of Christmas and January’s Lunar New Year holiday, as many workers were either put into isolation or fled the plant.

It has fuelled concerns over Apple’s ability to deliver products for the busy holiday period.

On Wednesday workers, most of whom were new recruits hired in recent weeks, clashed with security personnel at the Zhengzhou plant in central China.

Many claimed they were misled over compensation benefits at the factory, and others complained about sharing dormitories with colleagues who had tested positive for COVID.

Foxconn apologised for a pay-related “technical error” when hiring on Thursday, and later offered 10,000 yuan ($1,400) to protesting new recruits who agreed to resign and leave.

The source said more than 20,000 workers, mostly new hires not yet working on production lines, took the money and left. Videos posted on Chinese social media on Friday showed crowds and long lines of luggage-laden workers queuing for buses.

[1/2] The logo of Foxconn is seen outside the company’s building in Taipei, Taiwan November 10, 2022. REUTERS/Ann Wang

“It’s time to go home,” one person posted.

Foxconn, formally known as Hon Hai Precision Industry Co, declined to comment. Apple, which said on Thursday it had staff at the factory, did not immediately respond to a request for comment on Friday.

The plant, before its woes began, employed more than 200,000 staff. It has dormitories, restaurants, basketball courts and a football pitch across its sprawling roughly 1.4 million-square-metre (15 million-square-foot) facility.

Another Foxconn source familiar with the matter said some new hires had left the campus but did not elaborate on how many. This person said that because the people leaving had not yet been trained or begun to work, their departures would not cause further harm to current production.

“The incident has a big impact on our public image but little on our (current) capacity. Our current capacity is not affected,” the source said.

“There’s only so much corporate can do on pandemic prevention … It’s been a problem for a while. This is a problem faced by everyone,” the person said, pointing to other worker unrest triggered by rigid COVID restrictions, including upheaval at another Apple supplier, Quanta (2382.TW), in May.

Foxconn shares closed down 0.5%, lagging the broader market, (.TWII) which ended flat.

Hundreds of workers joined protests at Foxconn’s major iPhone plant China’s Zhengzhou this week, with some men smashing surveillance cameras and windows, footage uploaded on social media showed.

($1 = 7.1616 Chinese yuan renminbi)

Reporting By Yimou Lee; Additional reporting by Brenda Goh; Editing by Anne Marie Roantree, William Mallard and Gerry Doyle

Our Standards: The Thomson Reuters Trust Principles.

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Business

Foxconn apologises for pay-related error at China iPhone plant after worker unrest

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  • Foxconn says it is working with staff to resolve disputes
  • Major iPhone factory rocked by protests over pay, conditions
  • Apple says it has team on the ground in Zhengzhou

TAIPEI/SHANGHAI, Nov 24 (Reuters) – Foxconn (2317.TW) said on Thursday a pay-related “technical error” occurred when hiring new recruits at a COVID-hit iPhone factory in China and apologised to workers after the company was rocked by fresh labour unrest.

Men smashed surveillance cameras and clashed with security personnel as hundreds of workers protested at the world’s biggest iPhone plant in Zhengzhou city on Wednesday, in rare scenes of open dissent in China sparked by claims of overdue pay and frustration over severe COVID-19 restrictions.

Workers said on videos circulated on social media that they had been informed that the Apple Inc (AAPL.O) supplier intended to delay bonus payments. Some workers also complained they were forced to share dormitories with colleagues who had tested positive for COVID.

“Our team has been looking into the matter and discovered a technical error occurred during the onboarding process,” Foxconn said in a statement, referring to the hiring of new workers.

“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.” It did not elaborate on the error.

The apology was an about-face from a day earlier when Foxconn said it had fulfilled its payment contracts.

The unrest comes at a time when China is logging record numbers of COVID-19 infections and grappling with more and more lockdowns that have fuelled frustration among citizens across the country. But it has also exposed communication problems and a mistrust of Foxconn management among some staff.

The largest protests had died down and the company was communicating with employees engaged in smaller protests, a Foxconn source familiar with the matter told Reuters on Thursday.

The person said the company had reached “initial agreements” with employees to resolve the dispute and production at the plant was continuing.

Mounting worker discontent over COVID outbreaks, strict quarantine rules and shortages of food had seen many employees flee the enclosed factory campus since October after management implemented a so-called closed-loop system that isolated the plant from the wider world.

Many of new recruits had been hired to replace the workers who had fled – estimated by some former staff to number thousands.

The Taiwanese company said it would respect the wishes of new recruits who wanted to resign and leave the factory campus, and would offer them “care subsidies”. The Foxconn source said the subsidies amounted to 10,000 yuan ($1,400) per worker.

APPLE RISKS

Home to over 200,000 workers, Foxconn’s Zhengzhou plant has dormitories, restaurants, basketball courts and a football pitch across its sprawling roughly 1.4 million square metre facility.

The factory makes Apple devices including the iPhone 14 Pro and Pro Max, and accounts for 70% of iPhone shipments globally.

Reuters Graphics Reuters Graphics

Apple said it had staff at the factory and was “working closely with Foxconn to ensure their employees’ concerns are addressed”.

Several shareholder activists told Reuters the protests showed the risks Apple faces through its reliance on manufacturing in China.

“The extreme dependence of Apple on China, both as a (consumer) market and as its place of primary manufacturing, we see that a very risky situation,” said Christina O’Connell, a senior manager for SumOfUs, a nonprofit corporate accountability group.

Reuters reported last month that iPhone output at the Zhengzhou factory could slump by as much as 30% in November and that Foxconn aimed to resume full production there by the second half of the month.

The Foxconn source familiar with the matter said it was not immediately clear how much impact the worker protests might have on production for November and that it might take a few days to work that out, citing the large size of the factory.

A separate source has said the unrest had made it certain that they would not be able to resume full production by month-end.

Reuters Graphics Reuters Graphics

Apple has warned it expects lower shipments of premium iPhone 14 models than previously anticipated.

Reuters Graphics

($1 = 7.1353 Chinese yuan)

Reporting by Yimou Lee in Taipei and Brenda Goh in Shanghai; Additional reporting by Ross Kerber in Boston, Beijing Newsroom and Yew Lun Tian; Editing by Anne Marie Roantree, Stephen Coates and Edwina Gibbs

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