China strongly blocked Covid-19, causing Apple, Toyota and Volkswagen to halt production
The Chinese government’s drastic Covid-19 containment measures over the past two years are forcing many companies to stop production. With names like Foxconn, one of Apple’s main suppliers, affected Toyota and Volkswagen factories, the global supply chain faces new concerns.
Pursuing a zero covid strategy, a number of Chinese cities and provinces are tightening their movement restrictions to curb the spread of the disease, most notably Shenzhen, the technology hub of China. China.
Seen as China’s Silicon Valley, the city is seeing dozens of new cases every day. This prompted city officials to shut down the public transportation system and advise people to work from home as much as possible.
Foxconn said that its factory in Shenzhen has stopped all operations until further notice, adding that it will deploy backup factories to minimize disruption.
A Reuters source said the government would allow companies to operate if they could create a “closed management” system where employees work and live in a closed bubble. Such a system was implemented during the Winter Olympics in Beijing.
Another company, Unimicron Technology Corp., said its factory that makes substrates for chips and circuit boards in Shenzhen had also stopped working. This is also one of the partners of Apple, Intel.
The restrictive measures are having consequences beyond the city and spreading to Guangdong province, said Paul Weedman, who operates manufacturing consulting firm Victure Industrial in Shenzhen. Many orders from his customers have been stopped and factory visits canceled, he said.
“Imagine you have a factory with 100 people and suddenly you can’t do anything – you can’t fulfill existing orders and you can’t take new ones. The impact doesn’t just last 2 or 2 years. 3 weeks, but 3 to 6 months.”
Meanwhile, Shenzhen’s Yantian International Container Terminal, one of China’s busiest ports, said on WeChat that it was still operating normally, even though the two companies have warehouses at the port. This said they had to stop working.
Many cities are also introducing restrictive measures to varying degrees. For example, the city of Changchun, the capital of Jilin province in northeastern China, has also been locked down. Shanghai’s schools have also been closed, and in the manufacturing hub Dongguan, public transport has also been halted.
Foreign partners also quickly felt the impact of these strict restrictive measures.
Toyota said its joint venture with China’s FAW Group had also stopped production in Changchun, while its division in the city of Tianjin remained unaffected.
Volkswagen said another of its joint ventures with FAW Group had also halted production at vehicle assembly and component factories.
Refer to Reuters
at Blogtuan.info – Source: genk.vn – Read the original article here
