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that ship 9,000 materials
globally, affecting about
17,600 finished products.
A recent BofA survey
showed just how wide the
remapping of supply chains
may be. Analysts who cover
3,000 firms reported that
companies in 10 out of 12
global industries, including
semiconductors, autos and
medical equipment, have
shifted, or plan to shift, at
least part of their supply
chains from current loca-
tions.
China is almost certain to
take the biggest hit because
of its outsized role. South
Asia and Mexico may have
the most to gain.
“These movements are
tectonic,” Harris said.
Bhawnesh Mathur, chief
executive of Masterwork
Electronics, is starting to
look more at Mexico.
The Chula Vista com-
pany already has a plant in
Mexicali, as well as one in So-
noma County, Calif. Those
two facilities make printed
circuit boards and other
electronics assemblies for
various manufacturers, us-
ing relays, connectors and
many other components im-
ported from China.
Masterwork contracts
with about 100 factories in
China. Before the virus out-
break, the company could
place an order and have it
confirmed in two to four
days. Last month, Mathur
said, it was taking two to
three weeks — and even
then, they couldn’t say when
the products would be
shipped.
Mathur had been think-
ing about reconfiguring his
supply chain: He was feeling
the heat from the Trump ad-
ministration’s 25% tariffs on
many machinery parts from
China, as well as the rising
political pressure in Ameri-
ca to bring industrial pro-
duction of things such as
electronic circuit boards
closer to home.
Now with the co-
ronavirus, he said, “there
will be changes.”
China hawks in the
Trump administration
couldn’t be happier. Some of
them have been blunt in say-

ing that the coronavirus pro-

vides an opportunity for a

U.S. decoupling from China.

Trump has sent more

mixed messages about U.S.

business relations with

China, but he also has ech-

oed remarks that drugmak-

ers should diversify and

overhaul supply chains,

which today rely heavily on

Chinese pharmaceutical in-

gredients.

“A lot of the coronavirus

shows the importance of

bringing manufacturing

back to America so that we

are producing at home the

medicines and equipment

and everything else that we

need to protect the public’s

health,” Trump said Mon-

day at a White House meet-

ing with drug company exe-

cutives.

But few predict a manu-

facturing renaissance is on

the horizon for America. Nor

is a mass retreat from China

likely to be swift. It took dec-

ades to build the current in-

dustrial ecosystem, and Chi-

na’s huge labor force and su-

perior infrastructure will be

hard to replace or re-create

anytime soon, if ever.

Still, there have been

growing worries that supply

chains were too concen-

trated or getting stretched

thin.

Over the years, automa-

tion helped companies man-

age inventories so they have

just enough materials and

parts on hand to meet im-

mediate needs, with goods

arriving just in time. That

freed up cash for other uses.

But this innovation also

made the system more vul-

nerable.

In 2011, a powerful earth-

quake and tsunami in Japan

struck a large swath of the

country’s eastern coastland,

temporarily closing key pro-

ducers of sensors and other

electronic parts for the auto

industry. The effect was that

car assembly operations as

far away as Louisiana had to

cut production.

Since then, some Japa-

nese producers have added

backup facilities in other

countries. Overall, however,

the situation has only “mar-

ginally improved,” said Joel

Scheiman, a veteran analyst

for MF Global Holdings in

Tokyo.

With Japan, South Korea

and Italy now dealing with

rising caseloads of the dis-

ease, there could be more

and longer disruptions to

global supply lines. China

does a lot of manufacturing

for Japan and South Korea,

but Chinese factories also

depend on them for parts.

In recent days China has

largely reopened for busi-

ness, although employees

remain wary of returning.

Companies in hard-hit

Hubei province — epicenter

of the novel coronavirus out-

break — are set to resume

operations March 10.

U.S. manufacturers in-

cluding Nike and Ashley

Furniture have reduced

their exposure to China,

mostly by turning to Viet-

nam and others in South-

east Asia. Reliance on

China, however, remains

very high for a host of con-

sumer products, including

electronics.

Many of the world’s cell-

phones, for example, come

from China, even though the

coding and communication

chips that make them

“smart” are produced in the

United States and other ad-

vanced economies.

Other components that

go into Apple iPhones origi-

nate in still other countries.

Apple relies on plants in

China for parts as well as for

the final assembly of much

of its products sold world-

wide.

When the coronavirus

spread through China, Ap-

ple told investors that it

wasn’t going to meet its reve-

nue projections in the cur-

rent quarter. The company

said its contract factories

weren’t resuming produc-

tion as quickly as it had ex-

pected.

Apple’s chief executive,

Tim Cook, has suggested

that the company’s supply

chain didn’t need a major

overhaul, but it has taken

baby steps to diversify and

depend less on China.

And in the wake of the

outbreak, Commerce Secre-

tary Wilbur Ross has singled

out Apple’s China-centric

production system as illus-

trative of what’s wrong

with today’s globalized

economy.

“Globalization had got-

ten out of control. It takes

200 suppliers in 43 countries

on six continents to make an

iPhone,” Ross said in a

speech last month in Eng-

land.

In fact, more than half of

all chips of all types pro-

duced in the world are sent

to China, said Chris Richard,

a partner at Deloitte Con-

sulting in Phoenix.

As Richard sees it, indus-

tries will probably accelerate

moves to localize supply

chains so they’re more

closely tied to final markets

as opposed to extending

them farther out.

The coronavirus fallout,

he said, “is another proof in

point that if you concentrate

too much, you’re exposing

yourself.”

U.S. firms shift from China

WORKERSat Paulson Manufacturing in Temecula

assemble medical goggles for shipment to China.

Gina FerazziLos Angeles Times

[Supply,from C1]

aware of the complaints
from the cabin cleaners but
did not have the authority to
require airport contractors
to provide workers gloves or
other equipment.
“We do not dictate how
they mandate the cleaning
of the planes,” said Justin
Erbacci, interim chief execu-
tive of Los Angeles World
Airports.
But Councilman Mike
Bonin said he was not satis-
fied and instructed airport
officials to report back to the
council on ways to ensure
that airport contractors
comply with worker training
requirements.
“We can’t just take their
word on it,” he said.
A 2017 Los Angeles ordi-
nance requires all airport
employees, including those
who work for a contractor at
LAX, to undergo 16 hour of
emergency response train-
ing to teach workers the defi-
nition and effects of “hazard-
ous materials” and “infec-

tious diseases,” among

other subjects.

Gomez and several of her

co-workers said they don’t

recall undergoing such

training.

Bonin asked Muntu

Davis, the Los Angeles

County health officer, if the

cabin cleaners could have

been exposed to the virus.

“That’s a possibility,” he

replied.

Several JetStream em-

ployees also took their griev-

ances to the city’s Bureau of

Contract Administration on

Feb. 19, but an agency

spokeswoman said the bu-

reau has jurisdiction to in-

vestigate only wage dis-

putes.

The Florida company

cleans airplanes and han-

dles cargo at 20 of the na-

tion’s busiest airports, work-

ing for American, Delta,

United and Southwest air-

lines.

“We were just being

thrown out there without

the tools we needed,” said

Miguel Covarrubias, who

has worked for JetStream

for 10 months.

Calls and emails to Jet-

Stream were not returned.

In an interview with NPR,

JetStream President Marc

Desnoyers said his employ-

ees have been given the

proper equipment and

training to do the job.

“Provisions of cleaning

solutions, gloves and all nec-

essary safety equipment, in-

cluding masks when re-

quested, are closely moni-

tored and replenished when

needed,” he told NPR.

A spokesman for LAX

said the airport was not

aware of the complaints.

In a statement, American

Airlines said: “American Air-

lines’ vendor management

team works in close partner-

ship with all of our vendors,

including JetStream, to en-

sure the health and safety of

everyone in the airport envi-

ronment.”

Before the outbreak, Los

Angeles was one of the na-

tion’s top ports of entry for

Chinese tourists and busi-

ness executives, drawing

1.2 million visitors from

China in 2018.

That all changed after

most of the country’s largest

carriers suspended flights

from China, Hong Kong and

Macao and the Trump ad-

ministration barred entry of

most foreign nationals who

had recently visited China.

Before the flights from

China were halted, Gomez

and her co-workers said,

they were ordered to clean

several inbound American

Airlines planes without ade-

quate training or equip-

ment.

Workers, who said they

could not refuse to clean sev-

eral flights from China, wor-

ried later that they could be

infected with the virus.

“We told our managers

and one of them said, ‘Don’t

even worry about it. That’s

in China, not in L.A.,’ ” said

Jose Hidalgo, a JetStream

employee from Gardena.

Safeguards lacking, LAX workers say

[Jetliners,from C1]

dramatically change the fu-

ture of this company and our

industry.”

California and other U.S.

coastal states have proved

more amenable to EVs, giv-

ing GM the opportunity for

faster growth beyond its

base in mid-America. “We

sell the most vehicles in the

country right now,” she said.

“We’re unrepresented on the

coasts. It’s a huge opportu-

nity for us.”

Or so GM hopes. In 2021,

the company plans to intro-

duce an all-electric GMC

Hummer, an all-electric Sil-

verado pickup, and an elec-

tric Cadillac SUV named the

Lyriq. It’ll take a few years to

know whether GM’s aggres-

sive move will be rewarded.

Sales of the company’s

Chevy Bolt EV compact car,

introduced to great fanfare

in 2017, have proved disap-

pointing. In California,

where about 50% of the na-

tion’s EVs are sold, the Bolt

attracted only about 8,000

buyers in 2019, compared

with about 59,000 customers

for the Tesla Model 3.

In the U.S., EV sales fell

more than 6% in 2019, and

they still represent only

about 2% of the 17 million

passenger vehicles sold.

GM is not the only au-

tomaker going out on an EV

limb. Pushed by regulators

worldwide, Volkswagen,

Ford, Hyundai and others

are diving deep into EV de-

velopment.

Barra spoke to investors

attending General Motors

EV Day at the company’s

technical and design center

in Warren, Mich., just out-

side Detroit.

The company hopes to

generate more investor ex-

citement about GM’s future.

Like other traditional au-

tomakers, GM has been

stuck with a pallid stock

price as Palo Alto-based

Tesla’s shares soar.

Tesla’s market value is

three times that of GM, at

about $137 billion, even

though GM’s overall annual

revenue is more than five

times greater than Tesla’s.

GM earns billions in annual

profits whereas Tesla has

not scored an annual profit

since it went public in 2010.

GM’s share price jumped

3.3%, closing the day at

$31.53.

GM’s EV and automated

vehicle approach represents

“the biggest opportunity

anybody has ever seen for

this company,” GM Presi-

dent Mark Reuss told in-

vestors.

Engineers introduced

what GM calls its Ultium

electric car platform, an EV-

only modular design similar

to what Tesla, Rivian and

other EV makers already

use. Known generically as a

“skateboard” design, it pro-

vides the base of a modern

electric car — the wheels,

motors, battery pack, sus-

pension system.

Without a gasoline or

diesel engine to get in the

way, the flexible skateboard

design can accommodate

different vehicle styles, rang-

ing, Reuss said, “from full-

size trucks to crossovers to

cars and even self-driving ve-

hicles.”

A skateboard can be re-

sized and reconfigured with

relative ease. GM plans to

use the modular design and

better battery technology to

lower costs and boost range

over 400 miles. Range anxi-

ety is one of the biggest im-

pediments to consumer in-

terest in electric cars.

Few EVs today boast a

range over 250 miles, though

some Tesla models claim a

maximum range of 370 miles.

GM plans to make its own

battery cells and battery

packs, as Tesla does. With

partner LG Chem of South

Korea, GM is building a gi-

ant factory in Lordstown,

Ohio — the size of 30 football

fields, the company says —

to turn out 30 gigawatt-

hours of battery power per

year. That’s about the size of

Tesla’s so-called Gigafac-

tory outside Reno.

It’s not yet been shown

that automakers can make

money selling electric cars.

But through modular car

design, vertical battery inte-

gration, manufacturing

scale and aggressive cost

cutting, Reuss said, “we in-

tend to do this profitably.”

The company said it

wasn’t far from reaching the

$100-per-kilowatt-hour cost

level in battery manufactur-

ing, the point at which ana-

lysts believe EVs can com-

pete on price with internal

combustion engines. Cur-

rently, an electric vehicle can

cost $10,000 more than its

similarly equipped internal

combustion counterpart.

GM also talked about its

Super Cruise driver-assist

technology, which can navi-

gate automatically through

highway traffic. It’s similar

to Tesla’s Autopilot but uses

a different technology to

monitor driver attention — a

camera that can monitor

whether the driver is watch-

ing the road. Autopilot

senses a hand on the

steering wheel.

Consumer Reports and

safety experts in general say

that the Super Cruise-style

camera system does a better

job of keeping a driver alert.

Super Cruise is currently

only in the Cadillac CT6, but

Reuss said the Bolt EV

would be sold with the op-

tion soon and that 10 vehi-

cles would offer the option

next year and 22 vehicles by

2023.

GM launches

5-year EV plan

GM CEO Mary Barra and the Chevy Bolt, which

hasn’t sold well in California since its 2017 debut.

Tony Ding Associated Press

[GM,from C1]