China Wage Conflict & Impact on Supply Chain

Tuesday, Aug 3 2010 8:00 AM to 10:30 AM AWST

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The Longemont

1116 West Yan An Road
Shanghai China

Speaker John So, Iris Duchetsmann, Michael McCool

Position: Director& General Manager, Senior Associate, Principal
Company: Control Risks, Salans, A.T. Kearney

Event Description

On August 3, the Council is organizing a new forum discussion on “China Wage Conflict & Impact on Supply Chain” by bringing HR specialists, risk experts and supply chain executives to discuss these issues.

The cost of running supply chains from China is going up. Coastal factories are increasing hourly payments to workers. Local governments are raising minimum wage standards. And if China allows its currency, the renminbi, to appreciate against the United States dollar later this year, as many economists are predicting, the relative cost of manufacturing in China will rise even more.

The shift was illustrated recently with the various strikes that took place at the Chinese plants of Honda and Toyota. Japanese companies, with their usually tight supply chains and their large number of interns, appear especially vulnerable to the industrial unrest. But Ingersoll-Rand which makes air conditioning systems, was also recently hit by a strike.

Following the recent crisis, Foxconn, the maker of iPhone, said that it was planning to double the salaries of many of its 800,000 workers in China, beginning in October. The new monthly average would be RMB 2,000. Honda also agreed to give raises of 24 to 32% at one of its plants in southern China ending a two-week strike. The new monthly average would also be around RMB 2,000, not counting overtime.

Still, salary increases are expected to affect many stages of the supply chain and force some companies to raise prices. For many exporters who simply produce on contract for global brands, profit margins are already razor-thin, and raising prices could hurt business.

When: Tuesday, August 3, 8:00am, 2010. to be finished around 10:30am
Fee: RMB 150 for Council members, RMB 300 for non-members. a breakfast buffet will be served at 8:00am.
Venue: The Longemont, 1116 West Yan An Road, Shanghai(上海延安西路1116号龙之梦大酒店)

No registration will be accepted by email, phone or fax.

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Event Owner
Cathy Chen
+86 (21) 62801329

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Davy on Jul 17, 2010 8:54 AM permalink
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China Wage Conflict & Impact on Supply Chain

Tuesday, Aug 3 2010 8:00 AM to 10:30 AM AWST

Speaker John So, Iris Duchetsmann, Michael McCool

Position: Director& General Manager, Senior Associate, Principal
Company: Control Risks, Salans, A.T. Kearney

Biography

Risk & Crisis Management in Human Resources and Supply Chain Management

- Understanding the risk you face
- Risk Management as part of your prevention mechanism
- Can you recognize when a simple labour dispute is turning into a major crisis?
- The importance of a localized Business Continuity Plan - particularly when you are dealing with HR issues.

John So, Director& General Manager, Control Risks
John joined Control Risks in March 2008 to head up the practice of Crisis and Risk Consulting for the Greater China Region. John has led numerous projects in the area of crisis management, business continuity, fraud investigation, fraud awareness training, and security risk assessment, and is frequently featured as speaker in conferences and seminars in the region. Together with his team of consultants, John has assisted many multinational companies on issues related to labour and commercial disputes.

Fare Share for Employees - Legal Perspective

China isn't a low cost labour source any longer. Workers are demanding their fair participation in the business growth. But what are the entitlements and legal working conditions? How may workers enforce their rights? Companies need to have strategies for dealing with labour disputes. Therefore it's worth having a look on the role of trade unions - are they furthering or mitigating disputes?

Iris Duchetsmann, Senior Associate, Salans

Iris Duchetsmann is a senior associate based in Salans’ Shanghai office. She heads the China labour law team. Iris specialises in labour law, particularly on aspects that involve cross-border employment and international HR management. She also provides advice on matters such as residency, tax, and social security. Iris has extensive work experience both in China and Germany, where she successfully passed the examination for a specialised lawyer in labour law and gained insight on corporate processes working as an in-house lawyer in the HR department of a multinational corporation. She sits as Vice Chair of the European Chamber of Commerce in China, Human Resources Forum.

High labour wage inflation

High labour wage inflation coupled with the impact of the recently introduced new labour law and recent industrial unrest is pushing Chinese labour rates higher. Though they are still a fraction of equivalent wages in Europe and the USA this upwards pressure will lead to erosion of competitiveness of China as a low cost country manufacturer. As a consequence of this manufacturing industries and supply chains are likely to see continuation of several important trends; the emergence of manufacturing clusters in Central China way from the high cost areas on the South and East coasts; competition from SE Asia and near-shore locations; and a search for labour efficiency. Nonetheless, China will remain dominant as a manufacturing base for the foreseeable future.

Michael McCool, Principal, A.T. Kearney

Michael McCool is a management consultant specializing in operations and supply chain transformation. He heads A.T. Kearney’s Hong Kong business and leads the operations consulting service in Greater China. Typical projects would include optimizing transport, logistics and inventories; defining regional manufacturing footprints; and launching new businesses in China.