Apple suspends contract partner Wistron following violent incident at its India plant.
Apple has placed its contract manufacturing partner Wistron on probation and won’t provide any new business to the Taiwanese firm until it takes "complete corrective actions" following lapses at its southern India plant earlier this month. The iPhone maker announced this on Saturday, citing findings from its employees and independent auditors hired to investigate the issues at Wistron’s Narasapura facility.
The company found that Apple’s "Supplier Code of Conduct" was violated at the facility, and Wistron failed to implement proper working-hour management processes. This led to payment delays for some workers in October and November, as cited by preliminary findings.
As always, our focus is on making sure everyone in our supply chain is protected and treated with dignity and respect. We are very disappointed and taking immediate steps to address these issues, Apple said in a statement. Wistron has taken disciplinary action and is restructuring their recruitment and payroll teams in Narasapura. Apple employees, along with independent auditors, will monitor their progress.
The situation comes amid reports of widespread discontent among workers at Wistron’s Narasapura facility. Workers, many of whom rely on the company for a livelihood, have accused them of underpaying staff members who earn about $200 a month. As a result, thousands of workers rioted over unpaid salaries on December 12 at the plant situated about 40 miles outside the tech hub Bangalore. The protesters destroyed windows and other property and even set ablaze iPhones and factory equipment.
Wistron, a key manufacturing partner for Apple in India, has this year more than quadrupled its workforce and ramped up production capacity in the South Asian nation. A report by the Karnataka state government concluded serious violations of labor laws, including underpayment of wages, irregular hours, and poor working conditions at Wistron’s facility in India.
The report also estimated that assets worth $7 million were damaged during the recent unrest. Wistron acknowledged that some workers at its plant had not been paid properly. It also announced the removal of several executives for poor performance, including its CEO Toshinoriban Tsukamoto and CFO Seiichiro Oda.
The company has faced growing pressure from labor unions and human rights organizations to address these issues and restore trust in its operations in India. Apple’s decision to place Wistron on probation marks a significant blow to the company’s supply chain operations in the country, which is increasingly important for its global manufacturing strategy.
Meanwhile, other manufacturers like Foxconn are expanding their production capacity in India to meet growing demand from global brands like Apple and Microsoft. This has further complicated the already challenging landscape for local manufacturers.
The incident highlights the delicate balance companies must strike when managing supply chains, especially in regions that are critical to their business operations. As competition intensifies and regulatory scrutiny grows, companies will need to be more proactive in addressing worker rights and ensuring compliance with labor laws.
In conclusion, Apple’s decision to place Wistron on probation underscores the importance of supplier reliability and ethical practices in maintaining a robust global supply chain.
