Labor Costs Are Very Important to a Company

This also can be seen from the increasingly serious of the recent "shortage of migrant workers". There was shortage of the front line workers. This also shown that the new generation of labors have more and more higher wage expectations and life hopes, which make them do not want to go to labor-intensive factories or foundry enterprises. From Fox Conn's wide and continuous recruitment coverage, it is obvious. But Adidas's migration resting places are likely to be Southeast Asia's Cambodia or Thailand. Recently, there broke the scandal of Adidas's "sweatshop", and from it, the initiative clue can be seen as well.By report, licensed merchandises should be produced aiming to the London Olympic Games, and garment factory workers in Cambodian are the sole people group who can earn fifteen dollars weekly from Adidas. Workers need to work ten hours a day at most, and need to work six days a week. 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) . In contrast, the average wage monthly in Suzhou plant will be no less than 3000 Yuan, which is 3.6 times higher than workers in Burma.Actually, not only Adidas has realized the increasingly increase on labor costs in China, and its condense of room for profits. In the early March 2009, Nike that is the number one sports brand all over the world closed its only footwear production facilities' Taicang plant. 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 example, Adidas emphasized just shut down the affiliated factories, and will not close the OEM factories. 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. The reason was that Adidas only needed to place orders to OEM factories, but do not need to consider the labor costs. 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. The First Agricultural Economy commented that Adidas, Nike and other multinational companies gradually moved from mainland plants, and this indicated that China's labor costs are increasing step by step. 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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