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Foxconn Resumes Production at China Plant After Brawl

Foxconn Technology Group said it expects limited impact on production after resuming operations today at a China factory where fighting between almost 2,000 workers left 40 hospitalized.

“Overall it probably won’t be significant because this factory mainly does a lot of components, auto electronics, consumer electronics and precision molding” and not finished products, Louis Woo, a spokesman for the Taipei-based company, said by phone today. “If we lose just one day, I don’t expect it will impact any finished goods significantly and, with overtime, we could make up any shortfall.”

The fighting highlights the tensions that can build up between migrant workers from different provinces working at the same factory campus. The Sept. 23 incident involved laborers from Shandong province and Henan province, with about 5,000 police being sent to the facility, the state-run Xinhua News Agency reported. Some employees were arrested.

Foxconn Chairman Terry Gou agreed with a management decision to shut production for a day to “give people time to cool down” after the fight was brought under control about 3 a.m. yesterday, Woo said earlier.

iPhone 5 Unaffected

Production of Apple Inc. (AAPL)’s iPhone 5 is unlikely to be affected because the facility doesn’t assemble the device, which is made at factories in Zhengzhou, Henan province and Shenzhen, in Guandong province, Fubon Financial Holding Co. analyst Jeff Pu said today.

The Taiyuan plant, which employs 79,000 people, is one of about a dozen factories that Foxconn operates in China for clients including Hewlett-Packard Co. (HPQ), Nintendo Co. and Sony Corp. Woo declined to say which products were made at the site.

In January 2011, clashes between rival groups left two people injured in Chengdu, central China, Foxconn said at the time. That conflict and the most recent dispute were linked to regional rivalries and not the work itself, Foxconn has said.

A local shop was damaged, gates of the factory were crashed and police cars were smashed in the Sept. 23 incident in Taiyuan, northern China, the China Business News reported yesterday.

Shares of Hon Hai Precision Industry Co. (2317) the Taipei-listed flagship of Foxconn Technology Group, declined 2.4 percent to close at NT$93.50, compared with a 0.4 percent drop in the benchmark Taiex (TWSE) index. The stock has added 24 percent this year, outpacing the Taiex’s 9.4 percent gain.

Primary Supplier

Foxconn employs more than 1.2 million workers in at least 18 countries, including China, Brazil, Taiwan, Vietnam and Mexico. It is the primary supplier of Apple’s iPad and iPhone, Sony’s PlayStation game console and TVs, Nintendo’s Wii, Hewlett-Packard and Dell Inc. computers, and Cisco Systems Inc. routers.

The manufacturer, founded by Gou in 1974, opened its China facilities to auditors after Apple became the first technology company to join the Washington-based Fair Labor Association following criticism by rights groups. Suicides by at least 10 Foxconn employees in 2010 highlighted conditions at the supplier.

Foxconn is ahead of schedule to improve working conditions at its Apple facilities, the FLA said in August after earlier finding serious violations of labor standards.

To contact the reporter on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net.

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net.

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