Poorly Made in China

An Insider's Account of the China Production Game

Paul Midler

• Publisher: Wiley
• Year: 2010
• ISBN:
  9781118004203
• Edition: 2
• Topic: Business
• Subtopic: International Marketing
• Index: Business

An insider reveals what can—and does—go wrong when companies shift production to China

In this entertaining behind-the-scenes account, Paul Midler tells us all that is wrong with our effort to shift manufacturing to China. Now updated and expanded, Poorly Made in China reveals industry secrets, including the dangerous practice of quality fade—the deliberate and secret habit of Chinese manufacturers to widen profit margins through the reduction of quality inputs. U.S. importers don't stand a chance, Midler explains, against savvy Chinese suppliers who feel they have little to lose by placing consumer safety at risk for the sake of greater profit. This is a lively and impassioned personal account, a collection of true stories, told by an American who has worked in the country for close to two decades. Poorly Made in China touches on a number of issues that affect us all.

Chapter 1

Vanishing Act

China manufactured everything in the world, and along with it, every imaginable smell. Walking through its many factories, you could catch some of those smells: the heady fumes from adhesives used to make leather shoes, the nutty scents of ceramic vases as they were baked in gas-fired kilns, the sour notes of polypropylene plastics as they melted and were injected at high temperatures. Each manufacturing process was its own olfactory experience, and if you worked in export manufacturing long enough, you might be able to guess the kind of factory you were standing in by using your nose alone.

During the years I worked in South China, I visited more types of factories than I ever imagined could exist. Oddly enough, while the impact on the senses was strong, occasionally bludgeoning, I rarely met a factory owner who was bothered in the least by the smells.

At one sinus-punishing factory, I stood at the gates with the boss, looking out over a field blanketed in a white haze. Some distance behind us, workers were dipping stainless steel tubes into a chemical bath. It was a nickel-plating process. I could actually taste the metal in my mouth, and my nose involuntarily wrinkled.

“Hao chou,” I said. “What a stink.” As soon as the words left my mouth, I regretted making the comment, though I half expected the factory boss would agree.

He tossed away his cigarette and turned in my direction. “You foreigners,” he said. “You come to China and complain about the pollution, but I don't know why.” He then gestured at the blurred landscape around us. “To me, this place smells like money.”

For many in China who dreamed of a better life, those winds of industry correlated with better economic opportunities, and the poorer corners of China, the ones that smelled fresh or of nothing much at all, were not envied, but pitied.

Wherever my factory work took me, I always paid attention to the various odors, mainly because of my first project. The factory made what the Chinese called daily use chemicals—consumer products like soap, shampoo, and hand creams.

The factory, King Chemical, was located in the countryside, at the foot of a large hill. Heading toward the plant on a bright, sunny day, with the fragrance of health and beauty care products filling the air, I thought: so, this is what a sweatshop smells like. The sweet and floral fragrance was immediately recognizable. You smelled it at the bank and at the grocery store, everywhere really. It was the common scent that perfumed soaps and shampoos across South China.

The factory was run by a small, attractive woman who insisted that I call her by her nickname, Zhen Jie.

It was a familiar term—Zhen was her last name, and Jie signified her as an “older sister.” She said that she had the workers call her by this name because she wanted to be seen as someone that her workers might look up to and admire.

“Sister” Zhen explained that her husband could not join us on the tour because he was out of town on business. Instead, a small entourage of managers came along.

“Here. You must wear this before we go inside.” She handed me a white lab coat and gave me cloth coverings for my shoes, making sure that I put them on before slipping a pair of coverings over her black, high-heeled boots.

These precautions were all about maintaining a hygienic environment, Sister explained. Chinese manufacturers did not commonly concern themselves with cleanliness, but it was a critical concern in the health and beauty care industry. Hygiene had also come up in my conversation with Bernie, who had sent me on this unusual assignment.

Before identifying this one company as a supplier, Bernie had tried to manufacture his product line in another location with disastrous results. A large shipment was contaminated with bacteria, resulting in significant losses to his company. This sort of thing, he warned, could not happen again.

The rituals of preparation created anticipation, and I was anxious to get onto the factory floor. Through a glass window, I could see most of what awaited. The place was busy, and I noticed that the workers inside were also dressed in white.

We washed our hands next. The managers who joined the tour lined up at a row of sinks. They took turns at the basins. In their white lab coats, scrubbing all the way up to their elbows, they looked like a team of doctors heading into surgery.

Scrubbed up now, I took a step toward the door, but a hand stopped me. Someone plonked a white cap on my head. In a final dash of ceremony, the doors to the plant were flung open and held wide while we passed through.

The factory was a hive of activity, and as someone not familiar with this kind of operation, I strained to grasp how things worked. The workers were busy making a hand lotion, I saw, and I watched as pink bottles moved down the assembly line. Some workers filled the bottles, while others either capped them or wiped them down. I asked if I could take a closer look at the finished product and was handed a bottle from a packed carton. The printing on the bottle was in Chinese. The company manufactured health and beauty care products for the domestic market. Bernie's company was going to be its first export customer.

As we walked down one assembly line, heads that were already bowed low bent further at our approach, the pace of work noticeably quickening. Wherever we hovered, workers seemed to hold their breath. Everyone in our small entourage was either oblivious to the fact that we were causing the workers to become anxious, or else they did not care.

I watched one young woman with short hair take a bottle off the conveyor belt. She wiped it down in an almost obsessive fashion and refused to pass it along until she had another in hand to replace it. I tried to make eye contact with the workers, but none would allow it. Even those who were less flustered by the tour seemed conscious of being observed.

One worker, who screwed caps onto bottles, did so with an added flourish. Next to her stood a worker whose job it was to place the bottles into cardboard cartons. Instead of tossing the bottles into the box, she was cradling each with two hands—almost in the same respectful manner that the Chinese offer a business card.

The man who had asked me to make this visit was an importer who knew only that I lived in China. We had met in passing and only once; I received his phone call out of the blue, and his instructions to me had been vague.

“Have a good look around,” Bernie said. He wanted me to remark on anything that seemed out of the ordinary. Not noticing anything so unusual, I pretended to have some questions.

“How many workers do you employ?” I asked.

Sister nodded as if it were the right question.

“Two hundred,” she said.

I had not counted, but there seemed to be fewer than that many workers around. “When did the workers take their breaks?” I asked next. Sister said that they broke for lunch and dinner. I asked how many days off they got each month. She said that most got only one day off every other weekend.

Running out of questions, I told her that the factory was impressive. Sister complimented my Mandarin and said that Bernie was lucky to have found me. She hoped that we would work together beyond the one visit, and she went so far as to suggest that there was much she could learn from someone like me. While new to the world of manufacturing, I had already lived in China for a number of years, and this much at least I understood about the place: when you said nice things, you received unbounded compliments in return.

So much of the factory work was done by hand and, I noticed, sometimes by foot. We walked over to a station where hand cream was being pumped into bottles. The machine had been set up so that its operator could activate it by a pedal on the floor. When triggered, a pressurized squirt nozzle filled the bottle with formulation. The worker who sat at the station did not seem very good at the timing involved though, because the front of her uniform was covered in lotion—presumably from missing her mark.

I paused for a moment and watched more closely as the worker filled bottles. It seemed that she had been recently trained because there was something missing from her performance. It was more than nerves, I thought. It was as if she was doing the job for the very first time.

Just then, I felt the pressure of a hand at my elbow. It was Sister indicating it was time to leave.

This gesture of hers was a bit forward, I thought, but instead of misinterpreting the squeeze as something personal, I took it for what it was—a desire to end the visit. I had flown from another city to visit this factory, and the tour had not lasted very long at all. I had the feeling of coming off an amusement park ride that had ended too quickly. No sooner had I begun to get a sense of the factory than the exit doors were opened and we were again standing in sunlight.

“We will take you to the airport,” said Sister.

She then brought me to a waiting room near her office, and I was given a cup of instant green tea. After sitting in the waiting room for a while, I wondered whether I had been forgotten. Workers came and went, and no one paid me any mind. I looked over my notes and realized that I had few impressions, none of them well formed. When someone came along to tell me that the driver was running late, I took it to mean that they were not sure where he was.

Still curious about the factory, I thought I might go back to have one last look. No one would probably even notice that I had gone, and maybe there was something to be gleaned from seeing workers when they were less self-conscious about being watched by their managers.

The factory was just behind the office and up a small incline. There was no one outside, only the sound of a slight breeze coming down the hillside. It was a peaceful and bucolic setting. I thought if this factory visit turned into some kind of regular assignment with Bernie, I wouldn't mind.

When I got to the plant, I went over to a window and pressed my face against the glass. For a moment I figured I might have been lost.

Was I at the wrong building?

I looked through the window again. It seemed to be the right place, but the factory was deserted. Where before there had been around 50 or 60 workers, now there was only an old man with a broom in hand. He spotted me at the window and started toward the front door, as if to let me in, but then he did a rethink, turned, and hurried out a rear door instead.

What in the hell is going on?

With my forehead near the glass, I glanced down at my watch. It was just past three. Chinese factories did not have the tradition of an afternoon siesta, and Sister had already mentioned that the factory broke only for lunch and then at dinnertime.

I heard the sound of heels clicking on the pavement behind me. What at first seemed like not such a bad idea was quickly turning into a situation. I felt guilty all of a sudden, as though caught doing something illicit, putting my nose in where it didn't belong.

What excuse could I possibly offer, and how would I address the matter of what I was seeing—or, rather, what I was not seeing? Out of sheer embarrassment, someone might have to get upset about me wandering off.

The sound of fast-approaching heels grew louder until it was no longer possible to act like I could not hear them.

Clack-clack-clack-clack.

I turned around, expecting the worst. Instead of an angry expression, Sister was forcing a smile, one that widened as she approached until it appeared more like a wince. She reached me slightly out of breath.

“The workers are resting,” she said.

It was a conversation stopper, like when someone in America said they were off to run an errand. You weren't meant to ask what kind. The very notion of rest was sacrosanct in China, and then saying something like that to a foreigner gave it an additional weight. Chinese have worked hard for thousands of years. If someone said they needed a breather, no further explanation was necessary.

“Let's go back,” Sister said and quietly led the way.

Trying to process what had just happened, I felt as though I had been to a magic show and seen a large elephant disappear. Where the workers had gone was a mystery. They were nowhere to be seen, and there was nothing to do but rub my eyes and wonder how—or why—it had been done. How could a factory be in full swing one moment and gone the next?

That evening, I telephoned Bernie. I was apprehensive. Surely, nothing like such a vanishing act ever happened in America, and telling him about it would probably only succeed in making me appear foolish. At the very least, it would make me the bearer of bad news.

I decided that I would report on the factory visit—but only in a general way. There were other details to provide. I would tell him all about the visit, but I would leave out the last part since I was not supposed to have seen it anyway.

“Did they seem busy?” he asked.

It was just about the only thing that he was interested in discussing—the general busyness of the place. I decided to tell him about the very end of the trip in detail. He not only believed what happened, but he laughed about it. He had been to the factory himself several weeks earlier and suspected that a similar show had been put on for him, as well.

He was not at all worried. Quite the opposite, he said that what I was reporting was good news. I told him I didn't understand. What happened earlier that day troubled me, and I thought: Any factory that was willing to go to such great lengths to pretend it was busy probably had a few other tricks up its sleeve.

Bernie did not see it that way, though. He figured if business was that slow and they were trying that hard, then it would translate into favorable pricing for his company.

It was interesting to me how Bernie viewed things differently than I might have. He saw what the factory had done as somewhat flattering. If they were so motivated, he might also benefit from the company's undivided attention, which might also mean better quality.

“Tell me, was the ware...