Shanghai lockdown hits Nanjing auto industry

Placeholder while loading article actions

NANJING, China — On a balmy Wednesday afternoon, two young men ventured out of their dorm to an industrial park to get their hair cut.

They had time off as a lockdown in the city of Shanghai, more than 225km away, had upended manufacturing supply chains nationwide. Their city of Nanjing had reached “zero covid”, but their factory was still struggling to source supplies from Shanghai to manufacture its products.

“We only have two shifts this week,” said one of the workers, Cheng Zhengquan, 18, from the Bosch factory, which makes automotive steering systems. “Usually we worked six days a week.”

Autos are just one of many industries disrupted by the month-long lockdown of Shanghai, a key financial and manufacturing hub. China’s adherence to a strict zero covid policy is hampering economic growth, and workers across the country are feeling the effects. Overseas consumers can also expect product shortages and price hikes in the coming months.

The American Chamber of Commerce in China surveyed its members in late March and found that 86% of responding manufacturers reported supply chain disruptions following the latest lockdown.

Shanghai covid headquarters: food shortages, talking robots, hungry animals

Irina Ananyeva, a spokeswoman for Bosch, the majority owner of the Nanjing plant, said the company was facing production problems in several Chinese cities due to covid shutdowns, including the suspension of a factory. Shanghai and reduced production in Nanjing.

“Bosch is doing everything possible to maintain supply chains and meet customer demands,” she said. The company supplies car manufacturers such as Volkswagen, Honda and Mercedes-Benz.

Richard Yu, consumer and automotive chief at tech giant Huawei, also warned this month of the economic fallout.

“If production remains suspended in Shanghai after May, all tech/industrial sectors that have ties to Shanghai’s supply chain will all have to cease production, especially the automotive sector!” Yu wrote in a social media post.

A city of lush greenery and 9.4 million people, Nanjing has recorded no new covid cases in the past two weeks – achieving the much-vaunted “zero covid” status. But the city is in the densely populated Yangtze Delta, which also includes Shanghai, and it remains in siege mode. Earlier this month, a sports stadium in Nanjing was turned into a 700-bed field hospital, with rows of blue beds – a grim acknowledgment of the imminent possibility of a new outbreak.

While life in Nanjing is normal for many, with locals gathering to play cards and dance, parts of the city remain under tight control. Many college campuses remain in “closed-loop” operation, meaning students have been unable to leave for weeks, even though no one has tested positive. One day last week, two students from Hohai University in Nanjing stopped by a fence to chat with friends outside who handed them snacks through the metal bars.

“We’ve been here a long time,” said one of the students, a young woman who spoke on condition of anonymity to discuss school policies that haven’t been widely publicized. “We don’t know when we can get out.”

Many factories have also turned to “closed loops” to allow production to continue during the lockdown, with workers having to stay on site 24/7. Video posted by Bosch Huayu of one of its factories in Shanghai operating in closed loop showed a row of blue sleeping bags on the floor where employees slept, along with activities like movie nights to try to keep them entertained.

Ananyeva, the Bosch spokeswoman, said only a third of Shanghai’s 3,000 production workers were working due to the lockdown. She said another Bosch factory in Taicang, located between Shanghai and Nanjing, is also closed.

Michael Hart, chairman of the chamber, said manufacturers producing under closed-loop conditions were typically only able to achieve less than 50% of normal output, due to difficulties getting enough workers and supplies into factories. . Leaders were also concerned about the workers’ toll.

“Any company that has closed-loop workers — they say those workers are under immense pressure,” Hart said. “Because they can’t go home… there are concerns about mental health and just general safety.”

In the Nanjing Economic and Technological Development Zone – where Cheng had his hair cut while his factory was idle – workers are largely allowed to come and go. But South Korean electronics giant LG operates a battery factory here under closed-loop management, according to an announcement by local authorities, in part to be able to bring in workers from overseas.

Local authorities last month gave the green light to the arrival of 105 LG employees from Korea on a charter flight to work in a closed loop, according to the announcement.

Sending personnel to China has been a top concern for multinational companies, Hart said, along with onerous entry requirements. James Zimmerman, a partner in the Beijing office of Perkins Coie LLP, said he had to stay for 37 consecutive days in quarantine centers to travel to Beijing from abroad to renew his annual work visa, despite testing negative for covid throughout. He said the rules had become much stricter since last year, when he was able to return to Beijing after just 14 days in quarantine.

“For medical reasons, I beg the community to allow me to quarantine at home,” said Zimmerman, who underwent open-heart surgery in December and said he could not leave quarantine. before May 2.

As in many parts of the country, businesses in the Nanjing Industrial Park have struggled to source and ship products. On April 15, a shipment from Nanjing Electric’s factory in the park was stopped en route to Shaoxing city, according to local newspaper Nanjing Daily. Nanjing Electric vice president Li Tingbiao said the newspaper’s officials made urgent requests to the industrial park to clear the cargo.

A few pockets of the industrial park have been locked down as recently as this month, and mass testing is being carried out regularly. All incoming freight trucks must register in advance. Depending on their destination, drivers of some outbound trucks are sometimes sealed with a sticker to ensure they cannot be infected en route.

As workers at the industrial park returned to their quarters one evening last week, a loudspeaker hanging from the door played a looping reminder: “Wear your mask, take your temperature, wash your hands frequently.”

Cheng, the auto components worker, said while the company was not closed, workers were encouraged to stay indoors as much as possible.

“I spend a lot of time playing on my phone,” he said.

Lyric Li in Seoul contributed to this report.

Comments are closed.