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Apple Inc. (AAPL): Foxconn Workers Strike in China

Apple Inc.Apple Inc. (NASDAQ:AAPL) is perhaps facing another supply-chain issue in China, as reports coming out of China indicate that a couple thousand workers walked out of a Foxconn factory over quality standards.

Apple Inc. (NASDAQ:AAPL) has launched the iPhone 5 in about 30 countries, and is gradually ramping up to 100 countries by the end of the calendar year. and the company has been facing some issues already with having limited supply to where iPhones are already a week or two behind on delivery dates. And now, about 3,000 to 4,000 Foxconn workers walked out of a factory in Zhengzhou over issues with improving quality of the work being performed and having production timelines not being met, according to a labor watchdog organization.

China Labor Watch said in a release, “multiple iPhone 5 production lines … were in a state of paralysis for the entire day. It was reported that factory management and Apple, despite design defects, raised strict quality demands on workers, including indentations standards of 0.02mm and demands related to scratches on frames and back covers. With such demands, employees could not even turn out iPhones that met the standard. This led to a tremendous amount of pressure on workers. On top of this, they were not permitted to have a vacation during the holiday. This combination of factors led to the strike.”

This is the latest disruption for Apple Inc. (NASDAQ:AAPL), following a riot of 2,000 workers last month that shut down a factory for the day. It is said that his latest push for better quality stems from comments by iPhone customers who noticed scratches wand warping on iPhones that were fresh out of the box. There has been no official word from Apple Inc. (NASDAQ:AAPL) regarding the scratches and nothing about this reported walkout and how it would affect production. How do you think this will affect the Apple sales numbers and the stock price for investors like billionaire fund manager David Einhorn of Greenlight Capital?

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