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
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          Relocating Out of China? Critical Considerations

          WEBINAR:

          Relocating Out of China?

          Critical Considerations for Transferring Technology

          Relocating Out of China

          About The WEBINAR


          Who Should Watch?

          Before actually moving forward, executives considering relocating their manufacturing operations out of China will benefit by attending.

          Why Should You Watch?

          You’ll hear ideas and guidance to avoid problems and smooth the path to transferring your manufacturing technology assets and knowledge out of China.


          Why are manufacturers relocating out of China? What are some critical considerations?

          After successfully establishing manufacturing and sourcing in China for the past 20+ years, many companies have relocated, or plan to relocate, all or part of their operations to another country. In the past 4 years alone, 100 MNCs have announced intentions to downsize or shutdown manufacturing in China.

          Companies are relocating their China-based operations to reduce labor costs, lessen tariff exposure, protect their IP, and move closer to customers. If you’re looking at doing so as well, you’ll need to be prepared for some new challenges.

          These include selecting the country that best fits your unique or not-so-unique operation, Make-vs-Buy decisions, restructuring costs, avoiding burned bridges in China, and successfully transferring your technology and intellectual property out of China.

          One of the most overlooked or under-appreciated challenges of relocation is transferring the know-how your company has developed in China over the years, whether it’s in-house or with key suppliers.

          In this webinar, East West Associates executives who have actually moved operations from China shared their experiences, learnings and insights that will help you avoid delays and costly hassles.

            Speakers answer registrants’ questions, including:

            1. Do you know for sure that your technology, product designs and know-how are adequately documented? 
            2. Is there a significant amount of know-how controlled by China suppliers, or by only your factory personnel currently living in China?
            3. Will you face difficulties or limitations by the Chinese government when physically moving hard assets including manufacturing machinery out of China?  
            4. Ability to access or transfer tooling and specialized equipment from your current supplier?
            5. What constraints might you encounter when transferring technical know-how documentation out of China? What about your information-laden laptops, desktops and hard drives during relocation?
            6. Is localizing procurement of raw materials and components in your target country a realistic option? Or will you continue to be reliant upon current suppliers in China?
            7. Will your manufacturing process allow you to meet “Country of Origin” requirements at the new location?
            8. How will you identify and qualify the right people to support your relocation project?
            9. Do you fully understand the cultural differences between the sending factory and a soon-to-be receiving factory?  How do you plan to manage those inevitable differences, which could be critical to your success?  These cultural differences could be between China and countries in Southeast Asia (Thailand, Vietnam, Philippines) as well as Mexico.
            10. What trade compliance and certifications are necessary to minimize tariffs and duties?
            11. What is the manufacturing “eco-system” in your target country?  Are you relocating to an area with a similar or complementary manufacturing base? Is there a qualified & affordable labor pool?  Will the government there be friendly and inviting, and offer incentives to new US-owned businesses?  
            12. Consider the importance of establishing a network of service providers at the new location:  legal, compliance, tax, accounting, advisory, maintenance services, HR services, et. al.
            13. Can East West Associates share a couple of real-life examples of how a US-owned, in-China operation was successfully relocated?
            Relocating Out of China

            Speakers

            Tze Beng Lim | Chief Technical Advisor, Honeywell UOP)
              • Lead technology transfer, qualification and management of contract manufacturers and tolling companies in China, India, and Southeast Asia for Ashland, Inc. 
              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
                Relocating Out of China

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                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
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                        2023 Headwinds to Manufacturing In-China/For-China

                        Webinar:

                        2023 Headwinds to Manufacturing In-China/For-China

                        Headwinds to Manufacturing In-China/For-China

                        About The Webinar

                        East West Associates Roundtable with Senior Executives


                        Who Should Watch?
                        Executives whose US-owned companies are committed to manufacturing in China and selling into in-China markets.

                        Why Should They Watch?
                        For ideas and guidance to help navigate new business restrictions and other headwinds to your In-China/For China manufacturing operations.


                        The Past: How Things Were, in China/for China

                        For decades, manufacturing in China for the China market was a happy time. US multinational companies (MNC) took their tried-and-true designs there to address a huge untapped China demand. There were relatively few local competitors. The cost of labor in China was a fraction of anywhere else. The Chinese government provided a friendly regulatory environment and offered attractive incentives.

                        Then tailwinds became headwinds.

                        Today: Where We Are Now, in China/for China

                        Chinese competitors have emerged. US market share in China has eroded. Labor costs have ballooned. Nationalism is on the rise in both US and China. Political tensions and tariffs. New Business Park limitations. Buy-China attitudes, unpredictable laws and new environmental regs make it tougher and tougher for US-owned companies in China.

                        But there you are, in China, for the China market. What do you do now?

                        Our seasoned executives have real-life manufacturing experience in China and addressed four scenarios during the webinar.
                        Are you experiencing one, some, or all of these scenarios?

                        1. Manufacturing operations in China Business Parks are facing growing pressures, including limitations on expanding manufacturing capabilities, and increased environmental restrictions.
                        2. The Chinese government is imposing an array of“no-fly list” restrictions on imports of sensitive products or components or raw materials you need to manufacture in China.
                        3. Implications of “Made in China 2025” indicate you might need to stay below the radar to survive there.
                        4. You might be concerned that your operations in China could be under-performing.

                        Our speakers also answered audience questions, such as:

                          • Are there industrial parks or developing regions within China where we might find lower manufacturing costs and/or growing market potential?
                          • What opportunities are emerging in the western regions of China? Is it easier to do business there?
                          • China has recently spoken about welcoming foreign investment again. What can we realistically expect?
                          • Should we re-evaluate our ownership model and move to a minority position (< 50%) to address Chinese concerns? How do we deal with cash flow, profit repatriation, corruption, IP/TS concerns?
                          • Should we consider a move to a SE Asia regional headquarters? Like in Singapore or Hong Kong or even South Korea?
                          • How do we deal with declining operational performance? How can we monitor & motivate & compensate ex-pats and local staff, given new circumstances in China for US citizens and US-owned operations?
                          • Can you share a real-life example of how a certain In-China, For-China company is re-shaping its operations to reflect a changing China?
                        Headwinds to Manufacturing In-China/For-China

                        Speakers

                        Mark Plum | Director, East West Associates
                        • Former President of Briggs & Stratton Asia (NYSE: BGG)
                        • VP Sales & Marketing, American Standard Thailand & American Standard China
                        Dan McLeod | Director, East West Associates
                        • Former Director Asia Pacific Operations- Ashland Specialty Ingredients
                        • General Manager-Eaton Corporation (SE Asia)
                        • Director of Asia Pacific Manufacturing and Supply Chain-Hercules
                        Headwinds to Manufacturing In-China/For-China

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                        Hiring the Right Senior Executives & Conducting Individual Due Diligence and Integrity Training

                        Webinar:

                        Hiring the Right Senior Executives & Conducting Individual Due Diligence and Integrity Training

                        Hiring the Right Senior Executives

                        About The Webinar

                        Human Resource Success in Post-Covid China

                        Human Resources (HR) management has always been very important in China.  However, with Covid travel restrictions just now lifting for western executives to travel to China, companies are reminded that success in China is heavily dependent on having the right personnel and ensuring the China operation has the right ethical corporate culture.

                        As western executives are gradually returning, companies are evaluating the quality of their executives in China who are currently managing their operations.  During Covid, many US executives did not make significant HR decisions because travel restrictions prevented them from interviewing candidates and the increased difficulty of identifying and qualifying candidates.

                        To ensure success, companies must identify the right potential candidates and take the necessary preventative risk management steps of conducting individual due diligence to ensure the candidate’s character, ethics, and management style do not alienate customers, other corporate employees or vendors.

                        Additionally, these senior executives will shape the company’s corporate operating culture, which significantly impacts the company’s business reputation and employee morale.  Based on EWA’s many years of running China-based manufacturing operations, most employees are aware of existing theft, kickbacks and bribery occurring at the company.  Unless these illegal actions are shut down quickly, they infect the business like a cancer.  Instances of theft and corruption include payments from vendors, kickbacks from customers, selection of family-related vendors, etc.

                        HR success in China is no longer just hiring the right executives  – in the current environment, companies need to implement risk management practices of Individual Due Diligence and Integrity Training to minimize the risk of hiring the wrong senior executives.

                        The webinar addresses topics such as:

                        Executive Searches for Senior Executives

                          • How has Covid affected the ability to identify and qualify senior management candidates in China?
                          • What are the current challenges US companies face hiring senior level Chinese executives?
                          • Has the geopolitical tension between the US and China affected Chinese executives’ interest in working for US companies?

                        Individual Due Diligence of Senior Executive Candidates

                          • How Individual Due Diligence is different from a normal “Background Check”?
                          • Which positions require this level of Due Diligence on the candidates?
                          • Are there positions which do not require this level of Due Diligence?
                          • What are the key risk factors to rejecting a candidate?

                        Integrity Awareness Training

                          • For those companies who have not experienced any unethical behavior at their China operations, why should they consider Integrity Training?
                          • How does Integrity Training improve the company’s position if a terminated employee files a claim with the Labor Bureau?
                          • How does this training impact ALL the employees – both blue collar and white collar?
                          • How does this Awareness training deputize all employees to report unethical behavior?
                        Hiring the Right Senior Executives

                        Speakers

                        Vicky Shao | Director, East West Associates- 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
                        Hiring the Right Senior Executives

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                        Hiring the Right Senior Executives

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