iPhone supplier Wistron sacks India VP; Apple halts business temporarily

The riots at iPhone supplier Wistron facility in Karnataka Kolar district last week came as a shock as it revealed the shocking working conditions at the plant. The vandalism that occurred on December 12 as a result of unpaid salaries and overtime payment. As the matter is now in the hands of law enforcement to investigate the riots, the Taiwanese firm is taking cognizance of the situation.

In view of the incidents, Apple has decided to suspend any future businesses with Wistron until corrective actions have been taken. Apple has also been investigating the issues that led to the riots at Wistron's Narasapura facility. The iPhone maker, and its independent auditors, are going to monitor the progress and ensure the workers are compensated in a timely manner.

"Our preliminary findings indicate violations of our Supplier Code of Conduct by failing to implement proper working hour management processes. We have placed Wistron on probation & they'll not receive any new business from Apple before they complete corrective actions," an Apple spokesperson was quoted as saying by ANI.

Wistron's corrective measures

Wistron has already taken some major steps to address the ongoing tension at its Karnataka plant. The iPhone supplier has removed its VP in charge of India operations and admitted to the lapses in paying its workers.

Below is the full statement released by Wistron:

We have been investigating and have found that some workers were not paid correctly, or on time. We deeply regret this and apologize to all of our workers. This is a new facility and we recognize that we made mistakes as we expanded. Some of the processes we put in place to manage labor agencies and payments need to be strengthened and upgraded," Wistron said in a statement on Saturday.

We are taking immediate action to correct this, including disciplinary action. We are removing the Vice President who oversees our business in India. We are also enhancing our processes and restructuring our teams to ensure these issues cannot happen again.

Our top priority is to ensure all workers are fully compensated immediately. We have established an employee assistance program for workers at the facility. We also set up a 24-hour grievance hotline in Kannada, Telugu, Tamil, Hindi and English to ensure all workers can voice any concerns they may have anonymously. We are deeply committed to our business and employees in India. We are working diligently on corrective actions to ensure this does not happen again."

Riots at Wistron facility

Wistron Corporation initially estimated the damage from violence at its Narsapura plant near Bengaluru on the last weekend to be around $7.11 million (Rs 52.4 crore). The police has arrested over 150 people including employees and SFI workers for the rioting. An FIR against 7,000 unknown people, including 2,000 contract workers of the company has also been registered. Moreover, in the FIR, the company said it suffered losses and damages worth over Rs 437 crore.

The company has invested about Rs 2,000 crore in the Naraspura plant to roll out about 4 lakh iPhone 7 handsets per annum along with the second-generation iPhone SE devices.

Of about 10,000 workers, around 1,340 are permanent and 8,500 are on contract, hired by six firms.