"American companies have worked closely with Chinese factory owners to improve production times and reduce error rates. Now, changes in China's labor patterns are setting back that progress and forcing business partners to rework arrangements they thought had been nailed down. "
"Demographics are exacerbating the problem. China's 1980 one-child policy has started to erode the labor supply. Another factor is is workers at TOY and apparel factories are shifting to more lucrative industries like electronics. The trend reflects rising expectations among China's workers, who are seeking out higher pay even as they show less inclination to work in factories. Many workers use the New Year's break to look for new jobs or start families."
"The new year exodus typically forces factories to rush to hire new employees, which often creates quality-control issues. The CEO of The Bridge Direct, said 15% to 30% of workers at the factory he uses don't show up after the holiday. 'We get delayed shipments because not enough workers return to the factory', he said. These developments have American companies scouring other countries for factory sites and have raised concerns in China."
It looks like it won't get any better in the near or even the long term. You just have to wonder how long small companies like model train manafacturers can continue to absorb the costs associated with poor QC and delayed shipments of product before it becomes unprofitable. If they have to relocate to other countries, the costs and disruption to production will be horrendous. Food for thought.