Adidas'S Closure Of The Foundries Is Alleged To Be A Breach Of Contract.

In the face of foreign capital retail giant, the profits of the foundries have been "dried". How should we choose now? Is it to swallow the bitter water to find the good master, or to take the initiative to seek breakthroughs in the pformation, or to follow the laws of industry and move southward?

2012, the United States

Adidas will take the sole wholly-owned factory in China and withdraw the OEM agreement from October to April next year.

The 300 generation factories decided to join Adidas in asking for a claim, to honor their commitments and to compensate factory machinery and equipment.

More and more instances are obvious. Chinese foundry enterprises are walking at the crossroads of fate.

The fuse of the discussion on the fate of OEM enterprises is beginning to ignite.

The global foundry industry chain has been pferred from Europe and America to Japan, Korea, Hongkong and Taiwan of Asia, and finally passed through the mainland of China. Now it has gradually turned to Southeast Asian countries such as India, Vietnam and Kampuchea.

This is the fate of the global distribution chain.

"In the process of pformation, the failure rate of enterprises has reached 8%, which is two times that of the past.

China is now getting rid of its low end position and developing to the middle and high end, so competition will be fierce.

Chen Yu, director of the Institute of industrial economics of Beijing Technology and Business University, said in an interview that "large scale closures of consumer goods factories are the inevitable trend of economic development.

With the decline of orders and the increase of labor costs, many enterprises in China are also moving out.

Withdrawal logic of foreign capital "migratory birds"

After several years in China, they migrated like migratory birds.

Finally, the factory will say goodbye to China.

In July 18th, Adidas, a sporting goods manufacturer, said the company would close its only factory in China by the end of October.

A few days later, a number of Adidas foundries in China were notified in succession. They were told that Adidas would cancel their OEM agreements with them in October and April next year and terminate their cooperation.

In such a short period of time, one after another shut down the factory directly and abandoned the industry and commerce, and Adidas's withdrawal was resolutely.

But compared with his counterparts, ADI has hesitated. Its rival Nike, as early as 2009, closed the sole shoe factory in Taicang, Jiangsu. Clarks, K-Swiss, Bakers and other international shoe giants have already set up production lines in Vietnam and Indonesia.

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For these foreign-funded enterprises, the choice to leave China, as they chose to come to China in the past, is the diligent workers and the cheap labor force in China.

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In the field of industry, the rising labor cost is gradually weakening the advantages made in China, while Bangladesh and other Southeast Asian countries have gradually attracted the industrial pfer of the textile and garment industry with cheaper labor costs.

As early as three years ago, Nike closed its only shoe production plant in China, the Taicang plant.

Although Adidas has repeatedly denied that the withdrawal of Chinese factories has nothing to do with raising salaries, the industry has analyzed that Adidas's withdrawal from China is largely due to the pressure of rising labor costs in China.

Take Dong Long Dai factory in Tongling as an example, in 2007 and 2008, the number of employees was up to more than 2000, and the monthly salary per person was 1100 yuan. With the increase of labor costs in recent years, the per capita wage has reached 2000 yuan per month.

In the factories directly under Suzhou, the per capita wages of workers have reached 3000 yuan per month, and the increase in cost has significantly reduced Adidas profits.

As for the next stop of foreign giants' migration, Southeast Asia, according to reporters, the cost of employment in Vietnam, Malaysia, Kampuchea and other countries is only about 1/3 of China.

Zhou Xingang, a worker in Adidas factory in Kampuchea, has been exploded for only 15 dollars.

In fact, the withdrawal of ADI has long been a symptom.

As early as 2008, Adidas global CEO Herbert Haina said in an interview with the media that because the wage standard set by the Chinese government was getting too high, Adidas hopes to partially withdraw from China and move to cheaper labor areas.

Since then, ADI has begun to decrease.

Order.

"In 2006 and 2007, ADI's annual orders in Dong Long were about 2 million, and 2008 was a turning point. Since then, orders have been shrinking, and in 2008, Dong Long has made 1 million 500 thousand, and 2011 has reduced to 700 thousand."

Jiang Liuhong, director of Purchasing Department of Shanghai Dong Long down products Co., Ltd.

Hengyang Rong Yang footwear industry, OEM brand Adidas accounts for about 90%.

According to its responsible person, since last year, orders from Adidas were also significantly reduced.

"In 2010, when it was in good condition, it could process 250 thousand ~30 Adidas shoes in one month, and last month 8~10 months only processed 150 thousand ~20 pairs."

Leaving the last Chinese worker: Adidas was referred to the river

There are indications that ADI is already preparing for the gradual pfer of production capacity.

But these changes did not arouse the attention of OEM manufacturers, and even 100% of the company's capacity depended on ADI.

Yuyuan Industrial Group, a Taiwanese capital enterprise, is one of the largest foundry companies in Adidas. Yu Yuan has many factories in mainland China.

According to reports, as of the end of March this year, Yuyuan footwear production line was 525, of which Vietnam and Indonesia's production lines add up to 286, accounting for more than 50%, and there are 230 production lines in mainland China.

For the termination of the cooperation incident, ADI's explanation is "optimizing the global procurement framework".

However, in the view of the foundries, ADI's move is like breaking the bridge.

Since entering China in 1996, ADI has been very strict with the foundries. In order to meet their requirements, these foundries have invested heavily.

It is understood that in 2009, Adidas put forward a project called Gassa Milestone, which plans to make a score on the capacity, equipment and software of the foundries, and the enterprises whose marks are not up to standard will be eliminated.

Because of this plan, the foundries have invested a lot of money in training, equipment and software.

"Once the cooperation is terminated, the loss of equipment in our factory is only about 3 million yuan, and we only hope that Adidas can provide some equipment compensation".

Jiang Liuhong said.

Min Heng Industrial Co., Ltd. is the largest in Adidas China.

A garment factory under the company's 100% capacity is attached to Adidas.

In order to cooperate with Adidas and other international manufacturers, min Heng industry in 2003 built a new workshop of more than 6000 square meters, and equipped with embroidery workshop, printing workshop, accessories production workshop and so on.

Because production capacity is completely attached to ADI, the company basically has no contact with other customers. If there is no new order in the short term, there is only one way to close the factory.

Sun Yingli, the head of Shanghai man Lang Textile Co., Ltd., it seems that ADI still has a breach of contract.

"The time limit for the OEM contract was indefinite, but it was indicated that Adidas could terminate the contract ahead of time without compensation.

As the OEM enterprises were in a weak position, we did not dare to oppose this clause at that time, but the contract was obviously "overlord clause".

Sun Yingli said they have already found a lawyer, and are still communicating with Adidas. There is no formal appeal and is at the stage of material preparation.

Behind the relocation of Nike and ADI's production base reflects the urgency of the pformation of OEM enterprises.

Copying IKEA's "cottage" business is more or less a direction.

Compared with the retail giants with price advantage and the ability to combine product lines, there is still doubt about the success of self brand enterprises.

From the "Butterfly Effect" of bankruptcy to the entity of Chinese factories

There is still a way to go in pition.