Losses from riot in India plant lower than reported: Wistron

12/15/2020 03:31 PM
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From facebook.com/MuniswamyOfficial
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Taipei, Dec. 15 (CNA) Wistron Corp., a Taiwan-based contract electronics maker and part of the Apple supply chain, said Tuesday preliminary estimates of losses from a riot in its factory in southern India were lower than the news media had reported.

In a statement filed with the Taiwan Stock Exchange, where Wistron shares are traded, the manufacturer estimated the losses at its plant in Narasapura in Karnataka state at between NT$100 million and NT$200 million.

Several news outlets, including the Times of India, reported on Monday that the riot cost Wistron around 4.37 billion Indian rupees, or almost NT$1.7 billion (US$60.28 million).

The reports said the losses in the factory, which rolls out iPhones, were made after taking into account a range of losses including the theft of thousands of iPhones.

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. 

On Saturday, a protest by about 2,000 workers at the 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.

In its statement, Wistron said that after a look into losses from the riot, "the company has found no material losses occurring to production lines and warehouses in the plant as had been reported," and it is making every effort to restore operations in the factory.

Wistron said it has been working with authorities and police in India to investigate the incident, and it is also discussing claims for the losses with insurance companies.

The company did not comment, however, on the possibility that it would suspend operations at the factory for two weeks, as CNA was told by a source familiar with the incident on Monday.

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

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

On the same day, Wistron said in a separate statement that the riot was caused by unidentified outside instigators who broke into the factory and sabotaged it, adding: "We abide by the law and are supporting the authorities with their investigation."

"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 said.

In response to the riot, Taiwan's economics minister, Wang Mei-hua (王美花), said Tuesday that the ministry's office in India is trying to get a better understanding of the incident and told Wistron the government will give it any assistance necessary.

Speaking at a Legislative Yuan hearing, Wang said the office in India will make contact with authorities there and find out what help they can provide.

When asked by opposition Kuomintang lawmaker Wen Yu-hsia (溫玉霞), however, about whether the bilateral investment agreement between Taiwan and India signed in 2018 will be applied to the incident, Wang said the accord's protections will only come into play when Wistron submits an application to Taiwan's government for compensation.

Wen urged the government to take a hardline stance in helping Wistron negotiate with the Indian government.

On Sunday, Ben Wang (王永平), head of the Taiwan office in Chennai, told CNA 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.

Meanwhile, Reuters reported on Monday that Apple has been investigating whether Wistron has violated its Supplier Code of Conductor over staff pay and working conditions.

According to Taiwanese media outlets, Wistron's production lines in India specialize in assembling more affordable iPhones, with the iPhone SE accounting for most of its production, but they began rolling out smaller iPhone 12 models in the second half of 2020.

(By Jeffrey Wu, Wang Cheng-chung and Frances Huang)

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