A major ongoing story of early 2022 has been Shanghai, China’s shutdowns due to strict COVID-19 lockdown measures affecting global supply chains for various companies including Tesla and Apple. Shanghai has been reopening and workers have been getting back to production, but measures to lift the lockdowns have been flimsy and workers at a Quanta factory which supplies parts for Apple and Tesla products recently clashed with security officials.
The recent clash was reported in Chinese social media, as shared by Reuters and Bloomberg. Reportedly, a fight broke out when workers were returning to their dormitories after a shift ended. Apparently, frustrations had already been flaring because some workers were already concerned about being exposed to co-workers that had returned from quarantine. There were also rising tensions over the flimsy lifting of restrictions from a strict one-month lockdown. This led to workers jumping turnstiles and pushing past security to get into the Quanta factory, as well as workers and security coming to blows and attempted detainment during the conflict.
Apple, Tesla, and Quanta have not issued any formal statement since the clash occurred, but the issues with Shanghai have already come up in recent quarterly earnings results reporting. Tesla leads pointed to the situation in Shanghai as having had a huge impact on a month of Tesla production which is likely to affect bottom lines in immediately upcoming quarters. Even so, Elon Musk said the factory is also about to go into overdrive and it was backed up by Tesla announcing an expansion to its Shanghai Gigafactory.
Nonetheless, it would appear that tensions are flaring between workers and the government as it continues to struggle to handle COVID-19 breakouts with a heavy hand. Time will tell if we see these issues continue to affect production at worldwide companies such as Apple and Tesla, as well as their performance in upcoming quarter closes.