American companies frequently offer employees buyouts as an incentive to leave with some extra cash, rather than get laid off with very little. For workers in ailing industries, taking the buyout can be a smart move. In China, factory employees are making similar choices, but the reward for leaving early is that they get the normal pay they were entitled to:
NYT: At the docks here, the stacks of shipping containers that used to loom above the highway overpass are gone. Logistics managers say they negotiate deeper discounts every week on ships that are leaving half empty. In nearby Guangdong province, so many factories are shuttering without paying employees that some workers are resigning pre-emptively and demanding immediate pay before their employers go bankrupt.
Essentially workers in this situation are suppliers/creditors. They’re like parts suppliers demanding immediate payment, rather than allowing generous financing. The way to get their pay is to quit.
Slowing orders are just part of it:
At the same time, retailers are demanding that exporters show that they have strong balance sheets and will not go bankrupt before completing orders. Exporters, worried the retailers will fail before paying for their purchases, are reluctant to let goods be loaded on ships. And banks, for the same reason, have cut back on guaranteeing retailers’ payments to exporters.
“Trade finance is collapsing,” said Victor K. Fung, the chairman of the Li & Fung Group, the giant supply chain management company that connects factories in China with retailers in the United States and Europe. “We’ve got orders we can’t ship right now.”
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