General Motors’ joint venture in Shanghai is reportedly having employees sleep on factory floors to remain operational during regional COVID-19 lockdowns. The facilities are operated collaborative by GM and state-owned Chinese partner SAIC Motor Corp, with government restrictions being in place until at least Friday. Due to the tens of million people affected, it’s one of the largest lockdowns instituted since the pandemic started.
Initially reported by Reuters, the situation was framed as GM finding a workaround to ongoing Chinese lockdowns while other companies simply stopped production. But that seems to be glossing over some of the relevant context, mainly that the plant is now loaded up with workers who are sleeping inside the factory and living in relative isolation to ensure the facility is compliant with China’s stringent zero-tolerance policy while still managing to remain competitive.
As luck would have it, automakers and suppliers in the region that failed to embrace similarly drastic measures were forced to close.
From Reuters:
A key auto supplier, Aptiv PLC, told workers at one of its Shanghai facilities that supplies Tesla and GM’s Shanghai joint venture to head home on Tuesday because of the need to enforce COVID controls, people briefed on the measure said.
The Aptiv closure came on the second day of a lockdown in Shanghai, home to 26 million people and a major hub for manufacturing of vehicles and other goods. The city has instituted tough controls on movements of people to try to control the spread of the highly infectious Omicron variant.
The lockdown, one of the biggest tests for China’s “zero-COVID” strategy, has forced automakers and suppliers to either try to adapt with extreme measures to keep factories running or to shut down and risk delayed shipments at a time when demand for vehicles is strong.
German auto supplier Bosch on Tuesday said its two plants in Shanghai are working with reduced personnel. “We are doing everything we can to maintain the supply chains as much as possible and to serve the demands of our customers,” the company said in a statement.
For global automakers and suppliers, the latest coronavirus-related disruptions in China, the world’s largest market, are piling on top of problems created by the war in Ukraine.
The measures GM took to keep its Shanghai plant open equate to a “closed-loop” management process, which China’s financial hub has asked companies to adopt to stay open during a two-stage lockdown to battle its outbreak.
The process mimics similar tactics utilized during the Winter Olympics in Beijing designed to separate personnel and participants from the general public. Workers are isolated in groups that share shifts and then live and work separately from the rest of society to minimize contact. Food is brought in from the outside and often cooked on the premises, though it’s unclear exactly what these arrangements entail. Some reports have employees sleeping on concrete flooring, while others claim cots have been placed in isolated corners of the factory.
The relevant GM facilities are responsible for the assembly of Buick, Chevrolet, and Cadillac products — all of which the manufacturer said were able to continue operations “normally” thanks to contingency plans made with suppliers to mitigate any future uncertainties related to COVID-19. However, there’s likely a limit to this if other facilities in the region are going down due to the stringency of the restrictions in and around Shanghai. Should lockdowns continue branching out, or if special permits start being revoked for delivery vehicles, supply shortages seem assured. That is unless more businesses adopt similar policies that keep workers from leaving the premises.
For now, companies like GM-SAIC and Apple suppliers (e.g. Foxconn, Shenzhen Deren Electronic, TLC Corp) are attributing their ability to remain operational during lockdowns to their adoption of the aforementioned management processes that have resulted in staff also becoming residents. Meanwhile, others (Aptiv for example) have opted to shut down operations temporarily to remain in compliance with government mandates.
Considering all the talk about global companies (including GM) utilizing Chinese slave labor in the past, it’s surprising this isn’t getting more negative attention from Western media. But it’s hard to get reliable reports on the living conditions inside these facilities, even if everyone who has visited an automotive plant would probably assume they’re less than ideal. China has long been infamous for allowing poor working conditions and new criticisms have emerged alleging that pandemic has been used to institute more government control over the citizenry. Though we don’t yet have a clear picture of what that looks like in terms of these euphemistic-sounding “closed-loop” systems beyond the occasional leak and whatever the relevant companies are telling us.
[Image: Linda Parton/Shutterstock]
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