The deadly coronavirus outbreak is hurting scores of companies in California and nationwide that depend on Chinese production and consumer spending.
Like many other American staples and luxuries, L.O.L. Surprise! dolls are made in China. Chatsworth-based MGA Entertainment has them manufactured in Guangdong province, trucked to the port in Yantian Harbor, loaded on ships and brought to the United States, where the popular toys are distributed to retailers and scooped up by eager children. The process went smoothly for years.The situation is “a disaster, frankly,” MGA Chief Executive Isaac Larian said.
“Most of the damage will be toward the bottom lines of these companies,” Reaser said. “There’s therefore no need to implement long-term layoffs of the types of employees involved in California.”Still, she said California’s technology firms may probably see a drop in sales and profits, especially those dependent on parts coming from China and those reliant on the sale of goods and services to China.
Rival toymaker Mattel Inc. in El Segundo also cited that problem Friday in announcing that its Chinese factories and those of its contract partners, which were supposed to restart production Feb. 3, would stay shut until Monday. “We see that the number [of virus cases] don’t seem to be ebbing,” said Gerrit Schneemann, senior smartphone analyst at the research firm IHS Markit. “It feels like this will continue on at least for a couple more weeks.”
Amazon.com urged Chinese third-party sellers on its Marketplace section to alert buyers of the likely disruption of orders and to consider setting their status to vacation mode to avoid incurring poor customer ratings, according to messages to sellers viewed by The Times. He estimated that overall, there would be 80 fewer sailings of ships from China to the United States, and 350,000 fewer shipping containers received, in the coming weeks. The number of cargo containers received at the twin ports of Los Angeles and Long Beach would drop by one-fifth.
“The question is if it spreads, does it lead to a shift in travel behavior,” he said. “If it is contained and goes away pretty quickly, it’s not going to be a big impact.” The firm became a co-owner of a plant in China late last year to offset the costs of higher tariffs on products it imports. Skechers USA Inc., the Manhattan Beach-based footwear maker, also reported “a significant number of temporary store closures” and said its comparable store sales in China — or those of stores open at least a year — were “below average.”in Shanghai and Hong Kong, which is expected to cut $175 million from its second-quarter operating income.
Tesla Inc., meanwhile, shut down its new Shanghai assembly plant from Feb. 2 to Feb. 10, but it’s unclear how much production has resumed. The Fremont automaker was aiming to build 150,000 electric cars at the facility this year.
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