Pegatron will double its efforts to accelerate production automation while improving its recruitment process to avoid a repeat of a mistake of misemploying student workers at its production lines in China, according to company president SJ Liao.

Liao was responding to concerns from investors about possible impacts of Pegatron allegedly violating Apple's Supplier Code of Conduct by misclassifying student workers and allowing some of them to work at night and overtime.

Liao said Pegatron will spend more on automating manufacturing facilities to create more value for the company and counter ever-rising labor costs in China.

The company will tighten its control of personnel budget, recruitment system and workforce management totally in compliance with regulations set by clients and local governments to prevent a repeat of similar mistakes, he said.

Apple reportedly has suspended Pegatron from new business deals until the manufacturing partner completes all corrections in accordance with its suppliers' conduct guidelines.

The impact of misemployment will be manageable for Pegatron, and the company is still busy fulfilling shipments of iPhone devices, according to industry sources.

Pegatron president SJ Liao
Photo: Shihmin Fu, Digitimes, November 2020