For more than a decade, companies like Apple Inc. have entertained the idea of evolving away from China-based supply chains to have their devices made in lower-cost locales like India, Vietnam and Mexico.
The challenge of such decentralization became brutally evident last weekend with an uprising at a factory operated by Taiwan’s Wistron Corp. that makes iPhones in India. Workers at the plant in Narasapura, 40 miles from the tech hub of Bengaluru, were reported to be fed up with delayed and underpaid wages and ransacked the factory, destroying equipment and burning vehicles.
Local police responded by swinging lathis — long batons that are used for crowd control — to quell the dawn protest. Over 100 people were detained, local authorities were cited as saying. Wistron said Monday that those involved were not company workers, but didn’t provide evidence. A Toyota Motor Corp. unit has also had recent trouble in the same state, Karnataka.
Apple Chief Executive Officer Tim Cook and Taiwan President Tsai Ing-wen ought to be worried.
Cook, who headed operations before taking over the top job, is among global leaders searching for alternatives to the stability and reliability of a Chinese workforce that still makes the lion’s share of the world’s gadgets. But costs there are rising, and this year’s pandemic has highlighted the trade and security risks from having too much of the supply chain in one place.
India is one obvious choice. Its population is almost as large, wages are far lower, and its governments — local and central — are willing to offer incentives to lure manufacturing. New tariffs on imports and requirements imposed on Apple to procure locally have further strengthened the need to produce in India.
Tsai is equally eager to wean Taiwan’s companies off China’s business as her government faces down growing threats from Beijing. India has its own growing list of issues with China, including border clashes this year that led New Delhi to ban apps and other products made by China’s biggest companies. Relations between Taiwan and India have been growing closer.
Taiwanese companies have been among the most public supporters of Prime Minister Narendra Modi’s Make in India campaign. In 2015, Foxconn Technology Group founder Terry Gou dined with Modi during a trip that included an announced plan to invest $2 billion — the iPhone 11 went into production in India this year.
Yet the largest investors in Indian electronics production, chiefly Taiwan stalwarts such as Foxconn, Pegatron Corp. and Wistron, are also highly wary of pitfalls. Whereas Foxconn employs hundreds of thousands of people in China during the peak iPhone season at facilities in Shenzhen and Zhengzhou, it’s less keen to deploy that mega-factory model in India.
The reason is labor.
A senior Foxconn executive once told me that the the company would like to cap India plants at 10,000 workers. Any bigger, and they’d be at the mercy of unions and local politics. A handful of such smaller factories would spread the risk and reduce reliance on any single facility or jurisdiction.
Although labor protests have broken out at electronics manufacturers in China, including the 2012 riots caused by the iPhone “scratchgate” saga, they’re relatively rare given the size of the overall workforce. Central and local governments in China brook no dissent, allowing operations to run relatively smoothly, even at the expense of workers’ rights. Many times, where protests have occurred, they’ve been with the tacit approval of authorities.
But India is democratic. Its unions are vocal, and local politicians have to be responsive. Foreign companies eager to tap the large domestic market and vast labor pool will need to adjust to the reality that workers may be more quick to stand up for their interests. And Cook will need to get used to his company’s name alongside words like riot and uprising. In many respects, it’s unfair to pick on Apple — the latest complaints appear aimed squarely at Wistron — yet the U.S. company is the client and wields the power to force change, something it’s done in China over the past decade.
Tsai also better hope Taiwan’s companies adapt quickly. While she exerts limited control over private firms or their operations overseas, any dispute involving one reflects badly as she seeks to build alliances. She can ill afford to see the Taiwan brand tarnished.
As the world struggles to devolve away from China in a search for supply chain security, political and corporate leaders need to find ways accommodate a global workforce that wants its own security, too. – Bloomberg
Also read: All global firms like Apple, its suppliers Wistron, Foxconn relocating to India — NITI Aayog CEO
Shame on indian trade unions which are occupied by communists and their ideologists …that attack on winstron is a planned one by the paid agents of communists …..they say no freedom under modi ..but they slam him every time …this itself indicates that though they don’t accept that they are part of vandalised event …but people have to believe that surely it was done by them only and now liberal media is came to hide them and support their Incidents indirectly and also indirectly indian lefties occupied liberal media say india is not a safe heaven for global …companies …shame shame on red flag ideology and media supporting them
According to these failed Marxist trade unions, is vandalism the meaning of being vocal for one’s rights?
There were no trade unions at the Wistron factory.
It seems like a pent-up reaction from contract employees because they were not given a hearing by Wistron management or their Contractor companies for concerns regarding their wages. It makes more sense right now to blame the values of young men in New India’s BJP ruled state rather than the Trade Unions!
You reporter has just reported, an incident. Why the incident took place, you say non payment of dues to worker. How many workers were not paid, what amount, why company has not paid, had workers had any dialogue with management. Your reporter has not asked these question. You have just reported adding your point of view. If you want suppot for journalisam pls ask questions and report with answers.
Something is rotten between Wistron management and the contractor companies. This has needlessly pushed young employable men over the edge. I hope the facts come out in fuĺl from the investigations. Initial anger in Indian public and media will be to blame the young contract workers, that’s easy. But what led them to take this extreme step?
Karnataka Labour Minister is answerable as to why our young men went to this extreme.
Modi government’s labour “reform” bills were passed without consultation with trade unions.
Does Modi’s bill protect contract workers?
Are they not entitled to timely payment of wages? Can workers be made to work overtime without pay? Okay what the workers did was wrong and they will go to jail. But what about the owners and mamagememt of contractor companies, do the bills protect them (employers) at expense of workers?
What is the role of the Labour Department in this issue at state and Central levels? Do they care about contract workers?
Congratulations, New India.
Looks like the youth contract workers like to do rioting rather than picking up new skills and opportunities in a manufacturing unit. How did Wistron HR screen these kind of youth to work for them? Are they only local youth or from all over India?
You are half informed. The workers were not paid their dues for months. The company and contracting agents were sitting on their salaries and trying to skim the wages by paying less than due. This would never happen in China.
Congratulations, New India.
In a state like Karnataka, BJP politicians routinely resort to Hindutva and cow politics. This kind of politics incites communalism and emotions in the youth of the state.
Looks like the working class youth in Karnataka’s districts that voted for BJP get more passionate about such issues rather than caring about jobs & getting skills.
It is well known in India about the contractor-politician nexus. The politicians in the local area need to take accountability.
The MP and MLA’s of Kolar district must hang their heads in shame about the unruly behaviour of the contract workers from their district and also take blame for allowing the contractors to get away with this.
This kind of riotous behaviour would not have happened in states like Tamilnadu or Maharashtra or Gujarat where the politicians and bureaurcrats have better experience with industrialisation.
MODI GOVT MUST TAKE STERN ACTION ACTION AGAINST WEAK & INCAPABLE STATE GOVT OF KARNATAKA WHICH IS RESPONSIBLE FOR LARGE SCALE VIOLENCE IN WISTRON FACTORY IN BENGALURU WHERE LARGE SCALE DESTRUCTION OF FACTORY TOOK PLACE DUE TO GROSS FAILURE OF STATE MACHINERY. THIS WILL BE BIGGEST SETBACK FOR FOREIGN INVESTMENT IN INDIA. THIS IS MAIN REASON FOR SHIFTING MOST OF FACTORIES TO SMALLER COUNTRIES WHERE CONDITION IS MORE CORDIAL & PEACEFUL WHEREAS IN INDIA, THE MAJORITY OF POLITICIANS ARE MOST CORRUPT, DISGRUNTLED & ANTI-NATIONAL WHO ARE RESPONSIBLE FOR BLOCKING SPEEDY PROGRESS OF OUR COUNTRY WHO MUST BE DEALT SEVERELY AND ALL THEIR ASSETS SHOULD BE SEIZED. ONLY THEN THIS COUNTRY CAN HOPE TO PROGRESS FASTER.
What kind of piece is this? Do you support riots, ransacking in the name of democracy?
Is it companies like Winstron who has to adjust?
I know for a fact that MNCs , foreign companies are most compliant as far as labour laws etc. goes.
Why do you need Labour Unions ? To fan violence?
There is too much democracy, too much communism in India.
There is too much Hindutva in India now.
Indian youth especially those that do not have college degrees are unable to think rationally for themselves and are incessantly bombarded to be interested in religious nationalism – Cows, Temples, Vedic past, Sushant Singh Rajput, Anti-Muslim, Kashmir, Pakistan etc. They should be instead be bombarded with skills, technology, jobs and careers.
Our demographic dividend will not pay dividends if the minds of youth in India are channeled towards such political ideas.
And also a challenge to india’s “make in India” dream
This is unacceptable and completely on us! The government of India needs to reimburse Wistron in full for their damages as a goodwill gesture and hope this doesn’t adversely affect our manufacturing credibility!
Also, this is looking more and more like a Chinese play influenced by the Labour Unions! We’ve got to acknowledge our security lapses. Hope we are able to preempt such activities in future and prevent these incidents from reoccurrence due to our misgovernance/carelessness.
We have to find an enemy for this quickly. Anti-nationals have penetrated our Make in India vision.
Not just urban Naxals, it’s quite possible these could be terrorists from Pakistan or from Tukde-tukde gang!
Ha ha PaKiStAn china then ? If u don’t get food for one day you will blame PaKiStAn for that also? You mean Modi’s make in India is a failure due to PaKiStAn? You guys always find a way to blame anyone. Modi is Power because of PaKiStAn Congrees and Muslims only
you guys have same response for everything.
Strict action should be taken against all demonstrators due to this attitude new people will not get jobs.
Strict action should be taken against all labourers due to this attitude new people will not get jobs.
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