Shanghai lockdown hits Nanjing auto industry – The Washington Post

NANJING, China — On a balmy Wednesday afternoon, two young men ventured out from their dorm in an industrial park for haircuts.

They had free time because a lockdown in the city of Shanghai, more than 140 miles (225 km) away, had upended manufacturing supply chains nationwide. Their city of Nanjing had achieved “zero covid,” but their factory was still struggling to get supplies from Shanghai to build their products.

“We only have two shifts this week,” said one of the workers, Cheng Zhengquan, 18, at the Bosch factory, which makes automotive steering systems. “Usually, we’d work six days a week.”

Autos are only one of many industries disrupted by the month-long lockdown of Shanghai, a key financial and manufacturing hub. China’s adherence to a strict zero covid policy is hampering economic growth, and workers across the country are feeling the effects. Overseas consumers can also expect to see product shortages and price hikes in coming months.

The American Chamber of Commerce in China conducted a member survey in late March and found that 86 percent of responding manufacturers reported supply chain disruptions from the latest lockdown.

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Irina Ananyeva, a spokeswoman for Bosch, the Nanjing factory’s majority owner, said the company faced production problems in several Chinese cities due to covid lockdowns, including the suspension of a Shanghai factory, and reduced production in Nanjing.

“Bosch is doing everything possible to maintain the supply chains and to serve the demands of the customers,” she said. The company supplies automakers such as Volkswagen, Honda and Mercedes-Benz.

Tech giant Huawei’s head of consumer and auto business Richard Yu also warned this month of economic fallout.

“If production remains suspended in Shanghai after May, all tech/industrial sectors that have links to the Shanghai supply chain will all have to cease production, especially the auto sector!” Yu wrote in a social media post.

A city of lush greenery and 9.4 million residents, Nanjing has recorded no new covid cases in the past two weeks — achieving the vaunted “zero covid” status. But the city sits in the densely populated Yangtze Delta, which also includes Shanghai, and it remains in siege mode. Earlier this month, a Nanjing sports stadium was transformed into a 700-bed field hospital, with rows of blue cots — a grim recognition of the looming possibility of a fresh outbreak.

While life in Nanjing is normal for many, with residents gathering to play cards and dance, some parts of the city remain under strict controls. Many college campuses remain in “closed-loop” operation, which means students have not been able to leave for weeks, despite no one testing positive. One day last week, two students of Nanjing’s Hohai University stopped by a fence to chat with friends on the outside who handed them some snacks across the metal bars.

“We’ve been in here a long time,” said one of the students, a young woman who who spoke on condition of anonymity to discuss school policies that have not been widely publicized. “We don’t know when we can come out.”

Many factories have also turned to “closed loops” to allow production to continue through lockdown, with workers required to stay on-site 24/7. A video posted by Bosch Huayu of one of its factories in Shanghai in closed-loop operation showed a row of blue sleeping bags on the floor where employees slept, as well as activities like movie nights to try to keep them entertained.

Ananyeva, the Bosch spokeswoman, said only a third of the 3,000 production staff in Shanghai were working due to the lockdown. She said another Bosch factory in Taicang, situated between Shanghai and Nanjing, is also in a closed loop.

Michael Hart, the chamber’s president, said manufacturers producing under closed-loop conditions could usually only achieve less than 50 percent of normal output, because of difficulties getting enough workers and supplies into the factories. Executives were also concerned about the toll on workers.

“Any companies that have workers in a closed loop — they say these workers are under immense pressure,” said Hart. “Because they can’t go home … there is concern about mental health and just safety in general.”

In the Nanjing Economic and Technological Development Zone — where Cheng was getting a haircut as his factory idled — workers are largely allowed to come and go. But South Korean electronics giant LG is operating a battery factory under closed-loop management here, according to an announcement by local authorities, partly so it can bring workers in from overseas.

The local authorities last month greenlighted the arrival of 105 LG employees from Korea on a charter flight to work in a closed loop, the announcement said.

Getting staff into China has been a top concern of multinational businesses, Hart said, with entry conditions onerous. James Zimmerman, a partner at the Beijing office of Perkins Coie LLP, said he is being required to remain for 37 consecutive days in quarantine centers to get to Beijing from abroad to renew his annual work visa, despite testing negative for covid throughout. He said the rules have become far stricter since last year, when he was able to return to Beijing after only 14 days in quarantine.

“For medical reasons, I am pleading with the community to allow me to quarantine at home,” said Zimmerman, who had open-heart surgery in December, and who said he will not be able to leave quarantine until May 2.

As in many parts of the country, companies in the Nanjing industrial park have struggled both to get supplies in, and to ship products out. On April 15, a shipment from Nanjing Electric factory in the park was stopped en route to the city of Shaoxing, according to the local Nanjing Daily newspaper. Nanjing Electric’s vice president Li Tingbiao told the paper managers made urgent requests with the industrial park to get the shipment cleared.

A few pockets of the industrial park were locked down as recently as this month, and mass testings are carried out on a regular basis. All inbound cargo trucks are required to register in advance. Depending on their destination, the drivers of some outbound trucks are sometimes sealed in with a sticker to ensure they cannot be infected en route.

As workers in the industrial park returned to their quarters one evening last week, a speaker hanging on the gate played a reminder on a loop: “Wear your mask, take your temperature, wash your hands frequently.”

Cheng, the auto component employee, said though the company was not locked down, workers were encouraged to stay indoors as much as possible.

“I spend a lot of time playing on my phone,” he said.

Lyric Li in Seoul contributed to this report.