Tesla, BMW shutdowns in China drag on
Tesla’s factory shutdown has stretched out to at least 12 days, much-needed semiconductors are piling up at manufacturers amid a shortage of truck drivers, and bankers are camping in their offices as Shanghai’s COVID-19 lockdown disrupts businesses in China’s financial hub.
Cases are at a record in the city, now the epicenter of China’s worst outbreak since the start of the pandemic, and the lockdown has been extended indefinitely.
Electric-car pioneer Tesla on Tuesday told some suppliers and workers that its Shanghai factory — which has been shuttered since the city went into a phased lockdown on March 28 — will remain closed at least through Thursday, according to people familiar with the matter, who asked not to be identified because the information is not public.
Following a separate a two-day shutdown in March, Tesla has now lost 12 days of production in recent weeks, including this week’s holiday. The first Gigafactory outside Tesla’s home country produced half of its vehicles last year, and builds cars not just for the lucrative Chinese market, but for export to Europe and elsewhere in Asia.
A spokesperson for Tesla China did not immediately respond to a request for comment.
Some companies, including chip giants Semiconductor Manufacturing and SMIC, as well as iPhone assembler Pegatron have been able to keep plants running by implementing a so-called closed loop system where workers live on-site and are tested regularly. For the likes of SMIC, a new headache is emerging: securing the trucks they will need to get their chips to clients. A representative for SMIC declined to comment on logistics.
South Korean companies are also being affected, with operations at the Shanghai plants of noodle maker Nongshim, confectionery manufacturer Orion and cosmetics producer Amorepacific suspended since early this month. The companies all told Bloomberg News that they have been following instructions from local authorities and do not know when they can reopen.
Singapore’s Spindex Industries, which supplies precision components used by the automobile industry, has extended the closure of its Shanghai plant until April 10 or whenever local authorities allow work to resume. The uncertainty over the extension of the lockdown is expected to have a negative impact on the company’s financial performance, it said in an exchange filing.
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