As we continue to follow up on the impact of the deadly explosion at Foxconn’s manufacturing facility in Chengdu, China on May 20th, we are learning more about production suspension and its affect on iPad 2 production. According to a new analysis from IHS iSuppli, the aftermath of the explosion could result in the production loss of 500,000 iPad 2 units being shipped in the second quarter. Based on IHS iSuppli research, the Chengdu plant manufactures about a half-million units per month and, depending on the length of the investigation and suspension of the plant, things may not get back under way until June, or even later.
As we reported yesterday, Foxconn’s Chengdu plant was only responsible for manufacturing of 25-30% of the tablets during the month of April. Because the production at the Chengdu plant had not yet reached its full potential, the company’s Shenzhen plant is expected to pick up the slack. According to iSuppli.com, Foxconn chairman, Terry Gou was reported as saying the explosion would not affect production in the third quarter. HIS iSuppli believes “There likely will be some impact on production in the second quarter.”
As mentioned, Foxconn’s Shenzhen plant is expected to ramp up production at its already over-worked facility in order to compensate for lost production in Chengdu. The Shenzhen plant has the capacity to manufacture 7.5 million units in the second quarter, which falls short of the company’s total expected output of 7.8-8.1 million, or between 300,000 and 600,000 units, according to iSuppli.com.
Apple, Inc. has been under fire lately because of its relationship with Foxconn after reports have come out that the Shenzhen plant has recorded an unusually high number of suicide rates, possibly due to poor working conditions. Now, that same plant will be responsible for picking up the extra work lost at the Chengdu plant. One has to wonder how this news has affected workers at the plant.
Although Foxconn, in collaboration with Apple, Inc. have worked to improve conditions at the company’s factories, recent events and how Foxconn is handling them, call into question the company’s regulations on workplace safety and how Apple, Inc. will help facilitate better conditions.
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