Delta (2308) Chairman Hai Yingjun said in an interview with the Financial Times that Delta aims to reduce the company’s direct employment in mainland China by 90%, and is now on track to have cut 40% of its manpower.
The Financial Times pointed out that, by the impact of the U.S.-China trade war production costs rise, Taiwan‘s electronics industry has cut back on operations in mainland China, as Apple (Apple) and tesla (Tesla) components supplier Delta, but a significant reduction in local manpower.
Hai Yingjun told the Financial Times that even if there is no U.S.-China trade war, for the manufacturing industry, mainland China is no longer a good place. He cited the example of China’s rising wages and high staff turnover rate; while Delta is building four large factories in India, Hai Yingjun said, compared to the stability of Indian employees is relatively high.
The Financial Times quoted Hai Yingjun talk: “Our goal in mainland China is to reduce 90% of direct employment, we have not yet reached this goal, has done to reduce 40%.”
The Financial Times pointed out that the United States requires suppliers to diversify operations, reduce the pressure of a large number of concentrated in mainland China, as well as China’s own labor costs increased, prompted such a change. But Hon Hai is relatively much more low-key and reluctant to talk much about the shift in mainland China’s layout for fear of angering Beijing authorities.
After the U.S. imposed a 25% tariff on Chinese products in 2019, Delta moved the manufacturing of telecom power equipment back to Taiwan and to Thailand, and is now building four large factories in India, ready to produce solar power converters and industrial automation equipment for the Indian market; information technology and communications products are planned for export.
HAI Yingjun stressed that although the production of more sensitive products such as telecommunications-related equipment moved out of mainland China, but other products such as mass computer components, remain in mainland production.
Hai Yingjun said, “We keep our local factories, which can be converted to automation.” He said that the complete supply chain is still the advantage of mainland manufacturing.
Recent Comments