Bad Omen: Shutdown Extended in China's Manufacturing Heartland

If you recall our piece from yesterday, automakers like Nissan are counting on Chinese workers to return to their factories on February 21st, thus preventing a widespread parts shortage that could idle plants on a global scale. That date would be the first day of resumed work in Hubei province following a government-mandated shutdown of all facilities — a tactic aimed at halting the spread of novel coronavirus.

If workers return Friday, the thinking went, the supply chain disruption currently afflicting the world’s automakers won’t be too bad. Well, bad news.

China now says Hubei won’t come online until March 11th.

As reported by Reuters, the province has asked its workplaces to stay shuttered, with only those providing essential public services allowed to open their doors. That list includes, obviously, workplaces tasked with getting a handle on the viral outbreak. Schools will remain closed and presumably all factories will, too.

A report in Bloomberg Wednesday said Nissan sources 800 vehicle components from Hubei, with sources claiming plant shutdowns will begin in Japan as early as Feb. 23 if workers don’t return on the 21st. Other automakers face similar hurdles. The likes of Hyundai and Fiat Chrysler have already seen non-Chinese plants go dark in response to the parts disruption.

Thus far, no North American plant has had to stop production, though a UAW local warned last week that General Motors’ U.S. truck plants could be in danger if the coronavirus crisis continues into March. A GM spokesperson soon responded, claiming the automaker was doing what it could to locate other sources.

A growing concern in the region is a new outbreak in South Korea, linked to a “super-spreader” who was a member of a religious sect. One person died in that country Thursday as the number of infected rose above 100.

“We are seeing infections in some areas like Seoul and Daegu where it’s difficult to confirm the cause or routes of the infections,” South Korea’s vice health minister Kim Gang-lip told the Associated Press. Some 2.5 million people living near the epicenter of the new outbreak have been told to stay home and not venture outdoors.

Should the outbreak spread, it would put that country’s factories — and output — in peril.

[Image: IHOR SULYATYTSKYY/Shutterstock]