Adidas Has Aware of the Fact that There Is an Increase on Labor Costs

We can learn from the "out-of-town laborers" that was increasingly serious recently. There was shortage of the front line workers. The new generation workforces are unwilling to work in labor-intensive plants or OEM plants due to their higher and higher expectation to wage and life, so it can be seen as well from this. From Fox Conn's wide and continuous recruitment coverage, it is obvious. As for resting places for settling of Adidas, Cambodia or Thailand of Asia are possibilities. Recently, there broke the scandal of Adidas's "sweatshop", and from it, the initiative clue can be seen as well.It was reported that Adidas only paid fifteen dollars per week for its Cambodian garment factory workers who are responsible for producing licensed merchandises for the Olympic Games in London. Weekly, workers have to go to work six days, and they are going to work ten hours per day for maximum. It was said by these workers that the condition where they worked was severe. If they work eight hours a day and last six days a week, the salary monthly is 61 dollars, while the health insurance fee is five dollars. But it was recently responded by Adidas that the salary per month for its Burma factory workers was 130 dollars (about 828 Yuan RMB) . By comparison, workers in Suzhou can earn more than 3000 Yuan per month averagely, and this salary level is Burma workers' 3.6 times.Actually, not only Adidas has realized the increasingly increase on labor costs in China, and its condense of room for profits. As early as in March 2009, the world's number one sports brand Nike also shut down the sole owner of footwear production facilities in Taicang factory. It transferred its footwear production business that was managed by the Winterthur Group to Winterthur's factories in other parts of Asia. But these large multinational corporations will not fully retreat without any reservation; for they are all hold back a trick or two. For instance, Adidas stressed to only close its direct plants, but it was not the same picture of foundry plants. It was said by Hainer that in China, the production proportion has been lessened, but China's foundry production number is not going to decline, and no Chinese markets are going to be shut down.In fact, this action was to transform the rising pressure of labor costs to local foundry enterprises. Because there was no need for Adidas to take the labor costs into account, what required it to do was to provide foundry factories with orders. For the sake of taking orders into consideration, just OEM plants will show the appearance of profits squeeze. In addition, this was also the usual practice that other multinational companies' took. It was reviewed by the First Agricultural Economy that there is an increase on labor costs in China, which can be explained by the emigration of some transnational corporations, such as Adidas and Nike. Normal 0 7.8 Å 0 2 false false false MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:nh<; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman"; mso-fareast-font-family:"Times New Roman"; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;}

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