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Mike Hundert, CEO of REM and Base Curve Eyewear, in late November from his latest multi-week trip through China. It’s his fourth visit to China in the past year and this is the fourth in a series of articles he’s written for Vision Monday, focusing on the evolving landscape of manufacturing eyewear in China.


DONGGUAN, China—It seems that with each season comes a fresh set of challenges for making eyewear in China. In early 2008, less than two years ago, factories reeled (and closed) due to new government demands regarding wages, benefits, and healthcare. Imagine going from virtually no regulations to a long list of deliverables impacting corporate expenses and profit? Couple that with a strengthening of their currency (Yuan) by some 20 percent, effectively raising all their costs accordingly.

The result was factories that didn’t throw in the towel had to tighten their belts, curtailing investment in R&D, and raising prices, and all those expense slashing efforts we have each faced in the past year. But this was “before” the heart of the recession and the financial market meltdown.

At that point, the Chinese government backed off their enforcement of the regulations, although they did not eliminate them. Instead, they provided temporary exemptions to help factories stay afloat and retain employment. During the heart of the recession eyewear companies slashed their orders sending factories back on their heels again, forcing mass layoffs. That was one year ago.

Today, boy have things changed again. Importers, such as us, embraced the theory of lean inventory last winter and spring. Once those inventories were shaved and business in the eyecare world was found to be not as bad as in other sectors, confidence returned. And with it came orders.

Starting last August orders began flowing to manufacturers. That accelerated in September. That all sounds just fine, doesn’t it? What a fast and wonderful recovery. Not.

The challenge now centers on fulfilling those orders, including sunglasses that virtually skipped a season. When those workers were laid off last winter and factories began operating leaner, those people returned to their homes, mainly located in the interior of China, far from the coastal cities that produce most exports.

Now that factories need workers again, they are gone. They’ve traveled home, perhaps several days away from the industrial centers. Job signs go ignored. A factory that I visited in mid-November wants to hire another 600-800 workers, yet days go by in which not a single applicant appears.

With not much time before the Chinese New Year holiday, there is even less incentive to travel so far, just to travel back and forth again during the holiday season.

At the same time, this is the height of the season for manufacturing sunglasses. Plus, now that the most important trade show of the year, MIDO in Milan, has been moved up to the beginning of March (from its traditional time in May), there is additional pressure to produce new collections before that important event. Add yet another complication, the Chinese New Year holiday shuts factories down for most of February. It’s a collision course.

The result; factories are simply shorthanded. That leads to increased wages to keep current employees. It means higher wages and more intense recruiting efforts to attract new employees. It means production slows, delaying deliveries of goods. It means massive overtime for employees, at their free will, but often in direct conflict with our focused efforts to improve the human condition through corporate responsibility policies laid down by us and licensors, those brand-driven companies seeking to both improve working standards and insulate themselves from bad publicity.

The first quarter of 2010 will be massively affected by these issues. Expect considerable delays in product rollouts, including the all-important sunglasses that hit marketplaces early in the year. Backorders are likely to build. Costs are nearly certain to increase.

Meanwhile, innovation continues, as does investment in technology to produce superior products. Investments are considerable in automation, in part to protect their production schedules from the ebbs and flows of the labor market. Regardless of the current challenges, China remains a progressive and productive region for the present and future of eyewear manufacturing.

Read Hundert's previous three dispatches from China:

3) CHINA: A Perspective on Sourcing, Supply and Today’s Economy

2) The Financial Crisis and the Manufacturing Landscape: What Now?

1) The Cost Of Goods In A Rapidly Changing Country