Coronavirus: China’s small businesses ‘still losing blood’ despite creative means of retrieving stranded workers
- Sunwill in China’s Guangdong province has been able to bring back 60 per cent of its staff by sending buses to neighbouring provinces, cutting the quarantine to five days
- As of the start of last week, around 26,000 or half of the provinces major industrial firms with annual revenue of more than 20 million yuan, had restarted production
Every day over the past week, Sunwill human resources director Felix Luo has been busy sending long-distance coaches to neighbouring provinces to pick up employees from their hometowns to bring them back to their factory in Guangdong that produces air conditioner fans for the likes of Panasonic, Toshiba and Gree.
Sunwill has so far been able to restore its staffing levels to around 60 per cent, after around 700 workers returned from an extended Lunar New Year holiday and nationwide lockdowns to control the spread of the coronavirus.
For new employees, some villages in China have not even allowed workers to leave unless they find an employer who will cover transport costs, while others have warned workers that they will not be allowed to return if they choose to leave in search of work.
The period following the Lunar New Year is a traditional a time for migrant workers to go in search of new manufacturing jobs, often forming queues outside factory gates, however, the outbreak has made this tradition impractical.
“The biggest difficulty to fully restoring production capacity is the lack of workers,” said Sunwill chief executive Mo Yiyan, who hopes to restore full production capacity by the end of February.
“We have thought of a lot of ways [to find workers]. For example, we sent two coaches to the villages and towns where our workers live to bring them to the factory. Charted buses will be safer than public transport, helping to ease the worries of both the workers and their families, and even their village officials.”
Local governments across China are relaxing restrictions on resuming of work and focusing on pushing major industrial firms, mostly those with an annual revenue of more than 20 million yuan (US$2.8 million), to restart production, leaving a large number of small and medium-sized enterprises still struggling to restart operations.
These small plants, though, are needed by the larger manufacturers to produce components as part of their supply chain.
In Guangdong, as of the start of last week, around 26,000 or half of the provinces major industrial firms with annual revenue of more than 20 million yuan, had restarted production, although the authorities did not release figures for small and medium-sized enterprises.
“However, our production capacity also depends on the recovery capabilities of downstream suppliers,” said Xu Yuling, the company’s vice-general manager, who has noticed a rise in the cost of raw materials, logistics and labour amid the outbreak.
“If the output of our suppliers cannot catch up, our production capacity will still be limited.”
Galanz, one of China's biggest appliance makers that sends 70 per cent of its goods overseas, is still missing 20 per cent of its labour force despite needing to be at full capacity to deliver current orders on time.
According to president Liang Zhaoxian, Galanz is aiming to maintain the production capacity of most components and parts by relying on automation and partly paying suppliers up to a month in advance to reserve parts.
In Galanz’s 110,000 sq ft highly-automated plant, only around 400 workers are needed to operate 30 production lines, although this level of automation is hard to achieve for most small and medium-sized enterprises.
“Recruitment, price increases of raw materials, and the supply of masks must be paid for by ourselves. I had to cancel all the original orders as the workers could not come out from their hometowns. I don’t dare to restart production, although I still need to pay rent, taxes and other costs.
“Our small and medium-sized enterprises are still losing blood. But the virus situation now is too complicated, and a small factory like mine cannot handle it at all and meet the authorities’ requirements.”
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