Wistron India plant riot causes almost NT$1.7 billion in losses

12/14/2020 04:27 PM
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Update: Losses from riot in India plant lower than reported: Wistron

New Delhi, Dec. 14 (CNA) A riot late last week at a plant in India run by Taiwan-based contract electronics chipmaker Wistron Corp., resulted in estimated losses of 4.37 billion Indian rupees or almost NT$1.7 billion (US$60.28 million), according to Indian media reports.

The Times of India reported on Monday that the preliminary estimate of losses included thousands of iPhones stolen during the riot.

Wistron will suspend operations at the factory in Karnataka State, southern India, a production site for iPhones, for two weeks, a source familiar with the incident told CNA.

Because the incident occurred before the peak Christmas season, Wistron's losses could be larger than the preliminary estimate, the source said.

On Saturday, a protest by about 2,000 workers at Wistron's Narasapura factory, turned violent after the night shift, apparently over pay cuts, with furniture and factory assembly units destroyed. Attempts were even made to set fire to vehicles, according to Indian media reports.

The Times of India reported on Sunday that the employees were angry because they were not being paid the wages agreed on when they were recruited.

"While an engineering graduate was promised Rs 21,000 per month, his/her salary had reduced to Rs 16,000 and, subsequently, to Rs 12,000 in the recent months. Non-engineering graduates' monthly salary had reduced to Rs 8,000. The salary amount being credited to our accounts have been reducing and it was frustrating to see this," the Times of India quoted an employee as alleging. 

Wistron's representative later confirmed that some office furniture at the factory was damaged but the equipment on the main assembly lines and the warehouses remains intact.

Indian police have made about 130 arrests in relation to the incident, the sources said.

In a statement, Wistron on Sunday claimed the riot at the plant in Narasapura was caused by unidentified outside instigators who broke into the factory and sabotaged the facility, adding that the company will work with authorities and police in India to investigate the incident.

"We are deeply shocked by the events at our Narasapura facility. We abide by the law and are supporting the authorities with their investigation," Wistron said.

"The safety and well being of our team members is always our top priority. We will collaborate with related parties to provide any help needed by the employees," Wistron added.

The company will do everything it can to restore production at the Narasapura site as soon as possible to protect the benefits and rights of its employees, the statement said.

Shivaram Hebbar, head of Karnataka's labor ministry, told Indian news media on Sunday that the disputes about labor contracts between Wistron and its workers in India has dragged on for more than three months.

According to Taiwan media outlets, Wistron's production lines in India have long been dedicated to assembling more affordable iPhones with the iPhone SE accounting for the majority of production, and starting in the second half of this year they have rolled out the smaller iPhone 12 models.

Market analysts said Wistron is able to assign production capacity to other factories in India and Kunshan, China, to make up the shortfall caused by the violence at the Narasapura factory so the impact on the Taiwanese company should be limited.

Ben Wang (王永平), head of the Taiwan office in Chennai, told CNA on Sunday that he had discussed the matter with Karnataka's Chief Minister B.S. Yeddyurappa and Minister for Large and Medium Scale Industries Jagadish Shettar.

The top state authorities promised that the safety of Taiwanese businesses will be ensured and the investigation into the riots expedited, Wang said.

However, analysts said the market should remain alert over the possibility that Apple could decide to investigate possible violations of its Supplier Code of Conductor by Wistron.

(By Charles Kang, Jiang Ming-yan, Evelyn Kao and Frances Huang)

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