Japanese based auto parts supplier F-Tech, Inc., a major supplier to Honda Motors, is moving its brake pedal production from Wuhan, China, to the Philippines. The catalyst for the move is the coronavirus, now declared a global emergency, that originated in the Chinese city of 11 million people.

Other manufacturers in the beleaguered city are poised to follow suit but the exodus of manufactures is not the only business sector affected by the epidemic. Wuhan is one of China’s biggest industrial and business hubs with several large Chinese and foreign corporations operating there.

Aside from the move by F-Tech, both small and large businesses have been affected:

  • At least seven hotel companies including The Peninsula Hotels, Shangri-La Hotels and Resorts, Hilton, and Marriott International announced they will waive fees for changes or cancellation during the outbreak, South China Morning Post (SCMP) reported.
  • Large fast-food chains like McDonald's, Pizza Hut, and KFC, operating in Wuhan and its surrounding area have been impacted. McDonald’s suspended operations in five other Chinese cities, Business Insider reported.
  • The Japan Times reported that H&M, a Swedish multinational clothing retail company, was closing a total of 13 stores in the region.
  • Another Swedish company, the furniture giant IKEA temporarily closed putting 500 employees out of work, according to SCMP.
  • Big manufacturing companies with a presence in Wuhan include German multinational conglomerate Siemens, Chinese smartphone maker Xiaomi, and the electronic component maker BOE Technology Group, and PepsiCo. All of these may shut down or even evacuate employees away from the coronavirus epicenter.
  • In addition to Honda, eight other automobile factories including Peugeot Citroen, Renault, Honda, and China's Dongfeng are based in Wuhan and may have to cease operations following the same path as F-Tech.
  • Tourism and retail stocks dropped sharply for companies like Burberry, cruise giant Carnival, and British Airways owner International Consolidated Airlines Group (IAG) who depend on Chinese demand.

Wuhan is obviously devastated over the spread of the coronavirus that allegedly began in a fish market in the city’s Hubei district and now is a global concern. The virus will eventually run its course and the world will return to “business as normal”. Wuhan, however, will be living with the consequences of not only the viral epidemic but also the “epidemic” of companies leaving the city never to return.

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