Foxconn is one of the major producers of goods for Apple through the Hon Hai Precision Industry Co. The largest manufacturing plant of iPhones is in Zhengzhou. Since the coronavirus struck China and many cities quarantined, the factories that make goods for Apple have been closed.
News has been contradictory from China as to when the plants will reopen. At first, there was word that the main plant would not reopen today, which was later followed by a report that work had started. The Chinese government has requested that companies not bring all of their employees in at once, but stagger them to reduce the likelihood of a larger possible spread of the disease.
Reuters revealed that only about 10% of the employees showed up for work at the Apple plant, but there is no idea of how much production took place. The government has said that only companies with mostly local employees are allowed to open at this time. Companies that have employees in areas that were heavily affected by the virus will be allowed to open on Feb. 24.
The full impact of coronavirus on employment in the iPhone factories in China are expected to affect the delay of the new iPhone models. In addition to the iPhone 11 models, the plants are also producing a cheaper version. Forecasts made by Ming-Chi Ku, the top analyst for Apple, reveal that production may be reduced by about 10%. Forecasts for the second quarter are not being given at this time.
Employees at the plant have been asked to wear masks and they are checked for fevers. Production is still expected to be around 38 million units.
Stock prices for Apple fell as much as 1.63% or 1.00 point. The closing price is $60.40 per share. The high for today was $60.80.
Coronavirus continues to affect many markets due to China being the major marketing nation. Many factories continue to be closed. With over 1000 deaths and more than 40,000 people confirmed with the disease, fear, as well as precaution, will likely mean that many industries will continue to be closed or have minimal operations for some time.
In spite of the negative news about coronavirus, it seems that stocks have recovered and people may be buying and selling as before. Record highs have been reached today. The Dow Jones reached a high of 29,276.82 when it gained 174.31 points. S&P 500 closed at 3,352.09 with a gain of 24.38. Nasdaq also closed high with 9,628.39, an increase of 107.88.
Before coronavirus, many companies in the U.S. began to show a greater interest in moving production back to the states. Now that coronavirus has impacted many industries, and tariffs, it seems that this idea is growing, says Bank of America. The temporary shutdown of many production lines and loss of the supply chain will certainly add fuel to the idea. Some companies have already started doing making a move to other countries. Although it may not happen immediately, investors will want to watch for this to start happening.