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Humanized employee compensation for Canon’s Zhuhai factory closure astounds people

Canon has confirmed it will partially close its Zhuhai factory in southern China. According to reports, Canon Zhuhai Co. Ltd., renowned as the world’s camera behemoth, has a 32-year history in China.

According to public records, Canon Zhuhai was founded on Jan. 15, 1990, the first Fortune 500 business to enter Zhuhai. 

When contacted by China Business News (CBN) on Jan. 30, the Zhuhai High-Tech Industrial Development Zone Authority confirmed this information.

According to the NBD report, the factory is Canon’s sole production facility in mainland China for digital cameras, digital video cameras, image sensors, and lenses. 

On Jan. 12, Canon Zhuhai issued an announcement stating that the sharp shrinking of the global camera market in recent years and the raging pandemic in China have disrupted the company’s operations.

According to the company’s website, as of the end of 2020, the Zhuhai factory had 1,317 employees. The Canon facility in Zhuhai closed down, laying off 1,317 workers, and personal severance costs could reach 1.5 million yuan (about 47,000 USD). 

According to the “Announcement” on the Internet, the priority plan includes five parts: economic compensation, special consolation, employment support, gratitude and memory, and Lunar New year condolences.

Chinese employees appear to be grateful for this compensation plan, calling it a company with a conscience. 

The program is valid from now until 17:00 on Jan. 23, 2022, and the signatories will be reimbursed.

There is no upper limit on the economic compensation, which is better than the law in China. The calculating standard is N+1: “N” stands for the statutory financial compensation, which is the employee’s working years multiplied by the employee’s average monthly salary.

According to China’s “Labor Contract Law,” if an employee’s average monthly compensation is three times higher than the average local salary, the highest compensation is limited according to the local average. In addition, the maximum number of years of service is twelve. 

However, the Canon facility at Zhuhai does not make this preferential treatment plan the highest limit.

There are three levels of special consolation money: 

First for an employee working less than 10 years. The compensation will be the total working years times their monthly average salary at a 1.0 ratio.

Second, If the working experience is between 10 to 20 years, the consolation is the average salary times a 1.2 ratio. 

Third, For an employee with more than 20 years of service, the compensation will be the total number of working years times their monthly average salary at a 1.3 ratio.

There are seven levels of employment support funds. For the first level, the average monthly salary will be paid for those employed for less than five years and paid for seven months after employment reaches 30 years.

The company will no longer be a Canon Zhuhai employer after 17:00 on Jan. 23, 2022.

The corporation will distribute the bonus in the first and second halves of 2022 by the bonus standard established in the second half of 2021. 

Canon’s impending departure from Zhuhai follows a slew of other multinational corporations that have relocated their manufacturing sites in China to Southeast Asia or back to their home countries in recent years due to rising labor costs and supply chain security concerns.

According to a poll conducted by the Japan Bank for International Cooperation in 2021, a growing percentage of Japanese companies in China are considering relocating or switching suppliers to Southeast Asia or Mexico. They highlighted increasing labor costs, persistent tensions between China and the United States, and the long-running coronavirus outbreak as reasons for their possible relocation.

The exodus has sparked fears that large foreign investors and employers could be looking to depart China, the world’s second-largest economy.

Scholars believe that the closure of Canon Zhuhai has market reasons as well as political reasons.

According to Radio Free Asia, Yang Haiying, a Canon camera enthusiast and professor at Shizuoka University in Japan, many photographers and journalists worldwide use Canon cameras.

But Japanese corporations are withdrawing from China in general.

Yang said, “According to a study I read, China has abused some of Canon’s technologies, employing them to monitor and even suppress local dissidents in Xinjiang, Inner Mongolia, and the mainland.”

These entities are under pressure from the US and Japanese governments. As a result, they are exiting the Chinese market results for various reasons, including market and political considerations.

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