Intel Shuts Shanghai Plant, Electrolux Shuts Changsha Plant, and McDonald’s Drops Prices

Thursday, February 5, 2009 9:04
Comments Off on Intel Shuts Shanghai Plant, Electrolux Shuts Changsha Plant, and McDonald’s Drops Prices

Three big announcements and 2 juicy rumors today highlight the fact that the scale of the global downturn is growing. Fast.

Big Announcements:
1) Intel shuts Shanghai factory and lays off 2,000 to move inland
2) Electrolux closes refrigerator factory in Changsha as part of a wider move to move from low end products to high end
3) McDonald’s cuts prices on 4 meals by 30% to 16.5RMB to, in the words of Jeff Schwartz, McDonald’s China chief executive:

do our part by helping stimulate domestic demand in the restaurant sector

Big Rumors (both unconfirmed)
1) Yum brands will follow McDonald’s lead and cut prices tomorrow
2) KPMG will ask China staff to take one month non-paid leave

Clearly the impacts of the global downturn are beginning to have an impact, and my feeling is that we are only beginning to see the iceberg expose itself. There is now a lot of chatter about how China’s auto part manufacturers are growing very concerned and there could potentially be some big loses.

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