Two days after Sunday's riot at the Chinese Foxconn Technologies factory, the home of the Apple iPhone 5 assembly line was back up and running today. But with police reportedly monitoring street corners and the factory's main entrance, Foxconn still looks like a powder keg with a sizzling fuse.
The causes of the riot are buried beneath layers of spin. Foxconn claims the unrest was not work related, but the labor group Chinese Labor Watch claim that Foxconn security guards beating up workers precipitated Sunday's events. Other reports state that the fighting broke out between two groups of workers who make different products at the plant. What we know for sure is that the riot, which allegedly began as a fist fight, erupted into a full-scale brawl with over 2,000 people involved. Forty were hospitalized, with at least one stabbing. China's state run Xinhua news agency reported 5,000 police officers sent in to stop rioters, and did so by 9 a.m. the next day, Monday.
Foxconn, which is run by the Hon Hai Group, a Taiwanese company which is the largest contract maker of Apple products, did not immediately respond to comment, nor did Apple. In a statement to the Chinese newspaper China Daily, Foxconn spokesman Louis Woo said the riot was "not work related." But after a string of employee suicides dating back to 2009 and much-publicized poor working conditions, this assessment seems improbable.
The riot underscores two major problems facing China as well as U.S. manufacturers that patronize them: How to control production facilities that are mini-cities where laborers work long hours, and how to cope with China's slowing economy, with GDP rising 7.6% in the second quarter from a year earlier, its slowest level since the global financial crisis. Many reports have also said that the influx of migrant workers, who likely have difficulty integrating, has been an issue as well. Foxconn's Taiyuan facility has over 79,000 workers, and about a million people employed within mainland China.
Could these issues threaten the production of Apple products and make other American companies reticent about doing business in the Red State? An AP video blaming the unrest partially on the pressure of the iPhone 5 launch suggests that the answer is yes.
As for Foxconn itself, Sunday's riot could be the newest verse in a veritable swan song. With the inherent problems of poor working conditions not addressed, it could happen again.