This weekend provided tragedy and natural disaster for residents and workers in China and Taiwan.

On Saturday, a China based Tier Two auto parts factory experienced a severe explosion involving combustible metal dust that killed at least 75 workers and injured 187 other workers. Photos of the factory from various China media outlets and the BBC depict a charred building façade with many injured workers being treated by emergency responders. The factory belonged to Kunshan Zhongrong Metal Production Co. and is located in a development zone in the Jiangsu provincial city Kunshan City located about 50 kilometers west of Shanghai.  Reports indicate that upwards of 260 workers were in the plant at the time of the explosion which occurred at 7:37am local time.

The plant performs plating and polishing of metal hubs that include wheel hubs, a pre-production preparation for aluminum car wheels used by automakers. According to the supplier’s web site, the processor is a subcontractor to auto wheel maker Citic Dicastal Wheel Manufacturing Co. based in Hebei province. Various reports confirm that this factory was an indirect supplier of car wheels to General Motors cars produced in China, although other automotive OEM’s are suspected of having a reliance on Citic Dicastal Wheel.

A report published in today’s Wall Street Journal describes the subject factory as paying higher wages, ranging from 7000 to 8000 yuan per month, but demanding high rates of production. It cites two workers as indicating pervasive levels of metal dust accumulation within the facility’s polishing area. The report also cites workers as indicating that a small fire occurred within the polishing workshop four months ago.  According to a posting on ZD Net citing inside sources, the National Work Safety Authority has sent dust experts to carry out investigations and ordered all polishing workshops across China to stop production and begin self-inspection on production safety. As a result, the source expects the production of the pending iPhone 6, Xiaomi 4, and MX4 smartphones to be affected.

 

Previously within China, incidents of explosions caused from combustible metal parts involved two different suppliers to Apple. In May of 2011,a significant explosion rocked a Foxconn Technology Group production facility located in Chengdu, China where two workers were reported killed. In December of that same year, an explosion at a manufacturing facility of Ri Teng Computer Accessory Co., a subsidiary of Pegatron Corp, located in Shanghai’s Songjiang Industrial Park, injured upwards of 60 workers. 

This latest incident involving combustible metal parts is sure to raise more concerns regarding workplace safety standards involving the hazardous production byproducts.

In terms of factory disasters, in June of 2013, 113 workers were killed in a poultry factory plant in Jilin province, reported as one of China’s deadliest industrial accidents in years.

Meanwhile a strong earthquake in southern China’s Yunnan province toppled thousands of homes on Sunday, killing at least 367 people and injuring more than 1,881. China’s official Xinhua News Agency reported that about 12,000 homes collapsed in Ludian, a densely populated county located around 277 miles northeast of Yunnan’s capital, Kunming, The magnitude-6.1 quake struck at 4:30 p.m. local time at a depth of 6 miles, according to the U.S. Geological Survey. Its epicenter was in Longtoushan township, 14 miles southwest of the city of Zhaotong.

Late last week, a series of consecutive deadly explosions caused by a natural gas leak killed at least 25 people and injured 257 in the southern Taiwanese city of Kaohsiung, Taiwan’s second-largest city. The underground explosions’ triggered fires that ripped off manhole covers on roads and cratered large boulevards. Local television footage showed roads exploded with flames, overturning cars and collapsing houses.  Reports further indicated that 12,000 people fled in fear of additional explosions but have since returned to their homes. As we pen this commentary, concerns remain regarding when the restoration of natural gas supply will be returned to the impacted area which includes various suppliers.

It was obviously not a good weekend in the region. Our thoughts remain with many of those impacted.

Bob Ferrari