Faurecia is one of the lucky ones: the French manufacturer of automotive components has been included in the list of 666 companies authorized by the municipality of Shanghai to resume production from this week. The beginning of an obstacle course for the company: “The complexity is that the automobile works with supply chains with four or five levels, explains François Tardif, Executive Vice President of Faurecia in China. In the first list, they authorized automakers and their tier one suppliers, that is, three factories for us. But we also have tier two factories that have not been identified. For example, our final seat assembly plant is allowed to operate, but not the one that produces the metal frame of the seats. We had to apply for that one. Each situation becomes a particular case, to be solved: the teams spend hours organizing the transport of a part, from a supplier to ours, or from ours to a manufacturer”develops Mr. Tardif.
After three weeks of strict confinement for the Chinese economic capital, the cost appears increasingly heavy, and affects supply chains throughout the country. In Shanghai, most companies had to suspend production for several weeks, including Tesla, Volkswagen, or Pegatron, an Apple subcontractor that assembles iPhones. In an attempt to limit the damage, the central government decided on Friday, April 15, to authorize a few hundred companies to resume work, in the strategic sectors of chemicals, medical, semiconductors and automobiles.
Because the Chinese economy is seized up: Monday, April 18, Beijing announced growth of 4.8% in the first quarter, but experts believe that activity began to fall from March, when several cities, such as Shenzhen in the South, or Changchun, a major center of industrial production, in the Northeast, have imposed strict confinements. With that of Shanghai in April, the impact should be even greater. On Monday evening, China’s central bank announced a series of measures to encourage financial institutions to support businesses, the struggling real estate sector, and finance local government infrastructure projects, which will be used to support growth. A recovery which will only have effects if the activity is not prevented by the confinements.
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