Chinese commuters, all wearing protective masks, ride bikes and scooters in Beijing on Monday, ... [+]
Foxconn Technology Group is trying to woo workers back to their iPhone and tech gadget assembly lines with a roughly $500 bonus; double that for new hires. The company, like others, are at least two weeks behind on orders due to lockdowns and factory closures on account of the coronavirus epidemic emanating from Hubei province.
As of Tuesday morning, there have been no blockbuster increases in the number of new cases, now standing at 77,660 in mainland China, with 2,704 deaths, of which 2,563 of them occurred among patients in Hubei.
According to a story in the South China Morning Post this morning, Foxconn said the closures will have an impact on the company’s revenues.
“We can confirm that the virus-related production schedules will have a negative impact on our annual revenues,” Foxconn said in a written statement in response to enquiries by the Post.
The Shanghai Composite Index settled 0.6% lower on Tuesday. The XTrackers China CSI-300 A-Shares (ASHR) is up 1.53% in the pre-market.
U.S. companies are also facing the brunt of the coronavirus’ impact on their supply chains. Los Angeles based shoemakers Q4 Sports says their China suppliers have not returned to work.
“We work with tons of suppliers in China,” says Aaron Sokol, CEO of Q4 Sports. “In the high performance shoe business, you’re looking at over 100 pieces that have to be sewn together for one shoe, and are dealing with multiple suppliers to get that done. Even if our mainland factories were open, their China suppliers are still not back to work,” he says.
As an example of the coronavirus fears spreading, Sokol said he was advised to cancel a business trip to Japan in two weeks, and a road show for new clients in China.
Aaron Sokol (red), CEO of Q4 Sports on a trip to China's Great Wall with some NBA players and Q4 ... [+]
The company makes specialty designed sneakers modeled and labeled for pro athletes, rappers and actors.
“On a scale of one to 10 with 10 being the worst supply chain disruption, I’d give the coronavirus an 8-plus,” he says.
China’s workers aren’t rushing back to work. Metro lines and railroads in and out of China’s tier 1 and tier 2 cities remain at 85% below that of where they were a year ago.
Here’s some high frequency data showing the world’s No. 2 economy is still on hold. Beijing data not complete so was removed from this chart at this time. Beijing travel data should return on Wednesday.
