[NTD, Beijing, April 17, 2022]On both sides of the Donghai Bridge in Shanghai, China, on one side is the Yangshan Deepwater Port, and on the other side are a large number of industrial enterprises in Lingang. Affected by the epidemic in Shanghai, many companies have been forced to shut down, and although others are barely able to continue to operate, they are struggling due to various crises. Many auto giants have set up factories in Shanghai and Jilin, so the industrial supply chain has been particularly affected by the epidemic.
On April 16, an article titled “Middle-aged men won’t ask for help unless they have to do it” was circulated on Sina, Tencent and other portal websites and Weibo and other online social media. Various difficulties and crises faced in a wave of epidemics.
According to the article, before the outbreak, the Shanghai Yangshan Deepwater Port had 50 containers of cargo per day, which belonged to a company established in China by Bosch, a well-known German technology and service provider. Various raw materials, including auto parts, are unloaded at the Yangshan deep-water port, processed by factories in Shanghai, Suzhou and other places through the developed expressway network, and are continuously supplied to auto companies all over China.
In Shanghai, there are also giants in the automotive industry chain such as ZF, Aptiv, and CATL, which are busy producing various auto parts, ranging from automotive glass seals and chips to power batteries and even engines. However, since the outbreak of the CCP virus (COVID-19), the supply chains of these automakers have been severely challenged.
According to the article, asymptomatic infections began to appear in Bosch’s Suzhou plant in February this year, resulting in a serious decline in the production and sales of many car companies in February, so much so that even Chen Yudong, president of Bosch China, was in a hurry to personally bring the truck to the Bosch plant. Waiting at the door for parts to arrive. Because the first-tier suppliers need to wait for the materials of the second-tier suppliers, the transportation link is only half a day late, and the production capacity of 20,000 vehicles will be gone. Now, the automobile industry is affected by the Shanghai epidemic, and it is no longer a simple problem that is a long time later.
First of all, the continuous outbreak of the Shanghai epidemic made it impossible for workers to return to work normally. Even if some companies adopt a closed-loop management approach to insist on production, they are facing various unexpected difficulties and are paying a heavy price.
For example: a chip company in Shanghai, after 20 days of closed-loop management, still had positive infections, and had to temporarily suspend work; the boss of another factory said that in order to fulfill the requirements of closed-loop management, the employees of their factory ate and lived in the factory. The cost of a day for a worker is now 600 to 800 yuan, resulting in a labor cost of 25 million yuan for the factory for half a month.
Jilin and Shanghai are China’s major auto cities, and both are hardest hit by the new wave of the epidemic.
Statistics show that FAW alone has more than 200 first-tier suppliers and more than 700 second-tier suppliers, which means that businesses in this industry chain will be directly or indirectly affected by the epidemic. Recently, SAIC, Brilliance, and Volkswagen have all been in a hurry.
Tesla’s Shanghai Gigafactory has been shut down twice in March this year. Throughout March, Tesla assembled nearly 13,000 fewer vehicles in Shanghai than it did in January.
Weilai’s car production plant had been cut off in mid-March, and it had stopped production until early April, relying on hoarded materials. According to their sales volume of 10,000 units in March, the suspension of work for one month will lose about 40 small targets. And the problem of blocked transportation is more serious than the challenges posed by the shutdown.
Many supply chain companies are now forced to change their original transportation routes. At the same time, they have to find ways to obtain Shanghai passes. Some suppliers even threatened SAIC, “If you don’t give me a certificate, you will cut off the supply.”
At present, whether it is a vehicle company or a supply chain company, the demands are almost the same. The first is to allow employees at least core employees to go to work in the community; the second is that the factory does not have long-term living conditions, and closed-loop production is not a long-term solution; the third is to ensure smooth logistics and reduce license management.
According to the data: FAW Group has 280,000 employees, SAIC has more than 200,000 employees, the number of workers in Tesla’s Shanghai factory has reached 19,000 after the expansion, and the number of workers in Weilai’s first factory is also close to 3,000. Coupled with the fact that hundreds of supply chain companies, the livelihoods of countless car company employees and their families, are facing a serious threat from the epidemic, the seriousness of the consequences can be imagined.
He Xiaopeng, the founder of Xiaopeng Motors, posted a circle of friends two days ago, saying that if Shanghai and surrounding supply chain companies cannot find a way to dynamically resume work and production, all OEMs in China may stop production in May. In the past two months, many car companies have publicly or privately expressed that they are unable to produce.
Xu Daquan, vice president of Bosch China, one of the world‘s largest auto parts suppliers, said that when the chip factory in Malaysia was closed due to the epidemic in August last year, he was so anxious to pull President Chen Yudong to jump off the building, but Chen was unwilling. Now Chen Yudong also admits that he must resume work and production as soon as possible. If the situation is not relieved after two weeks, “there may be no chance to jump.”
(Editor in charge: Li Ming)
URL of this article: https://www.ntdtv.com/gb/2022/04/16/a103402423.html