A resurgence of a Covid-19 outbreak in China in March led to a lockdown in the nation’s largest city Shanghai, disrupting work at technology and electric vehicle plants and other industries’ factories, causing major supply chain, logistics and production issues.
Tesla on March 28 shut its Shanghai Gigafactory, but was allowed to reopen its plant on April 19. Volkswagen shut its Shanghai-area factory on April 1, but General Motors decided not to shut its plant and instead was allowed to remain open under so-called “closed loop” operations.
Closed-loop measures require employees to live, work and sleep at the plant while it continues to operate, but they are not allowed to leave the plant to ensure they do not transmit the Covid- 19 virus to the community outside of the factory or bring it into the plant from outside during the lockdown.
Closed-Loop Measures Keep Plant Open
Taiwan-based Quanta Computer, which assembles MacBooks and other products for Apple in Shanghai, adopted the closed-loop system in April for its employees to enable the company to remain open during the region’s lockdown.
The Covid-19 lockdown in China, which began in March, finally reached a boiling point with frustrated technology workers at Quanta’s Shanghai factory, Bloomberg reported on May 6. One worker said that employees were worried about further tightening of measures as a result of positive Covid cases inside the factory’s campus, according to the report.
Quanta did not comment on the riot, Bloomberg said, but an employee at the factory said that the Chinese government was taking a central role in managing the factory’s operations. On the evening of May 5, Quanta workers battled with factory guards and crashed through isolation barriers after being locked down at the factory for many weeks.
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Tensions at the factory in the Songjiang district of Shanghai sparked the conflict after workers tried to return to dormitories after their shifts, according to Taiwan media outlet UDN, Bloomberg reported. Over 100 employees jumped over a barrier and ran past guards, ignoring their warnings. Employees had become tired and frustrated by the controlled environment at the plant, a worker said.
The factory resumed normal operations by the morning of May 6, the report said.
Shanghai’s lockdowns have led to protests and complaints that culminated in the uprising at the Quanta plant. The implementation of closed-loop measures had also resulted in more than 70% of Shanghai’s industrial manufacturing facilities restarting production. Officials said that 90% of 660 key industrial companies have resumed output, according to Bloomberg.
Quanta generates more than 50% of its revenue through its partnership with Apple, the report said. The company also does business with Hewlett Packard Inc. (HPQ) – Get HP Inc. Report, Dell Technologies (DELL) – Get Dell Technologies Inc Class C Report, and Microsoft (MSFT) – Get Microsoft Corporation Report.
Other Apple Factories Shut Down
Foxconn Technology Group on March 14 shut down its factories in Shenzhen in southern China near Hong Kong after city officials implemented a Covid-19 lockdown. Foxconn also on April 15 announced a Covid-19 lockdown in the Zhengzhou Airport Economy Zone where Apple’s largest iPhone factory is located. The lockdown has led the company to require its employees to have mandatory Covid testing.
The China Covid-19 lockdowns could result in a loss in production of 6 million to 10 million iPhone units analysts said, according to 9to5Mac. Other Apple products affected by the lockdowns include MacBook Pro and iPad Air.