Most U.S. companies in China can't find enough workers as coronavirus rages on
American companies with operations in China are struggling to find enough workers to get their factories up to speed, with most of the country still shut down because of the raging coronavirus.
Travel restrictions and quarantines imposed by the Chinese government on employees set to come back this week from the extended Lunar New Year holiday has hampered their return to work. As a result, nearly 8 in 10 companies surveyed by the American Chamber of Commerce in Shanghai (AmCham) say they don't have enough staff to run a full production line.
"The government is allowing us to go back to work, but the problem is getting workers into factories. And the second problem is getting enough safety equipment so workers are protected from the virus," AmCham President Ker Gibbs told CBS MoneyWatch.
The AmCham survey polled 109 member companies with operations in Shanghai, Suzhou, Nanjing and the wider Yangtze River Delta from Feb. 11-14. Nearly half of respondents said their global operations have already been affected by measures aimed at containing the virus.
The virtual lockdown in China has severely limited workers' and consumers' ability to move around the country, while also acting as a bottleneck for companies trying to resume business in China, Gibbs said.
The virus, officially called COVID-19, has killed nearly 1,800 people, all but three in China, according to the World Health Organization. More than 70,000 cases have been confirmed, all but about 700 in China.
The virus erupted during peak travel season during the Chinese New Year holiday, when hundreds of millions of residents return to their home provinces. Those workers returning to Shanghai have likely relied on public trains and buses where they could have contracted the virus, and now must be quarantined for 14 days before they return to work.
"The virus could not have come at a worse time. It hit right during the Chinese New Year holiday when so many people were on public transportation and were away from their homes and are now coming back. It's the largest migration on earth — 300 million people typically leave their jobs and go back to the provinces to visit with their families for the holiday," Gibbs said.
Companies are also facing the challenge of supplying employees who have gone back to work with masks, gloves and other health supplies aimed at preventing the virus from spreading. Some 38% of companies say they don't have enough surgical masks for workers, according to the survey.
Even as companies start to re-open, it's too soon to say when factories will return to full capacity. Manufacturing operations are expected to continue resuming over the next couple of weeks. Nearly 70% of plants were at least partly up and running as of Friday, while another 22% are expected to be operational by this week, the AmCham survey found.
"These quarantines are finite — they aren't infinite," Gibbs said. They are generally 14-day quarantines — that's guidance constant with that health care professionals are telling us about the incubation period. If you go by that, we should be back in production quickly."
Still, 30% companies surveyed by the group said they'll move operations out of China if they are unable to re-open their factories.
Economists warn that the coronavirus could slam the global economy, weighing on growth in both China and the U.S. — the world's two largest economies. But experts say the countries would both see a rebound over the next few months if the outbreak is contained relatively soon.