Bosch shifts to closed-loop mode at 4 China plants

Robert Bosch said four of its factories in China — three of which make components for vehicles — are operating under closed-loop conditions as the country adheres to its strategy of limiting virus transmission.

Auto parts sites in Chongqing, Chengdu and Jinan, plus an industrial technologies plant in Beijing, have entered closed-loop systems, Bosch said, a set of working conditions under which employees are kept isolated from the outside world and tested for COVID regularly to allow production to keep running.

“In China, the company at the beginning of this year established plans on how to implement closed-loop management if required,” a Shanghai-based spokeswoman for Bosch China said in an emailed statement Wednesday. “It’s a comprehensive plan with the aim of stabilizing business activities including supply chain wherever possible.”

Closed-loop systems — first deployed during the Beijing Winter Olympics as a way of keeping athletes and support staff separate from the wider population — were meant to be the panacea that would keep China’s economy chugging even as Covid restrictions limited movement. They were employed successfully earlier this year but have proven harder to maintain in recent weeks amid growing dissatisfaction over Beijing’s handling of the pandemic.

Some automakers are now instead opting to shutter their plants in China as COVID restrictions make it almost impossible to secure some components, deeming even closed-loop systems untenable, people familiar with the matter said earlier this week.

Volkswagen Group on Monday said a component shortage was the main reason behind a decision to halt production at a joint venture plant that it has with China FAW Group in Chengdu and two of five production lines at its factory in Changchun.

Honda Motor also suspended its operations in Wuhan, the original virus epicenter, although said Wednesday it was able to resume operations.

Bosch’s efforts involved mapping out production schedules, close workforce management and delving into supply chain and logistics planning, plus organizing food supply, accommodation and health support for staff, it said. Employees were only asked to enter the bubble on a voluntary basis.

Bosch also said the plants in question are smaller, with factory line workforces that range from 50 to 300 people.

“We can currently fulfill customer orders,” the Bosch spokeswoman said, adding that the “effects” of the closed-loop systems had been manageable.

That has not been the case for other companies.

Conditions under a closed loop at the Chinese factory complex of Apple’s main global production partner recently seeded unrest that saw a mass exodus of employees and a violent clash with security guards.