On March 24th, in the factory of Wuhan Dongfeng Passenger Car Company, workers killed in the production workshop. Photography / Li Yuwang
"City of Manufacturing" looks forward to pressing the restart button
China News Weekly reporter / Zhao Yiwei
Issued in China News Weekly 941, March 30, 2020
"Resumed work but not unblocked, a large number of employees could not arrive, and the production line could not actually resume work." A head of the marketing department of Dongfeng Motor Group's Wuhan headquarters appeared somewhat helpless in an interview with China News Weekly.
In fact, Dongfeng Motor Group received approval for resumption of work as early as March 11. However, because Wuhan and Hubei are still closed, many people and logistics have not yet been opened, and construction cannot be started.
Dongfeng Motor Group under the closure of the city is just a microcosm of Wuhan manufacturing enterprises. Under the state of two months of downtime, Wuhan's economic pressure has been transmitted between the government and enterprises. As an indispensable part of China's manufacturing industry chain, Wuhan, a city that gathers well-known manufacturing companies in many fields such as automobiles, communications, electronics, and medicine, is facing severe challenges.
"The strategy of returning to work without unsealing will continue for a while." Ye Xueping, director of the Institute of Economics of the Hubei Academy of Social Sciences, speculated to China Newsweek that it still needs some to resume the labor-intensive manufacturing and service industries Time.
Like Dongfeng Motor, most of Wuhan's manufacturing companies are facing the risk of chain disruption. For example, Wuhan has a large-scale industrial cluster in the field of automobiles and parts, and it is a key connection point in the domestic and even global industrial supply chains. The shutdown of Wuhan's manufacturing industry has been hit hard, and the shock waves generated are gradually spreading to the global automotive industry.
Automotive supply chain will be hit hard
"At present, the workers in the depot have not returned to work. The factory has not yet started production. There are no people nearby." A person in charge of the Dongfeng Avenue Automobile Industrial Park has described the current state of the enterprise.
Under the shadow of the epidemic, Dongfeng Avenue in Wuhan Economic and Technological Development Zone did not see the crowds of the past. This 13-kilometre-long avenue is one of the most dense axes in the global automotive industry. It is known as the "ridge of car capital" and is the main industrial road with the highest industrial output value in Wuhan and even in Hubei Province.
Along the Dongfeng Avenue, there are nearly 20,000 companies, including 7 OEMs, 12 auto assembly plants, more than 500 parts and components companies, and 54 "World Top 500". The annual output of automobiles exceeds one million and the output of home appliances Over ten million units, the total revenue reached trillion-level.
The automobile industry has occupied Wuhan's first pillar industry position for nine consecutive years. In the more than two months after the outbreak, the Wuhan automobile industry centered on Dongfeng Avenue has almost completely stalled.
"Since the outbreak, Wuhan's automobile production lines have not been able to start construction." Ye Qing, deputy director of the Hubei Provincial Bureau of Statistics, told China News Weekly that the production lines of automobile factories require all workers to be on duty. Before the closure, workers cannot come together, and the assembly line cannot be opened. "
As the fourth largest automobile company in China's top 500 manufacturing companies, Dongfeng Motor Group is the leader in Wuhan's automobile industry and the largest corporate entity in Hubei Province. Its headquarters is located in Wuhan, with production bases and branches all over Hubei.
"More than half of the entire group's production capacity is in Hubei, of which 80% is in Wuhan." A head of the marketing department at Dongfeng Motor Group's Wuhan headquarters told China News Weekly that as of now, only the authorities in Wuhan are in office. , Other departments and production lines are still suspended.
Automobile companies with production bases in Wuhan are facing unprecedented difficulties. According to China Chengxin International, about 80% of Hubei's automobile production capacity is concentrated in Wuhan. From the perspective of production capacity distribution, 100% of the production capacity of Dongfeng Honda, Dongfeng Passenger Car and Dongfeng Renault under the Dongfeng Motor Group is in Wuhan, 76% of Shenlong Motor and 23% of SAIC-GM are in Wuhan.
Taking Dongfeng Honda, a three-vehicle manufacturing plant all located in Wuhan, as an example, if it starts from the Spring Festival holiday on January 22, Dongfeng Honda has lost more than 40 working days of production capacity. According to Dongfeng Honda's production and sales plan for this year, this is a loss of production of more than 100,000 units. Converted into economic losses, up to 25 billion yuan.
Every day of work stoppage, the entire Dongfeng Honda will lose 500 million yuan more. Previously, when Beijing Benz requested the government to resume work earlier, it also said that its suspension would result in a loss of 400 million yuan a day.
"At present, automobile companies in areas where Hubei has resumed work are mainly administrative offices, and there is no way to resume normal production." The aforementioned Dongfeng Motor Group Marketing Department official told China News Weekly that before the full return to work, automobile companies could not be determined. The downtime losses during the epidemic, "but to be sure, the losses are huge."
In addition, auto parts factories in Wuhan and Hubei are also an important part of the national auto industry chain. Except for Wuhan, areas with high production of automobiles or auto parts such as Xiangyang and Shiyan are all places where the epidemic is more serious.
"Before the Wuhan plant resumed production, it was difficult for the entire vehicle production line in Hubei and even the whole country to produce normally." The person in charge admitted to China News Weekly that Wuhan is an important assembly place for auto parts factories and that auto parts are suitable for use. The requirements are extremely high, and it is difficult to find a replacement in the short term. "Once the key components are missing, the vehicle production will face stagnation."
On March 12, when the China Automobile Industry Association held a monthly information conference, it said that due to the new crown pneumonia epidemic, domestic car production and sales in February were 285,000 and 310,000, respectively, a decrease of 80% from the previous month.
With the nationwide resumption of work, the auto industry is still affected. According to the China Automobile Dealers Association, as of March 17, the overall resumption efficiency of auto dealers nationwide was 58%, while the resumption efficiency of Hubei Province was only 38%.
"The production of passenger cars in Hubei accounts for more than 10% of the country, of which more than 80% of Hubei's output is in Wuhan." Ye Xueping, director of the Institute of Economics of the Hubei Academy of Social Sciences, analyzed to China News Weekly, "Wuhan ’s automobile The stagnation of the industry has a significant impact on the national automotive industry chain. "
Although in recent years, Wuhan's auto industry has been in a state of destocking and has not put all its production capacity into production, "but long-term shutdowns will still put a lot of pressure on the company itself and upstream and downstream." Ye Xueping added.
Crisis and Self-help of Supply Chain in Han Enterprise Manufacturing
Today, Wuhan still retains the thick background of "City of Manufacturing". This megacity with a population of over ten million is not only one of China's four major car capitals, but also has titles such as "China Optics Valley" and "National Optoelectronic Information Industry Base". It includes both traditional manufacturing industries such as steel and automobiles, as well as chips, High-tech manufacturing industries such as laser and medicine.
The deep manufacturing foundation has become an important force for self-help in Wuhan. During the epidemic, many manufacturing companies in Wuhan assumed an important role of "saving the city" and to a certain extent realized self-help.
As an extra large iron and steel joint venture taking root in Wuhan, Wuhan Iron and Steel Group is responsible for a number of basic energy supplies throughout the city. Since the outbreak in Wuhan, many subsidiaries of WISCO Group have almost never stopped their operations and continue to deliver various resources for the epidemic.
"China News Weekly" learned from Wuhan Iron and Steel Group that Wuhan Iron and Steel Co., Ltd., a subsidiary of the group, is the largest medical oxygen production company in Wuhan. It produced 24 hours during the epidemic and supplied medical oxygen to more than half of the hospitals in the city. Times.
In addition, in the construction of Vulcan Mountain and Lei Shenshan Hospital, Wuhan Iron and Steel Co., Ltd., a subsidiary of WISCO Group, sent more than 130 people to support the construction, and another subsidiary, Echeng Iron and Steel Company, supported more than 500 tons of steel. In terms of protecting people's livelihood needs, WISCO's power supply department and water supply department are also operating 24 hours to ensure the water and electricity supply in Wuhan urban area.
"The medical, steel and other resources provided by WISCO during the epidemic period were basically provided at extremely low prices, or even provided free of charge and unconditional support." Ye Qing, deputy director of the Hubei Provincial Bureau of Statistics, told China News Weekly. The resources provided have saved many people, and without their production supplies, the situation in Wuhan could be even more dangerous. "
In addition to state-owned enterprises, many private enterprises in Wuhan's manufacturing industry are also contributing.
Donghu New Technology Industrial Development Zone in the southeast of Wuhan, nicknamed "China Optics Valley", is one of the three intellectually intensive areas in China. .
Optoelectronic information, biomedicine, and medical equipment are the two pillar industries of Wuhan except for automobiles. During the epidemic, a large number of enterprises in these two pillar industries still maintained operations through various methods, provided technical support or supplied production, and some even achieved large-scale business growth.
Wuhan's local high-tech manufacturing enterprises have performed well. As one of the leading domestic infrared temperature measurement equipment, Wuhan Gaode Infrared Co., Ltd. experienced a surge in production during the epidemic, and supplied automatic infrared temperature detection equipment to Wuhan and the country at a production rate of 1,000 sets per day.
Before the outbreak, Gaode infrared temperature measuring equipment sold only a few hundred units a year, and now production and sales are showing rapid growth. In February only, 10,000 sets of temperature measurement equipment produced by Gaode Infrared have been installed in China. At the beginning of March, nearly 20,000 sets were installed. Recently, a large number of overseas orders have been received, and demand has been in short supply.
In addition, Wuhan's local high-tech information technology companies have also provided important support for Wuhan to achieve information-based epidemic prevention and control.
At the Office of the Epidemic Prevention and Control Headquarters in Wuhan Donghu New Technology Development Zone, there is an electronic information map that updates the epidemic prevention and control dynamics in real time. Developed by the local Wu Da Geao Information Technology Co., Ltd. As early as last June, this company was selected into the MIIT list by the Ministry of Industry and Information Technology.
"Since its launch on February 9, the system has assisted in the prevention and control of epidemics in more than 10 provinces and cities, including Hubei." Zhou Xiaoxia, director of the Marketing Department of Wuhan University, told China News Weekly that "a picture" , The local prevention and control command can grasp the key epidemic indicators in the area intuitively and accurately, and achieve precise prevention and control.
During the period from the outbreak of the urban area of Wuhan to the stabilization, the community B of Fozuling Street, with more than 4,000 people in the area, maintained the status of "outbreak-free community". The prevention and control system adopted by this community is a "smart grassroots" "Integrated social governance support platform" can help communities achieve sophisticated epidemic prevention and control.
"Since the system was launched in mid-February, it has provided help for epidemic prevention and control in Wuhan, Shandong, and Guangxi." Yan Xiaoxi, project manager of Wuhan Hongxin Smart Community, told China News Weekly, especially in Wuhan Under the order of "receivables and receivables", the system has greatly improved the efficiency of community statisticians and analysis of epidemic data.
However, in the "dormant" state of Wuhan, most of the production activities are still waiting for the full restart button to be pressed.
In terms of optoelectronic information, the three major industrial chains of communication optoelectronics, energy optoelectronics, and consumer optoelectronics built by Wuhan City have the world's largest production scale of fiber optic cables, accounting for 2/3 of the domestic market and 1/4 of the international market. Of the more than 700 optical communications vendors nationwide, about 200 are in Wuhan.
In the shadow of the epidemic, most R & D and production work in Wuhan's optical communication companies is still difficult to resume, and many companies' operating rates continue to hover at a low level, which is not enough to complete existing orders, and they face the risk of losing new orders and new customers.
"Under prolonged shutdowns, the position of Wuhan enterprises in the industrial chain and supply chain will inevitably be affected, and there is a risk of losing part of the market." Ye Xueping, director of the Institute of Economics of the Hubei Academy of Social Sciences, told China News Weekly. In the context of the country's resumption of work, Wuhan is still suspended, and upstream and downstream companies in the industry will tend to find alternative manufacturers to maintain the operation of the industry chain. "If Wuhan resumes work fully by the end of April, it means that it will lose almost a quarter of orders. It will have a profound impact on production and sales throughout the year. "
As an important manufacturing base in the country, Wuhan, although severely affected by the epidemic, will gradually reduce its impact on the manufacturing industry chain as the epidemic gradually weakens. For manufacturing companies, restructuring the supply chain crisis response system is a topic that they will have to face in the future.
Ye Xueping suggested that in the subdivided industries of the manufacturing industry, labor-intensive industries will be more affected, and high-tech industries will be less affected. "In the future, manufacturing companies will be more inclined to increase the proportion of intelligent technology and intelligent manufacturing in production lines to avoid risks caused by uncertainties such as the epidemic."
"China News Weekly" No. 11 of 2020
Disclaimer: Publication of "China News Weekly" manuscript is authorized in writing