There are seven workforce vendor firms that have partnered with Wistron
India being one of just three countries in the world that manufactures Apple products, besides Brazil and China he incident could become a pain point in attracting investors
After allegations of violation in wage payments and work hours surfaced after the incident of violence at Taiwanese manufacturing giant Wistron’s facility in Kolar district, Karnataka, the state government on Tuesday tried to control the damage by assuaging investor sentiment and protecting labour rights.
India being one of just three countries in the world that manufactures Apple products, besides Brazil and China, the Wistron incident could become a pain point in attracting investors and the centre flagship ‘Make in India’ campaign.
"Wistron is a very important project and a flag bearer of India’s ambitions to become a global hub for electronics manufacturing. The State Government is committed to its success and business continuity," the Karnataka government said in a statement on Tuesday.
Around 156 people have been arrested so far of the over 7000 unnamed perpetrators, after the incident.
On Tuesday afternoon, a police van with security personnel and riot gear was parked right outside Wistron’s Kolar plant. Another police jeep patrolled the 43-acre campus and nearly 70 more policemen were stationed in and around the factory, three days after worker unrest at the plant took a violent turn on Saturday morning. Production has been stalled since the incident and remains uncertain when it will resume, even though the plant remains open for permanent employees.
Wistron factory in Kolar is better known as the "iPhone company" in Karnataka which takes pride in naming the global firm's presence in the state to attract other investors.
"Assuaging investor sentiment is by talking to them and telling the industry that we are behind you. We first want to investigate and punish the guilty, asses and restore what is damaged and make sure that labour, industrial and worker relations are put on the same level," Gaurav Gupta, principal secretary of Karnataka's industries department told Mint.
The incident has not helped Karnataka's 'investment friendly' image as thousands of crores now hinge on how the state--and centre--can ease the growing tension between workers and management.
Around 45 km away, in Bidadi, the deadlock between workers and management in car-maker Toyota Kirloskar Motors continues for over a month now, which the company said is one of its most problematic sites globally.
“I was hired at a monthly of ₹21,000 but I ended up getting less than ₹13,000 despite working 12-hour shifts in which we get four breaks totaling 50 minutes," said a contract worker at Wistron’s plant, which employs around 1400 permanent employees and 8500 contract workers.
In a post-covid world, when there is a possibility of companies moving their manufacturing plants out of China to India and other countries, the Wistron could be a deterrent.
Wistron in its police complaint said it has suffered losses to the tune of ₹437 crore including ₹412 crore of iPhones, laptops and precision machinery that was stolen during the incident.
Wistron officials could not be reached for comment on Tuesday.
Apple has launched an investigation into the incident to probe if the allegations of labour violations and measures to prevent a repeat of the incident.
"This incident has sent a very wrong message. We do not have investors coming in or creating new jobs and the government is neither on the industry's side nor on the worker's side," Priyank Kharge, Congress legislator said. Kharge was the state's IT/BT minister when Wistron started manufacturing iPhones in 2017.
Contract workers at Wistron allege that there are salary dues, unexplained cut in wages and that no over-time was being paid that boiled over and resulted in the violence on Saturday.
However, the damage to Wistron's production lines is unlikely to dent Apple's supply chain as its factories in China and Brazil can step up to overcome shortage of phones, if any.
Apple had suspended new business to its manufacturing partner Pegatron, in China after it discovered violations at the plant.
Industry bodies like India Cellular and Electronics Association among others have come out in solidarity with the company and employees as a token of solidarity.
The conflict has also raised questions over labour practices in Wistron, where 12-hour shifts were the norm for nearly 8500 contract workers.
The company has informed the state government that it has paid all its dues to the contractors through whom these workers are hired.
An independent report submitted by the All India Central Council of Trade Unions (AICCTU) cites multiple violations including the system of exploiting workers in the name of contracts and the conditions in which they work among other allegations.
Police are using technology like mobile tower triangulation, WhatsApp group messages and examining footage from over 450 CCTVs to identify the culprits, Karthik Reddy, Kolar district superintendent of police said.
The government acknowledges that there were delays and unexplained cuts in wages but is yet to determine the role of contractors who are central in this dispute.
There are seven workforce vendor firms that have partnered with Wistron.