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Adidas AG is moving some production away from Yue Yuen Industrial Holdings shoe factory in Dongguan, China, where a strike over benefits and pay disrupted output for several weeks.
“In order to minimise the impact on our operations, we are currently reallocating some of the future orders originally allocated to Yue Yuen Dongguan to other suppliers,” Adidas spokeswoman Katja Schreiber said on April 23. The Herzogenaurach, Germany-based sportswear maker “has a highly flexible supply chain in place,” she said.
Sports and casual shoe brands including Nike Inc., Asics Corp., New Balance Athletic Shoe Inc., Puma SE and Timberland Co. are made by Yue Yuen, the world’s biggest branded footwear maker and operator of the 1.4 million-square-meter (15 million square-foot) Dongguan complex in southern China. Employees at the complex, where more than 40,000 people work, are striking in a dispute over compensation since April 14.
Yue Yuen is “still committed” to maintaining production in Dongguan and declined to comment “about any particular customer,” George Liu, spokesman for the Hong Kong-listed manufacturer, said. The company had 423,000 employees as of 2012 and factories in China, Vietnam and Indonesia, according to its website.