Category: Industry News
In 2014, Beijing’s CRRC Corporation (the largest rolling stock manufacturer in the world), began what has amounted to nearly $ 3 billion of contracts to re-build American transit systems. Headquartered in Beijing with over 180,000 employees, the company has steadily gained ground in the U.S.
Recently CRRC has struck deals in Boston, Chicago and Los Angeles, with plans to invest in major production and assembly facilities. In Boston, plans call for a $ 60 million final assembly facility and test track at a former Westinghouse site Springfield, Massachusetts. In Chicago, it’s a $ 100 million manufacturing facility on the Southeast side. Lastly, in Los Angeles there will be a facility to manufacture major components, including propulsion and air conditioning.
The numbers are obviously astonishing, but the message that local authorities have given so far is that the company had the highest-rated technical offer and lowest price while offering the most robust local employment program and highest U.S. component content.
The first of the deals was with Massachusetts Bay Transportation Authority for Boston’s subway system. The $ 567 million project will build 58 cars by 2021. The design process has taken three years for the Orange Line and Red Line cars. The design will provide 15 more passengers per car, wider and electrically-operated doors, four accessible ADA-compliant areas per car, LED lighting, modern HVAC, automated passenger information, data recorders, and live CCTV capabilities.
In March 2017, CRRC signed a deal with the Chicago Transit Authority to produce up to 846 new rail cars. The $ 1.3 billion contract will revive rail car manufacturing in Chicago after a 50-year hiatus. The manufacturing facility on the Southeast side will be about 381,000 square-feet employing about 170 workers. According to a statement from Mayor Rahm Emanuel’s office, CRRC will spend $ 7.2 million to train the local workforce. In a news release the Mayor said, “This new facility represents a major investment in Chicago that will bring economic development to the Southeast Side, while creating good-paying jobs for hundreds of workers.”
The most recent agreement, in late March 2017 was confirmed for the Los Angeles Metro by Los Angeles County Metropolitan Transportation Authority (LACTMA). It came right before Chinese President Xi Jinping and U.S. President Donald Trump met in Florida to discuss trade and investment between the two nations. The LA deal encompasses building 64 subway cars that will be worth as much as 7 million. The cars have already met Washington’s “Buy America” provisions requiring 60% of components to be made in the U.S. The first car is expected to be delivered in 2020 and completion of the project is expected by Fall 2021.
In totality, the world’s largest supplier of rail transit equipment is looking to improve technology innovation, upgrading capacity, and manufacturing platforms in the U.S. In an interview, Li Yongle (Vice President of CRRC Qingdao Sifang) said, “CRRC will support other project plans in the U.S., including projects for metro cars and high-speed trains.” CRRC will be helpful in developing local U.S. economies as well as the interconnectedness of various business hubs nationwide.
The Chinese New Year of 2018 starts on February 15th, and lasts until February 21st. While this is a major event that is still largely unknown outside of Asia, importers are sometimes painfully… aware of this season. They certainly have good reasons. The Chinese New Year shuts down every single production facility in the entire country, for varying time frames. In the worst case, and rather likely, scenario – the Chinese New Year can result in severe delays.
Although the official dates of the Chinese National holidays are helpful to understand, it is equally important to know the range of dates around the holiday that are impacted. It is difficult to plan supply chains with inconsistent schedules.
The unofficial dates are what allow the factory workers to visit relatives they may not have seen since the previous year’s holiday. The two holidays with the most days off are the Chinese New Year (mid-February) and the Chinese National Holiday (early October). Both are officially celebrated for a full week. Factory workers that are employed in big metropolitan areas tend to follow the official dates more closely since their relatives are closer geographically, or easier to get to. But, many factories close two weeks prior to the holiday and may not open with a full staff until two weeks after the holiday.
It is also helpful to look at it this way: if a factory closes two weeks before Chinese New Year, and workers do not fully return until two weeks after, that factory will not only have no production during that time, but it will also take a few days after the employees return to get things back up to speed. Then if you look deeper in to that factory’s material supplier, they will also be delayed, resulting in another week. Finally, the large amounts of containers that did not make it out before the holiday will take time to be processed. Ultimately, it is wise to forward plan for 4-8 weeks of delays during these times of the year. But why let that be a deterrent from all the positive aspects of working with Chinese manufacturers?
As a company who has been working closely with a lot of Chinese Manufacturers, one of our suggestions is better planning. By having a better understanding about the Chinese holidays and non-working days, U.S. manufacturers should be able to plan their production. Ensure that production starts in late December, at latest. That assumes in average production time is around 30 to 40 days. If it takes more than 40 days, we start counting backwards and look to have a “buffer stock” in our warehouse. Try to have a minimum 2 weeks’ worth of “buffer stock” between the end date of the production, and the date they close. We also attached a Chinese calendar to help.
New Year’s Day 2018: Jan 1st. No makeup days.
Spring Festival/Chinese New Year: Feb 15th to 21st, makeup days on Feb 11th and 24th
Qing Ming Festival: 5 Apr to 7 Apr, makeup day on Apr 8th.
May Labor Day: Apr 29th to May 1st, makeup day on May 28th.
Dragon Boat Festival: Jun 16th – 18th, no makeup day.
Mid-Autumn Festival: Sep 22nd – 24th, makeup days on Sept 29th – 30th.
October National Day: Oct 1st – 7th, no makeup day.
We first began our government contracting work by manufacturing promotional products for the State of Ohio Department of Public Safety in 2012. Since then, we have been able to consistently improve our company supply chain and capabilities to quickly increase our growth. We now currently hold a dozen contracts with our University and State of Ohio clients. In the near future, we are planning to expand into contracting for Federal clients as well as State Governments outside of Ohio.
To supplement this growth, our employee size has more than doubled already in 2017 with full-time employees and part-time interns. We are also happy to be attending the Municipalities Business Conference and Expo (August 2nd – 3rd) in Columbus with our new and improved man power!
With our certifications as a Minority Business Enterprise (MBE), Woman Owned Business (WBE), and Small Business Enterprise (SBE) we have placed ourselves in a unique position to succeed in this marketspace. So far this year, we have added the following contracts to our growing business:
- 800-18 Aggregate, Bituminous Materials (Ohio Department of Transportation)
- 801G-18 Asphalt (Ohio Department of Transportation)
- 839-18 Glass Beads (Ohio Department of Transportation)
- 828-18 Extruded Sign Panels (Ohio Department of Transportation)
- RS902717 Floor Maintenance Machines (All State of Ohio Agencies and Local Political Subdivisions)
- 4775ME Custodial Supplies (Cleveland State University)
We would love to see you at one of our events either in August or the National Minority Supplier Diversity Council Conference in October (featured earlier in the newsletter)!
What an exciting time for Columbus! The Ohio Healthcare Association (OHCA) was established in 1946 and has grown immensely to represent 800 nursing facilities, assisted-living communities, and other intermediate care facilities with over 100,000 individuals in Central Ohio. Last week (May1-4) they hosted their Annual Convention and Expo at the Greater Columbus Convention Center in downtown Columbus.
On Wednesday, May 3rd we went over to the show to experience the thousands of attendees, enormous exhibit hall, enlightening keynote speakers, and hundreds of educational sessions right here in the heart of Ohio. 889 Global Solutions has provided for this industry for over a decade, so what greater opportunity to learn more!
We met with many influential industry leaders, directors, department heads, and experts enabling us to create long-term business relationships. We want to thank OHCA for the experience and look forward to meeting more healthcare personnel next year.
Check out OHCA’s website here: https://www.ohca.org/