Determined to keep abreast of affairs throughout the country, President Susilo Bambang Yudhoyon has installed a 'situation room' at the Presidential Palace. (Antara Photo/Widodo S. Jusuf)

“ … Here is another one. A change in what Human nature will allow for government. "Careful, Kryon, don't talk about politics. You'll get in trouble." I won't get in trouble. I'm going to tell you to watch for leadership that cares about you. "You mean politics is going to change?" It already has. It's beginning. Watch for it. You're going to see a total phase-out of old energy dictatorships eventually. The potential is that you're going to see that before 2013.

They're going to fall over, you know, because the energy of the population will not sustain an old energy leader ..."
"Update on Current Events" – Jul 23, 2011 (Kryon channelled by Lee Carroll) - (Subjects: The Humanization of God, Gaia, Shift of Human Consciousness, 2012, Benevolent Design, Financial Institutes (Recession, System to Change ...), Water Cycle (Heat up, Mini Ice Ace, Oceans, Fish, Earthquakes ..), Nuclear Power Revealed, Geothermal Power, Hydro Power, Drinking Water from Seawater, No need for Oil as Much, Middle East in Peace, Persia/Iran Uprising, Muhammad, Israel, DNA, Two Dictators to fall soon, Africa, China, (Old) Souls, Species to go, Whales to Humans, Global Unity,..... etc.)
(Subjects: Who/What is Kryon ?, Egypt Uprising, Iran/Persia Uprising, Peace in Middle East without Israel actively involved, Muhammad, "Conceptual" Youth Revolution, "Conceptual" Managed Business, Internet, Social Media, News Media, Google, Bankers, Global Unity,..... etc.)
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Wednesday, February 27, 2013

Mounting labor costs forces Nike to relocate in China

Want China Times, Staff Reporter 2013-02-27

A worker in a shoe factory in Hangzhou. (Photo/Xinhua)

A Guangdong shoe manufacturer for the leading US brand Nike has cut its work force to 4,000 from 13,000 since the global financial crisis five years ago, China Business News reported on Feb. 26.

The factory has no recruitment plans even in the current hiring season after the Chinese New Year holiday, said the factory manager, surnamed Wu.

Nike paid its workers US$200 a month in the 1990s, when plants came to China from Taiwan, Wu said. Labor costs have rocketed after the financial crisis, now over US$500 a month. The pay well exceeds Indonesian salaries at US$300 and Vietnam's US$250 a month, Wu added.

"We have lost part of our orders as Nike would not pay a cent more if it could strike a deal without that cent," Wu said. "If I felt like taking a risk, I could have kept about 10,000 employees. But this means we would have to pay an extra US$2 million each month to prevent orders from going to Indonesian competitors."

Rising labor costs and intense competition have put sportswear giants, such as Nike and Adidas, in a dilemma about slashing profits or making fewer products.

Another Guangdong manufacturer who has contracts with Nike told China Business News that it plans to raise quotes because minimum wages in China have skyrocketed over recent years. The manufacturer also admitted that it was very likely to receive fewer orders.

A pair of sports shoes manufactured in Guangdong costs US$1 to US$2 more than those made in Indonesia or Vietnam. Nike still leaves a reasonable amount of orders to Guangdong shoemakers because of quality standards, and the domestic market is still promising despite a 6% decrease in orders from China for five months through April 2013, a Nike contract manufacturer said.

Statistics compiled by China Business News showed that in 2001, China made 40% of Nike's sneakers and Vietnam 13%. In 2005, China's contribution declined to 36% while Vietnam's climbed to 26%. In 2009, Vietnam caught up with China, both individually making 36% of all Nike sneakers. In 2010, Vietnam overtook China, making 37% of Nike's sneakers versus 34% by China.

Sourcing raw materials for sneakers and sportswear and their assembly lines are easier to standardize, giving Nike leverage to move its production base to China's hinterland and Southeast Asian countries, said Li Peng, Asia Footwear Association secretary general.

Nike has established five production sites in Jiangxi province, employing tens of thousands of workers.

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