May 15, 2014

LABOR HAS NO VALUE:

China Inc. moves factory floor to Africa (Peter Wonacott, 5/14/14, WSJ)

Each sparkly green television motherboard that rolls off the Hisense Co. factory line here moves China a tiny step toward a new global manufacturing base.

The line's eight South African technicians monitor the assembly process by computer and have incentives to work quickly. In less than a year of operation, they are producing at the same clip of 70 seconds per board as their Chinese counterparts.

But there's a hitch: Hisense factories in China use half as many workers to make the same product. In South Africa, one technician monitors one machine. In China, the company's technicians monitor two machines apiece.

"Step-by-step," says Jerry Liu, general manager for the Middle East and Africa unit of the home-appliance maker. "We'll get there."

Faced with rising labor costs at home and negative perceptions about their employment practices in Africa, Chinese companies are setting up new factories on the continent and hiring more Africans. The companies efforts will test whether the masters of low-cost manufacturing can be as productive in Africa as they are in China.

Many bet they can be.
Posted by at May 15, 2014 2:59 PM
  
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