A three-consecutive day protest among truckers in Shanghai disrupted operations at its seaport, a major distribution hub. With inflationary pressures outpacing wages, unrest among Chinese workers grows and the toy industry is paying attention. Strikes such as the one in Shanghai can disrupt logistics for companies like Hasbro, maker of G.I. Joe, which manufacturers and ships from China. Consequently, if the Chinese government offset wages for inflation, toy companies would see an increase in labor costs, cutting into their bottom lines and almost certainly resulting in price increases in the toy aisle for U.S. consumers. As the Chinese economy continues its exponential growth, is it time for toy companies to start weaning off Chinese manufacturing?
SOURCE: GlobalToyNews.com via Raving Toy Maniac
2 comments:
It really start to look like it doesn't that cost effective doing the manufacturing in China anymore, with the rising petroleum prices coupled with the higher salary and working environment issues. I think the joes are better off in Mexico or Canada. That's not counting with the prevalent piracy issue in China.
We agree! We go as far as recommend that former auto manufacturing plants, which have been shut down, be retro-fitted with the support and incentives of state and local governments. It could put people back to work and bring operations close to home for many of these companies.
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