Is Mexico an option for moving your US operations?

WEBINAR:

Is Mexico an option for moving your US operations?

Closing China Operations?

Speakers

This webinar features seasoned speakers with real-life experiences in closing over 70 China plant closures and relocations, and with sourcing both within China and within relocation target countries:

Dan McLeod, Director, East West Associates

Jacob Miller, East West Associates

Closing China Operations?

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Closing China Operations?

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Closing China Operations? The Dangers & Challenges of Closing a Factory

WEBINAR:

Closing China Operations?

Dangers and Challenges of Closing a Factory in the Current China Environment

Closing china operations?

About The WEBINAR

Who Should Watch?

If you’re considering closing or relocating your China manufacturing operation, you’ll benefit hearing the experiences of those who have already done so.

Why Should You Watch?

To find new ideas & updated guidance to address avoidable problems when closing or downsizing a plant in China, and to ease the path of transferring your manufacturing assets & knowledge out of China.

Many C-level executives are closing their China manufacturing-for-export operations. In the past 4 years alone, 100 MNCs have announced intentions to downsize or shutdown manufacturing in China.

Why? Because when a US-owned company makes products in China then exports them, they’re facing more and more headwinds:

✓ Annual increases in labor and production costs

✓ A more challenging regulatory environment for US operations in China

✓ Continuing US /China tariffs that are expected to increase

✓ Geopolitical tensions between China and US

However, the process of closing China operations can threaten a company’s ability to properly serve its customers. If the plan is not carefully thought-through and not properly implemented, a plant closure can stress a company’s operational stability, strain supplier relationships, and risk one’s brand reputation around the world.

Given China’s economy, many manufacturing facilities are downsizing or closing. As a result, concerned Chinese authorities are paying particular attention to the regulatory compliance of companies closing operations. Other dangers include:

- - Work stoppages and extended strikes
  - Violence to plant management and personnel
  - Damage to plant and equipment
  - IP and physical property theft

If carried out with thorough, highly detailed planning by a knowledgeable project team, executing the right plant closure plan will minimize the negative closure experience for all, and will produce lasting positive results for a company’s global operational stability, customer service, and financial performance.

Speakers answer registrants’ questions, including:

Our speakers presented real-life plant closure decisions and the results of those decisions, and illustrate key points using actual case histories. Additionally, we addressed webinar attendee questions.

For example:

- - What dangers might our people and assets in China face when it becomes known that we might close? Is it true that sabotage, local riots, and personal injury threats can occur? How do we avoid THAT?
  - When should the company only notify the employees on the actual day of closing? When should the company notify the employees in advance of the plant closure?
  - What are some local & regional roadblocks that companies are seeing when closing a China facility?
  - Is the EWA Plant Closing Methodology tailored to closing US-owned plants in China without “burning our bridges” with China-based suppliers, contract manufacturers and customers.
  - What should our Risk Assessment Plan include? When should I engage protective security guards?
  - What HR practices should we follow to be fair to our employees in China and to safeguard our reputation there? Are there PSB (Public Security Board) considerations?
  - Is it relatively easy to physically move the manufacturing equipment we own out of China? Are we likely to face barriers by the Chinese government?
  - What should a manufacturer do to help protect our IP and know-how when relocating out of China?
  - As we assess where to relocate, what important in-country factors & data should we be sure to compare to China?

Closing China Operations?

Speakers

This webinar features seasoned speakers with real-life experiences in closing over 70 China plant closures and relocations, and with sourcing both within China and within relocation target countries:

Li Xiao | Senior Operational and Commercial Director

- General Manager, Argosy Aerospace Materials in Shanghai
- General Manager Lancaster Consulting, Shanghai
- Head of Marketing, Wipro Hydraulics

Vicky Shao | Director, China

- Vice President of Human Resources, Flexco Conveying Equipment Manufacturing Company
- Human Resource Manager, Lombard Risk International Ltd.
- Executive Department Human Resources & Administration, Nitto Denko Corp.

Jay Hoenig | Director, East West Associates

- Chief Operating Officer Asia Pacific, Hill & Associates Group
- Asia Pacific Vice President & General Manager, Bechtel Corporation
- Chairman of the American Chamber of Commerce in Shanghai

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

Closing China Operations?

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Closing China Operations?

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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.

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 RESOURCES SERVICES: Solving Root-cause Employee Relations Issues in U.S. Multicultural Company

HUMAN RESOURCE SERVICES:

Solving Root-cause Employee Relations Issues in U.S. Multicultural Company

HUMAN RESOURCE SERVICES: Solving Root-cause Employee Relations Issues

BACKGROUND

A mid-west U.S. private equity firm retained EWA to address problems in two recently-acquired portfolio holdings with complementary lines of analytical testing equipment products. Along with their U.S. locations, one of the companies had a plant in China, the other in Vietnam.

EWA was asked to conduct an Organization Assessment to validate the issues and their causes, and provide solutions to resolve them.

HUMAN RESOURCE SERVICES: Solving Root-cause Employee Relations Issues

APPROACH

Data collection, analysis and recommendations

Performed the Organizational Assessment by conducting 3 group interviews to obtain information in the context of their Core Values, and to get input on what managers perceived as conditions on the floor:

- 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.

Implement recommended actions

- EWA prepared a report to management that included recommendations for improvements. EWA reviewed the report and recommendations with management to get agreement on specific steps and priorities.
- After joint review, EWA finalized a roadmap for improvement. In addition, EWA helped management establish metrics to measure change in hard issues (productivity, financial results), and soft issues (employee relations, complaints).

Measure near-term, mid-term and long-term results

Short Term

- Reset all branding to new company
- Improve top down and upward communications
- Establish and reinforce formal recognition programs
- Accelerated start to develop more effective supervisory skills

Mid Term

- Expand ESL classes to improve facility communications and foster better team work
- Resolve lingering transition issues
- Improve retention of new hires
- Develop HR systems
- Continue to develop more effective supervisory skills
- Identify and rectify any internal equity issues
- Develop a meaningful Safety program with accountability

Long Term

- Study ways to adapt effectively to changes in workforce and labor market demographics
- Develop innovative approaches to recruiting sources
- Continue supervisory training and bench strength development

HUMAN RESOURCE SERVICES: Solving Root-cause Employee Relations Issues

RESULTS

Based on the data we gathered, EWA recommended short-term, mid-term and long-term tactics and strategies to address the issues.

- Created a “One Company/One Culture” environment using the PE firm’s Corporate Core Values as a framework.
- Suggested resolutions to employee relations issues.
- Gained consensus with Executive Management on issues, priorities and next steps.
- Developed metrics to measure progress and to guide clear and open communications.
- Facilitated implementing solutions to enhance employee cooperation, engagement and participation.