Mitigating Fraud & Corruption in China Operations

WEBINAR:

Mitigating Fraud & Corruption in China Operations:

What are the best Corrective Actions and How can we address on-going risk?

Mitigating Fraud and Corruption in China Operations:

About The WEBINAR

Who Should Attend?

Executives of U.S. manufacturing companies:

- - - U.S. & European executives with China-based operations, looking to prevent or remedy instances of fraud and corruption.

Why Companies Like Yours Are Attending

You’ll hear guidance to assess and address fraud and corruption that may exist right now within your China operations. The financial and reputational risks to your people and your brand in China would not be limited locally, but could easily expand, damaging your reputation globally.

Why Is This Webinar Important NOw?

- Recently publicized risks to business travelers to China.
- A new, unpredictable business environment there.
- U.S./China political tensions. Years of China COVID restrictions.

All these have made normal, prudent oversight of China operations difficult, to say the least. Assessing your China operations and demonstrating support to your people there – in person – is important. Not just to manage smooth and efficient operations, but also to identify and minimize instances of fraud and corruption.

Association of Certified Fraud Examiners’ international research indicates that organizations lose 5% of revenue to fraud each year, and 84% of fraudsters display at least one behavioral red flag. But frequent in-person travel to China remains a challenge. There you are, operating in China… with limited oversight. What could go wrong?

In our webinar, seasoned executives with real-life manufacturing experience in China – and a skilled professional with deep forensic expertise in China – talk about how to mitigate risk in your China operations.

Speakers answer registrants’ questions, including:

1. How different is China today from the business-friendly environment pre-Covid?
2. What are your forensic people in China actually finding?
3. How well-founded are the recently publicized risks of travelling to China to oversee our operations?
4. Are there “red flags” we can look for to infer fraud or corruption in our China operations without actually going there?
5. What are the risks of doing nothing right now? Is it possible recent geopolitical tensions will improve soon and I can resume visiting China more often?
6. What are the risks of doing nothing right now? Is it possible U.S. China relations will improve soon and I can resume visiting China more often?
7. What can we do now if we suspect fraud, corruption or IP theft in our China operations?
8. Does management and employee Fraud & Corruption Training really help?
9. How effective is a formal whistleblower program? Has it changed since Covid?
10. I’ve got a guy who’s a real rainmaker for us in China, but I’m not absolutely sure about his integrity? What should I do?
11. If I find a problem in China, is my degree of risk limited to within China?
12. If I decide to sell my China operation and move production elsewhere, how concerned about this topic do I need to be?
13. What is the real-life challenges when implementing a new operational strategy or conducting forensic accounting after the ‘dust has settled, and any unhealthy employees terminated?
14. Can you describe some real-life case studies of fraud& corruption in China that you can share?

Mitigating Fraud and Corruption in China Operations:

Speakers

DR. TIM KLATTE | Partner, GRANT THORNTON, CERTIFIED FRAUD EXAMINER (CFE), CERTIFIED FORENSIC INTERVIEWER (CFI)

- Leader of the Forensic Advisory Practice in Shanghai
- Advises clients on complicated compliance investigations and effective ethics programs

Warren Clark | Partner, Grant Thornton, Audit Partner and LEader of National China Business Group

- Specialized in auditing and U.S. based companies with operations in China, foreign private issuers, and companies going public in the U.S.
- Lived and worked in greater China for more than 18 years

LI XIAO | OPERATIONS MANAGER, EAST WEST ASSOCIATES, CHINA

- Former China General Manager for US construction materials manufacturer
- Former China Director hired to turnaround business and manufacturing plants for US electric motor manufacturer

Dan McLeod | Executive Advisor, East West Associates

- Former Director Asia Pacific Operations. Ashland Specialty Ingredients (Shanghai)
- Former Director of Manufacturing & Supply Chain for Hercules specialty chemicals

Mitigating Fraud and Corruption in China Operations:

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Mitigating Fraud and Corruption in China Operations:

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A Role for Thailand in Your China +1 Strategy?

SEMINAR:

A Role for Thailand in Your China +1 Strategy?

A Role for Thailand in Your China +1 Strategy

About The SEMINAR

Meet Senior Thailand Government Officials who will Outline Thailand’s Investment Opportunities.

Thursday, April 11, 2024

Registration: 8AM CDT
Conference: 8:30AM – 10:30AM CDT

Event Location:

777 East Wisconsin Avenue, Milwaukee, WI, 53202-5306

HOSTED BY:

East West Associates
Foley & Lardner
Thailand Board of Investment

Manufacturing & Supply Chain Seminar Roundtable Discussion with Senior Executives

Who Should Attend?

Executives of U.S. manufacturing companies:

- - - Who face manufacturing, contract manufacturing or sourcing challenges in China
    - Are expanding Asian Supply Chain & Manufacturing to better serve European and U.S. markets
    - That include Automotive; Electronics; Industrial; Medical devices & Medical technology; Automated manufacturing systems; companies in the Bio-Circular-Green (BCG) Economy

Why Companies Like Yours Are Attending

U.S. companies with China manufacturing or sourcing are diversifying beyond China. Thailand is becoming the country of choice for many of them. This roundtable discussion will provide you with useful information to understand why companies look to Thailand as part of their global manufacturing & supply chain strategy.

A Role for Thailand in Your China +1 Strategy

Speakers

Welcoming Partner and Seminar Moderator

DAVID SIMON | Partner, Washington, D.C./Milwaukee

Welcoming Foley & Lardner Partner

Alex Bryant | President, East West Associates

Moderator

Roundtable Speakers

Nanthapol Sudbanthad | Director, Thailand BOI New York Office

- The Thai Board of Investment [BOI] is the governmental agency responsible for direction, oversight and approval of foreign investment incentives to locate to Thailand.

Vanessa Miller | Partner, Foley & Lardner Detroit Office

- The international law firm of Foley & Lardner is a preeminent law firm that stands at the nexus of the Manufacturing, Energy, Health Care & Life Sciences, and Innovative Technology Sectors. Foley’s 1,100 lawyers across 25 offices worldwide partner on the full range of engagements, from corporate counsel to intellectual property work and litigation support, providing clients with a one-team solution to all their needs.

Mark Plum | Director, East West Associates

- East West Associates (EWA) and the Thai BOI have worked together for a number of years. EWA supports U.S. companies with evaluating Thailand and other attractive countries and establishing operations and sourcing capabilities in those countries.

John Turlais | Of Counsel, Foley & Lardner Milwaukee Office

- The international law firm of Foley & Lardner is a preeminent law firm that stands at the nexus of the Manufacturing, Energy, Health Care & Life Sciences, and Innovative Technology Sectors. Foley’s 1,100 lawyers across 25 offices worldwide partner on the full range of engagements, from corporate counsel to intellectual property work and litigation support, providing clients with a one-team solution to all their needs.

Webinar agenda

Brief Introduction and description of each speaker’s firm.
Summary of current state of China and the China +1 Strategy, and its global effects on US-based companies.
Current state of Thailand. Thai BOI will discuss the business environment in Thailand, their Target Industries rationale, and Thailand’s foreign company incentives.
Case Study of Wisconsin-based company who established a Thailand manufacturing operation and received 29M USD of financial investment incentives.
Extensive Q&A.

Speakers will aslo answer registrants’ questions, including:

1. How does the current situation in China affect western companies? What are specific challenges companies face in addition to U.S./China tariffs?
2. What are the effects of current conditions on companies that produce in China and sell the majority of their products within China? Conversely, what are the effects on companies that produce in China and export the majority of their products outside of China?
3. What strategies are companies employing to address the current China situation? How have these strategies affected countries in Southeast Asia?
4. Some companies may wish to relocate or establish a facility outside of China but continue to source their products (or components) from China (example: electronic manufacturers). How does the concept of local content/local certificate of origin affect these companies?
5. How do China’s and Thailand’s costs compare? Skilled labor costs? Labor availability? Corporate Income Tax? Land costs? Land availability? Utility costs? Inflation? Lease rates? Building costs?
6. Could you talk about site selection factors in Thailand? Land; build to suit; lease existing facility, etc. Does Thailand allow for 100% ownership by U.S. companies (including land)?
7. If a company leaves China, what are the challenges of closing their China manufacturing plant? What are closure considerations like severance and personnel? How does a company protect Intellectual property (IP) and physical property? What about relationships with customers, vendors, Labor Bureau, PSB, et. al.? Disposition of equipment? Duties on equipment relocated out of China?
8. What financial & operational incentives does the Thailand government provide U.S. companies to establish operations on leased or owned land?

A Role for Thailand in Your China +1 Strategy

REGISTER TODAY!

Timely Topics To Drive Growth.

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Adler Pelzer Group

Accuride

aseptia

alliance

amercable

americhem

anisa

calient

corning

chemco

climate-master

curtiss-wright

federal-signal

greenheck

flexco

gore

hilite

HJ-Baker

Icee

mascoat

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micromeritics

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Establishing Manufacturing & Sourcing in Poland.: The Why & The How

Webinar:

Establishing Manufacturing & Sourcing in Poland:
The Why & The How

Establishing Manufacturing & Sourcing in Poland

About The Webinar

East West Associates Roundtable with Senior Executives

Who Should Watch?

Executives of US companies:

- - Expanding Supply Chain & Manufacturing to better service European customer base
  - Facing manufacturing, contract manufacturing or sourcing challenges in China

US companies are establishing or relocating to Poland for a number of reasons, not the least is diversification from China. Poland has become a preferred destination as China labor costs and geopolitical concerns increase, and as US/China tariffs remain.

Poland is the fifth largest manufacturing country within the EU and contributes 22.4% of the country’s GDP. Germany is the largest importer of Polish products, followed by the rest of Western Europe.

The leading Polish industrial sectors are automotive, aviation, pharmaceuticals, household appliances, metal products, electrical equipment, electronics, chemical products, and rubber & plastic. As a result, Poland has a large supply chain base of raw materials and component products servicing these manufacturing operations.

East West Associates’ speakers addressed these questions, including:

- Why are companies diversifying from China and leveraging Poland’s Supply Chain & Manufacturing capabilities?
- How are US companies developing sourcing, contract manufacturing & manufacturing capabilities in Poland?
- What industry sectors are finding sourcing & manufacturing success in Poland?
- How to identify & qualify Polish suppliers?
- How to conduct Site Selection in Poland to establish Polish manufacturing site?
- What financial & operational incentives does the Polish government provide to US companies to establish operations on leased or owned facilities?
- How should our investment strategy be designed to best meet the Polish Investment goals?
- Can you summarize the Polish/US trade relations and tariff policies?
- What is the availability & quality of local labor (production & engineering talent)?

Our speakers presented two recent case studies:

- EWA & a PA-based manufacturing client identifying and qualifying Polish suppliers
- EWA & a MN-based manufacturing client relocating their European operations from Spain to Poland

Establishing Manufacturing & Sourcing in Poland

Speakers

Mike Jacobs | Chief Operating Officer, Weber, Inc.

Responsible for end to end product life cycle, including product management, research & development and end-to-end supply chain and operations functions (Strategic Sourcing, Demand & Supply Planning (ES&OP), Global Manufacturing, Logistics & Distribution and Quality)
Former Vice President, Logistics & Material for Rockwell Automation (NYSE: ROK)
Director, Global Sourcing – Fabricated Components for Schneider Electric

Dariusz Pielach | Director, Central Eastern Europe

EWA Director of Poland/Central Eastern Europe
Resides in Warsaw, Poland
Former Project Manager/Director and Interim Manager for Western multinationals
Primary focus in strategic and operational procurement, sourcing, and project management

Mark Plum | Director, East West Associates

Former President of Briggs & Stratton Asia (NYSE: BGG)
VP Sales & Marketing, American Standard Thailand & American Standard China

Establishing Manufacturing & Sourcing in Poland

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Establishing Manufacturing & Sourcing in Poland

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OPERATIONAL & COMMERCIAL PERFORMANCE: Employee Turnover & Compliance

OPERATIONAL & COMMERCIAL PERFORMANCE:

Employee Turnover and Compliance

Operational & Commercial Performance: Employee Turnover and Compliance

BACKGROUND

A Florida-based mid-size private company engaged EWA to advise on performance improvement for their 160 employee plant in Zhongshan China. The client’s owner was concerned over recent productivity declines in the plant.

The operation served the mother company as a captive supplier. It exported nearly all its product to the company’s Distribution Centers that served customers in Latin America and the southern U.S.

Initially, EWA was tasked to look at process improvement and productivity issues, and perform some staffing in anticipation of growth. However, the EWA team’s evaluation of plant operations uncovered internal process issues; certain financial irregularities; and unacceptable employment practices. The client then commissioned EWA to investigate further.

Operational & Commercial Performance: Employee Turnover and Compliance

APPROACH

Series of structured interviews

EWA conducted a series of structured interviews over several weeks with senior management, middle management and a sample of the hourly workers, to take the pulse of employee relations and to assess compliance with employment law.

- Top Management
- Middle Management
- First line managers
- Conducted individual interviews with members of a representative stratified sample of hourly employees
- EWA team members also made many plant tours to see employees at work and observe their interactions with managers and fellow employees.

Gathering Information and Data

- The EWA team spent two months in the plant gathering data through interviews and observations of the interactions among workers and their leaders.

Delivered Report to Company Executives

Turnover

- EWA implemented new employment standards and expanded the recruiting base. The plant was a shrine to nepotism which caused problems in discipline and accountability, thus fueling the turnover and lack of productivity. EWA revamped training and set up a mentor system.

Outside and Child Labor

- The practice of taking work home was abolished, with pushback from some employees. We made it clear that underage children could not be employed in any capacity. Also, with food-related products, quality assurance and hygiene are essential for both end-user safely and regulation compliance. We explained that after the proper employee and management incentives were put into place, the plant would become more productive and experience fewer quality problems.

Welfare Benefits Compliance

- EWA performed a full benefits audit, and calculated the costs of remediation based on three start date options:
  - Beginning of benefit program;
  - Beginning of current year; or
  - Now and into the future.
- The client selected the third alternative.
- EWA re-designed a new benefit plan, and the communications of the plan presented several options to employees.
- Most enrolled under the least expensive benefit alternative; employees were more interested in today’s take-home pay than future benefits.

Living Conditions

- The leased factory complex was located near the ocean, and consisted of two L-shaped 4-story production facilities facing the main road, with a large 5-story dormitory 150 yards in back, with a grassy field in between. The facility was prime breeding ground for vermin attracted to the canteen on the ground floor of the dorm. While many of the resident employees were not deeply troubled by the conditions, they were simply unacceptable from a Western management standpoint.

Management and Culture

- The client insisted that negative and ineffective management behaviors be corrected immediately.
- The EWA team coached the facility’s GM, and teaching him how to coach his subordinates.
- EWA introduced Basic Supervisory Training on interpersonal skills needed to improve management’s attitude and behavior toward employees.
- EWA designed and implemented simple recognition programs to reward good results in production, quality, housekeeping and safety.

Operational & Commercial Performance: Employee Turnover and Compliance

RESULTS

Based on the data we gathered, EWA made recommendations for recommended tactics and strategies to address the issues.

- Employees responded positively to all these changes and programs. A number of employees openly expressed gratitude that the Company was finally showing that it cared about their welfare.
- As employees enjoyed better living and working conditions, employee turnover declined, and the attention to hygiene was sustained.
  Welfare Benefits compliance was achieved, and employee contributions implemented.
- The client avoided a potential six-figure liability.

Timely Topics To Drive Growth.

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OUR CLIENTS

accessdata

Adler Pelzer Group

Accuride

aseptia

alliance

amercable

americhem

anisa

calient

corning

chemco

climate-master

curtiss-wright

federal-signal

greenheck

flexco

gore

hilite

HJ-Baker

Icee

mascoat

merichem

micromeritics

nanotex

oerlikon

plasticolors

rudolf-group

silfex

sweco

tile-shop

tedia

titeflex

weber

Human Resource Services: Resolving Employee Relations Issues

Human Resource Services:

Resolving Employee Relations Issues

Human Resource Services: Resolving Employee Relations Issues

BACKGROUND

EWA was engaged by a large multinational manufacturer to address their U.S. headquarters’ perception that employees of their Guangdong area factory were disgruntled, unmotivated and underperforming. Factory management had reported to client headquarters an increase in complaints regarding workload and work hours, and the plant was experiencing rates of employee turnover that were high even by Chinese standards.

Client Headquarters (HQ) management asked EWA to visit the Guangdong plant to validate the reported issues and recommend solutions.

Human Resource Services: Resolving Employee Relations Issues

APPROACH

conducted a series of structured interviews

EWA sent a small team to the plant and conducted a series of structured interviews with Senior management, middle management and a sample of the hourly workers.

EWA team spent more than a month interviewing Guangdong employees and management, and observing and documenting interactions among workers and their leaders.

Implement recommended actions

- Spent several months coaching the General Manager of the facility, and teaching him how to coach his subordinates
- Provided Basic Supervisory Training on the interpersonal skills needed to improve management’s attitude and behavior towards employees
- Implemented Job Rotation where practical and employees with potential were identified and given greater responsibility
- Trained supervisors to focus on finding and rewarding good deeds, rather than on policing and criticizing unwanted behaviors
- Created basic employee consideration programs to reward positive results and quality-saves, such as departmental “Employee of the Month” awards, birthday recognitions, and more frequent rest breaks to allow employees to refresh and socialize
- Introduced a structured compensation approach, and opened up the employee welfare benefits program to assure fairness and full legal compliance
- Defined Employee Standards and implemented a realistic job preview process to acquaint prospective hires with the realities of the job environment, enabling them to set realistic expectations
- Launched a semi-annual Employee Attitude Survey program to measure results in the collective temperament of the workforce and their perceptions of change

Human Resource Services: Resolving Employee Relations Issues

RESULTS

The solutions that EWA implemented resulted in sustained levels of improvement in plant performance: Product Quality, First-Pass Acceptance, Scrap, Throughput, On-time Delivery, and Safety.