As the death toll from the newly named COVID-19 illness topped 1,000, global supply chains remain widely disrupted for businesses across the world that have built deep connections to China.
Much of China remains on lockdown. Even factories that are open must contend with logistical bottlenecks and labour shortages as travel restrictions prevent employees from returning to work after the Lunar New Year. That's all worrisome news for multinational companies that have grown to depend on China for everything from auto parts to toys.
Executives at athletic gear maker Under Armour warned that the outbreak is delaying shipments of fabric, packaging and other raw materials from China and will reduce first-quarter revenue by up to $60 million. Toyota spokesman Eric Booth said the company's plants there are preparing to resume operations as early as next week. And General Motors said its joint-venture partners in China plan to restart production Feb. 15.Beijing is trying to limit the economic damage from the coronavirus, which is expected to savage economic growth in the January-March quarter and leave 2020 growth well below the 6% -- already the lowest figure since 1990 -- that economists had expected.
Koray K├╢se, senior director of supply chain research at the Gartner consultancy, said companies need to better assess the risks involved in manufacturing in China and other developing countries.
Source: Financial Digest (financialdigest.net)
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